I passed PMP Exam on 10th January 2020 and have started this new decade as Project

Management Professional® community member.

I have specially designed this book “Project Insider” (Simplifying the Complex) to assist
people who don’t want to go through extensive study material, people with busy
schedules and specially for people looking for a source for final revision before appearing
for exam and don’t want to go through the lengthy study material currently available in
the market. This book will also be very beneficial for PMP aspirants who for some reason
were not able to pass the exam. Consider this book as my notebook that I arranged when
I was preparing for PMP exam.

This book will also serve the purpose of time saving for exam preparation for candidates,
as PMP Exam pattern will be soon changed from July 01, 2020. So, candidates can take
the current version of PMP exam till June 30, 2020 for which this book is designed.

This book COVERS ALL essential topics, charts, tools and techniques, formulas, hints, tips
and tricks necessary (and sufficient) to study for PMP Exam. I have merged all my
learnings and notes under each topic which I have acquired by reading PMBOK Guide
(Sixth Edition), Rita Mulcahy’s PMP Exam Prep (Ninth Edition) and by attempting online
exams whose reference will be included at the end of this book. Explanation under each
heading contain necessary explanation, you need to read and remember to get most
questions right on the exam. The reader can use this book as reference and also a guide.

So, Let’s Study!

 Hi! My name is Arsalan Khan. I am a Planning Engineer by
profession and I recently acquired my Project Management Professional certification from
Project Management Institute.

I have been associated with Oil & Gas Construction Industry in United Arab Emirates for the past
8 years after my graduation from one of the prestigious Engineering university of Pakistan,

NED UET.

I feel privileged to acquire PMP® after my name and I have desire to train people in future
about Project Management. This book is the first step towards my next goal.

You can visit my LinkedIn profile to know further about me. Following is the link:
www.linkedin.com/in/EngineerArsalanKhan
By Remembering the following sequence of planning process.

- Determine development approach, life cycle and how will you plan for each knowledge
area
- Define and prioritize requirements
- Create Project Scope Statement
- Assess what to purchase and create procurement documents
- Determine planning team
- Create WBS and WBS team
- Create activity list
- Create network diagram
- Estimate resource requirement
- Estimate activity durations and costs
- Determine critical path
- Develop schedule
- Develop budget
- Determine quality standards, processes and metrics
- Determine team charter and all roles and responsibilities
- Plan communications and stakeholder engagement
- Perform risk identification, qualitative and quantitative risk analysis and risk response
planning
- Go back - iterations
- Finalize procurement strategy and documents
- Create change and configurations management plans
- Finalize all management plans
- Develop realistic and sufficient project management plan and baselines
- Gain formal approval of the plan
- Hold kick off meeting
- Request changes
- Cost baseline: Project estimates + contingency reserves
- Project budget: cost baseline + management reserves

This is a standard process that should be followed in sequence to plan for a project.
Remember the following formulas and practice exam questions for their usage:

- Total Float = LF – EF or LS – ES
- Free Float = ES (Successor activity) – EF (Predecessor activity)
- Early Finish = ES + Duration (Forward Pass)
- Late Start = LF – Duration (Backward Pass)
LF: Late Finish
EF: Early Finish
LS: Late Start
ES: Early Start
- Communications Channels = n(n-1)/2
n = No. of stakeholders (Note: add yourself as a stakeholder if question does not mention
project manager)
- Present Value = Future Value/ (1 + Interest Rate) no. of period
- Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC)
- Schedule Variance (SV) = EV – Planned Value (PV)
- Cost Performance Index (CPI) = EV/AC
- Schedule Performance Index (SPI) = EV /PV
- Estimate at Completion (EAC) = Budget at Completion (BAC) / CPI
- EAC = AC + (BAC – EV)
- EAC = AC + (BAC – EV)/CPI x SPI
- EAC = AC + Bottom up Estimate
- Estimate to Complete (ETC) = EAC – AC
- To Complete Performance Index (TCPI) = BAC – EV/BAC – AC
- TCPI = BAC – EV/EAC – EV
- Variance at Completion (VAC) = BAC – EAC
- Target Price = Target Cost + Target Fee
- Point of Total Assumption (P.T.A) = (Ceiling Price – Target Price/ Sharing Ratio) + Target Cost
- Profit or Loss = Target Cost – Actual Cost
- Share = (Profit or Loss) x Sharing Ratio
- Final Fee = Share + Target Fee
- Final Price = Actual Cost + Final Fee
- Б activity = P – O/6 (Range)
- (Б activity )2 = Variance activity
- Expected Activity Duration (EAD) = (P+M+O)/3 (Triangular or Simple Average, when no
experience or historical info)
- Expected Activity Duration (EAD) = (P+4M+O)/6 (Beta Weighted Average, Beta Weighted
Average)
- Expected Monetary Value (EMV) = P (Probability) x I (Impact)
Project is temporary endeavor that produces a unique service, product or result.

For Example:

Following a proper Proposal process, ABC Company has won an EPC Project to construct Cross
country Gas Pipeline, ABC company has never executed such project before. ABC company
will be hiring team of over 200 people including Project Manager, Project Construction Team
and Project Management Team from 3 different countries. Gas Pipeline project has estimated
duration of 14 months and estimated budget of $250 Million.

So, for exam remember a Project is:

- New to organization (never done before)

- Use resources from many countries
- More than 200 people involved
- Last for one year or longer
- 200 million dollar or more budget
- Projects are not selected arbitrarily (proposal process is followed)

It is the application of knowledge, skills, tools and techniques to project activities to meet the
project requirements. If not properly followed will result in cost overruns, poor quality, missed
deadlines, unsatisfied stakeholders etc.

Project manager manages the project to meet project objectives and deliver value and
benefits to the organization. Builds realistic schedules and plans as per budget and resources.
Should be involved in the project from no later than initiating, preferably during development of
Project Charter. 90% of his/her time during project will be spent on doing communication.
 Organizational Project
Management (OPM)
Provides framework to guide following to achieve startegic objectives

Portfolio
Prioritize following to achieve strategic objectives

Operations Programs Projects

For better coordination
On going work of related projects
Related or unrelated

Projects Projects
Related Related
Relation between OPM, Portfolio, Program, Projects and Operations

Setting the policies and procedures how work will be performed.

This office standardizes the management of projects.

– Provides procedures, methodologies to manage projects. Low

level of control over projects.

– Provides trainings, support and guidance to manage projects.

Moderate control over projects. Ensures compliance with organizational policies.

– Selects projects, priorities and project managers. Full Control over

projects.
 - How the company is organized.

Project occurs within department, information flows through department heads. Project
manager power is low. Team members do both departmental and project work and
have no loyalty for project.

No Home – Employees leave after projects end. Project Manager power is high.
Members only do project work. Duplication of facilities and job functions.

(In exam, if not mentioned assume organization structure is MATRIX to solve

problem)

Employees report to both functional and project manager, more support from functional
areas. Higher potential for conflict.

Project manager has more power.

Power is shared between Functional and Project Manager.

Project Manager power is low and he/she acts as:

- has power can make decision, or

– has no power, work as communication

coordinator.

- Provides financial support

- Facilitate to negate unwanted changes
- Determines priorities between constraints
- Approves final project management plan

– role should be determined by Project Manager and by themselves.

- Provide subject matter expertise

- provides resources and ensures their availability
- Approve schedules and plans
- Recommending changes to projects
- Participate in risk identification

– selects and prioritize projects based on values and ROI, strategic

objectives, get support from management for selected projects.
 – manages related projects to achieve business goals and ensures
aligning strategic objectives.

Organizational knowledge repositories and Process, policies and procedures of organization.

Repositories include Activities list, WBS, Estimates, Benchmarks, Reports, Plans, Documents,
Baselines, Configuration plans, Lessons learned, Issue logs and Financial data.

Inputs to many planning, executing and monitoring & controlling processes.

Factors that are outside the control of project team.

– government-imposed rules and regulations, market environment

– company culture, policies, working environment location

Perform
All Monitoring
Direct & Integrated
and Monitor
Manage Work Work Work Change Control /
Controlling & Control
Project Performance Performance Performance Manage Team /
Process Project
Work Data Information Reports Manage
Outside Of Work
Communication /
Integration
Monitor Risks

Relation between Work Performance, Data, Information and Reports

is EEF includes:

- Scheduling software
- Configuration management system
- Work authorization software
- Time tracking software
- Procurement management software
What you need to do to do the work (breakdown of what needs to be done to produce desired
deliverables based on industry, product and organization)

It is a series of phases through which a project passes as it goes from beginning to its end. It’s a
methodology by which an organization handle its projects.

Collective of these phases are called Development life cycle.

For E.g.

Planning – Procurement – Fabrication – Testing – Installation – Commissioning

– Planned in detail before work begins

- Produce usable portion of product with each iteration.

- Some detail is added with each iteration until final functionality is
achieved.
- Scope is broadly defined, customer requirements noted in
Backlog, scope refinements with each iteration
Combination of predictive and adaptive

For exam think as Plan Driven Project unless mentioned

What you need to do to manage the work throughout the project life cycle we just selected.

For small plan driven project management process is done once for whole life cycle whereas for
large projects each life cycle phase involves completing project management process ending
with Phase Gate (decides to redo, continue or end).

The Project management process groups include Initiating, Planning, Executing, Monitoring &
Controlling and Closing.

These processes do not change although there are variations in the level of attention and
formality given to each of the process groups depending upon the LIFE CYCLE used.
 - Strategic objectives should be developed by organization.
- Processes that start at initiation and continues till closing: Team Building, risk identification
and response plan, identification of stakeholders
- Team can be released whenever they complete work and submit final report lessons
learned
- Change can occur in planning, executing and monitoring & controlling
- Project Management process groups overlap.
- Executing is to manage human and physical resources and complete work
- Monitoring and controlling to check work that are completed as planned and request
changes

“Sponsors selects project managers”

The process of continually refining estimates and scope definition is called progressive
elaboration

Rolling wave planning: work is planned in sufficient detail to start the work and then progressively
elaborated when more information is available

Project Manager is assigned early in the project by sponsors

High level WBS, estimating and risk identification is done during initiating

Work with customers to define “acceptance criteria”

Use the project scope statement to gain final approval of scope from stakeholders before
further planning in detail.

Develop schedule/budget model compare against constraints and use compression techniques
to get final realistic schedule

Complete each planning process as possible and then only after risk analysis finished go back
iterate each process, saves time

How much time planning required depends on priority of Project?

Use latest revised plans

Project Manager should be Proactive, lead, engage and guide

Work according to project management plan

Monitoring – checking how the project is progressing

Controlling – taking action if variances are outside control limit

Requesting a change should be last option

Measure against baselines and also with other metrics

Use configuration management means which version of plan is latest

Identify and analyze trends

Close procurement after deliverable acceptance

Assess additional funding

New risks, triggers, workarounds

Review invoices and make payments

Review claims

Administrative closure paperwork, technical acceptance, transition and feedback

Make final payments and complete cost records

Confirming all requirements met

Formal acceptance

Lessons learned are compiled and archived in lesson learned repository

Play what group belong to quiz in Rita

Project Manager should be able to integrate all project management processes into a cohesive
whole.
For Exam remember that proper project selection method was followed from below options:

Peer Review

Economic Measures

A Murder Board

Scoring Model

Multi objective Programming

Integer Programming

Linear Programming

Dynamic Programming

Present What value is achieved in return of invested amount

Present Value of future cash flows

- Present Value = Future Value/ (1 + Interest Rate) no. of period

PV of all income/cost (Positive and Greater is selected, no. of years is

irrelevant)

Higher the better

Shorter the better

: Benefit same as revenue, revenue not same as profit.

Value addition in terms of cost incurred

: Cost of project not selected

Money spent is gone, should not be considered

: Adding more value will not produce desired results after some
period of time.

Current assets minus current liabilities, money available to spent

: Loss of value over time period. (Straight line or accelerated)

 (OBJECTIVE, REQUIREMENTS, SUCCESS CRITERIA)

Is not a project management plan

Project charter is to plan at high level how the project reaches its objectives within given
constraints, detail planning comes afterwards.

Business documents will not be altered throughout the project and is reviewed only that
includes:

justifies the project, why selected, how matches with strategic objectives and
what business value bring

: when benefit will be achieved, how can be increased,

owner

are documented in business case.

is identified at high level in initiating and refined in detail further in define

scope in planning process

Assumption analysis happens in Risk management process

Seller and buyer have different project charter

Assumption log started during project charter creation

1. Project Title and Description (what is project)

2. Project Manager and authority level
3. Business case (justification)
4. Resources preassigned
5. Key stakeholders list
6. Requirements
7. High level product description / deliverables
8. High level assumptions
9. High level constraints
10. Measurable project objectives
11. Project approval requirements
12. Overall project risks
13. Project exit criteria
14. Project sponsors authorizing the project sign.

Project Charter & Assumption log are output of Create Project Charter Process.

: Strategy and approach for managing the project.

For Exam remember that project manager has prepared management plans for all knowledge
areas also change, configuration and requirements management plan and will look for in them
for any aspect of problem in them.

Project Management plan combines management plans and baselines.

 includes:

- Project Life Cycle

- Development approach
- Management reviews (milestones)
- Project management process involved
- Knowledge area management plans
- Baselines (cost, schedule and scope) Performance measurement baseline
- Deviations from baselines occurs mostly due to incomplete risk assessment
- Requirement management plans
- Change management plan and change control system (PMIS) EEF
- Configuration Management Plan and Configuration management system
- Further actions to take before kickoff meeting:
- Sponsors and stakeholders review and approve PM plan. Formal approval is done
- Actions must be performed for project management plan
- Meet with stakeholders to define their roles
- Apply risk reserves
- Provide team members chance to approve schedule
- Perform schedule compression

include info in detail that is not included in Project Management Plan.

E.g. Assumption and issue logs, lesson learned register

– to ensure everyone is on same page.

Stakeholders list provided in the charter is used further in IDENTIFY STAKEHOLDERS process to
produce STAKEHOLDER REGISTER that is used as INPUT in STAEKHOLDER ENGAGEMENT PLAN.

- Completing work for deliverables

- Collecting work performance data
- Using and updating issue log
- Requesting changes
- Implement approved changes
- Focus on all knowledge areas all the time

assist project manager by providing

procurement management system, work authorization system, scheduling software,
configuration management system, change control system, time tracking software.

Work Authorization system is used authorize start of any activity.

Deliverables, work performance data, issue log and possible change requests are outputs of
Direct and manage project work
One should remember major inputs and outputs for processes displayed in this chart:

Close Project or Phase Accepted Deliverable Final Project File

Sequence Activities
Develop PM Plan
Plan Procurement Management
Procurement Documents
Contract
PM Plan
Business Documents
Activity List
Milestone List
Schedule Management Plan
Project Charter
Business Documents
Inputs from other processes
PM Plan
Scope Management Plan
Requirement List
Deliverable Handover
Lessons Learned Register
Project Schedule Network
Diagram
PM Plan
Procurement
Management Plan
Procurement Strategy
Bid Documents
Procurement statement of
work
Source selection criteria
Make or buy decision
Independent cost estimate
Project Documents update

Collect Requirements PM Plan Requirement List

Project Charter Requirement document
Stakeholder register Requirement traceability
matrix

Define Activities WBS Activity list

Scope MP Milestone list
Activity attributes
Estimate activity resources Activity list Resource requirement
Resource MP RBS
Scope MP Basis of estimates

Direct and manage project work PM Plan Work Performance Data

Project charter Deliverable
Approved change requests Change requests
Define scope Scope MP Project Scope Statement
Requirement register
Charter
Identify stakeholder Procurement Documents Stakeholder register
PM Plan
Charter
Develop schedule Schedule MP Schedule baseline
WBS Project schedule
Schedule data
calendars
Validate scope Verified deliverable Accepted deliverable
Scope MP Change request
 Monitor risks Risk MP Change Requests
WPD WPR
WPI
Manage stakeholder Stakeholder MP Change requests
engagement Stakeholder assessment
matrix
Conduct procurements Procurement MP Contracts
Seller proposal Selected seller

Determine Budget Plan Cost Baseline

Agreements Project funding
requirements

Using knowledge in organization data base for betterment of your project and sharing lessons
learned from your project in the data base.

: fact based, easy to share (information management)

: emotions, experience, ability (knowledge management)

Meetings, knowledge sharing events, public events, environment for knowledge sharing

Work shadowing, observation, storytelling

Confidentiality – non disclosure agreement

Lessons learned from other projects and deliverable are input and Lessons learned Register is the
output of Manage Project Knowledge

Lessons learned means what was done right, what was done wrong and what was done to
make it right.

Technical lessons learned are about product or process

Project Management lessons learned are about WBS, risks

Management lessons learned are about communications, leadership

Starts from initiation and continued throughout closing

It involves aggregating work process information from monitoring and controlling knowledge
area process to evaluate and assess how their individual process is affecting the other
knowledge areas baselines.

Change requests and work performance reports are outputs of this monitor and control project
work process
 are output of executing and monitoring & controlling (plan risk response
and plan procurement management)

Are taken to bring future performance in line with the plan, they do not change the
baseline happens within existing baseline. Always preceded by non-conformity

Evaluating trends in performance, anticipating and avoiding variance accordingly. they

do not change the baseline happens within existing baseline.

– rework

Accept, reject, defer any change in this process

Accepted changes are implemented in manage and control project work, control quality and
control procurement processes

Impacts to all other constraints of project are reviewed.

Reserve should be established

If excessive changes are there, then business case in project charter should be reviewed or
project should be terminated

The process of change, step by step:

1. Prevent the change

2. Identify the need for change
3. Evaluate the change impact within knowledge area
4. Create change requests
5. Perform integrated change control
a. Assess the change (with in project boundary, beneficial)
b. Identify options (opportunities, threats, balancing project constraints)
c. Change approved, rejected or deferred
d. Update the change log
e. Parts of project management plan, baselines should be updated
6. Communicate change to affected stakeholder
7. Manage project to new plan and baselines
Individual contracts should be closed in control procurements and all contracts should be
closed before closing process, close phase focus on final contract documentation and
customer acceptance

Close project phase gets approval and acceptance of project as whole whereas validate
scope process in M&C gets for interim deliverable, both are important.

Must be Clearly defined and formally approved.

Only approved work covered in charter should be done

– the functions & features of the final product

– the work done to produce functions and features of product

For exam Consider yourself as Project Manager for buyer unless stated in questions asked

Project Charter, Life cycle and development approach are inputs to Scope Management Plan
and Scope & Requirements management plan are outputs.

Plan risk response results in Scope addition later on – Iteration

Requirements Management Plan is also called Business Analysis Plan

Collect Requirement Process refines and adds to the Assumption Log.

Requirements of buyers are included in contracts and agreements

Focus Group brings people from specific part and a moderator guides the process

Nominal group techniques are structured brainstorming session

Facilitation brings people with different perspective like designers and end users so requirements
are furnished.

Requirements are ranked, analyzed and any conflict should be resolved.

The customer needs to take precedence.

Requirements should comply:

- Business case
- Project charter
- Scope statement
- Constraints

Requirement documentation (should include acceptance criteria) and Requirement Traceability

Matrix are output of Collect Requirement.
 process is always iterative defining what is in and out of project scope

- Project scope statement output of Define scope process involves

- Product scope
- Project Scope
- Deliverables (are defined during scope planning)
- Acceptance Criteria
- Exclusions
- Assumptions and constraints

provides structured graphical display of project

and helps nothing slips through cracks and no deliverables are missed.

Work packages are nouns deliverables and not activities.

Work package level is reached when deliverables can be estimated, completed quickly and
without interruption can be outsourced.

Project, product and project management all scope is included in WBS

is a tool that allow you to collect and analyze work performance data
regarding scope, schedule and cost at a level higher than work package

Control account includes one or more planning packages. It is part of work authorization system

Each work package is assigned to only one control account

WBS helps avoiding scope creep, helps in better communication and identifying roles of team
members

WBS Dictionary avoids scope creep by giving work package description and acceptance
criteria.

– WBS, WBS Dictionary & Scope Statement

Updating WBS is called refinements

– Formal acceptance of deliverables by customer during M&C process

Verified deliverables, work process info, scope management plan, requirements management
plan, requirements traceability matrix, requirement documentation are inputs and

Accepted deliverables, work performance info, change requests and updates are outputs.

Validate scope process happens at multiple occasions at phase end or at deliverable end

Validate scope process provides accepted deliverable from customer at interim level whereas
close project provides acceptance for whole

In control quality, quality department checks for correctness whereas in validate scope
customer checks for correctness
Do not rely on scheduling software to achieve scheduling desired result. You should possess
scheduling process analysis and creating network diagrams abilities.

Schedule Management Plan includes:

Methodology, software, acceptable variances,

Decompose work package into activities at a level so that they can be estimated,
scheduled and controlled

Decomposing Scope / WBS into work packages – Scope Management

Decomposing work package into activities – Schedule Management

– Plan activities in detail as more

info is available as project progress

Milestones can also be used as checkpoints

Activity List, Activity Attributes, Milestone list and Change requests are output of Define activities
process

(output) in pure form only show dependencies,

logical relationship among activities

When estimate durations are added, show critical path

When plotted against calendar, becomes time scheduled network diagram

- Finish to Start
- Start to Start
- Finish to Finish
- Start to Finish

- Mandatory: hard logic, should be

- Discretionary: preferential, preferred, soft logic: can be easily changed, used in
compressing project schedule
- External: Outside of Project Control
- Internal: Under Project Control

Team identifies mandatory and discretionary dependencies

Project Manager identifies external and internal dependencies

 may be used to start an activity before its predecessor activity is completed

is waiting between two activities

Project Schedule Network Diagram helps identify risks, compressing schedule and justify time
estimates

While estimating avoid padding and add reserves for unknowns instead

Those who will be doing the work should be involved in estimating process

Project Manager should avoid padding, provide team with enough detail and sanity check

padding is included, unreliable, unrealistic

use of expert judgement and historical information, can be used at

activity level

using historical records to make a mathematical equation

Regression analysis using scatter diagram: 2 variables relation

Learning curve: efficiency increases with time

Heuristics: thumb rule

Pessimistic, Most Likely, Optimistic variables are used

Time taking, Risk eliminating

Average, simple, straight: equal weight to all three (do not have historical info)

Beta or weighted: gives more weight to most likely. Eliminating risk, good risk
management (have historical info)

Standard deviation is the possible range for the estimate (greater SD greater risk)

Beta: P-O/6

These Standard deviations and estimate ranges help in assessing risks and assist in making
decisions. Greater deviations describe not a firm scope of work.

: creating detailed estimates for each activity then roll up to control

account roll up to project estimate
 : evaluate impact of each option on project variables to find the best
approach to complete project within given constraints.

Contingency reserve: for identified risks in plan risk response process, part of schedule baselines.
Project Manager can use when risks occur (known unknown)

Management reserve: for not identified risks (unknown unknown), not part of baseline. Project
Manager can use only after proper formal change requests.

Decision making fist of five is used.

: includes constraints, assumptions, risks into considerations and

confidence level of estimators

“Balancing the constraints is the professional responsibility of Project Manager.”

- Work with stakeholder priorities

- Look for alternatives ways to complete the work
- Look for impacts on other projects
- Apply leads and lags to the schedule
- Compress the schedule by crashing, fast tracking and re estimating
- Input the data into a scheduling tool and perform calculations to determine the
optimum schedule
- Simulate the project using Monte Carlo and other analysis techniques to determine the
likelihood of completing the project is scheduled
- Optimize the resources if necessary
- Project Team should review the final schedule
- The closer in length to the critical path and more in number the near critical path. Project
has more risk.
- “Float is schedule flexibility”

– time that activity can be delayed without delaying project end date, still
adhering to constraints

– time that activity can be delayed without delaying start of earliest successor
activity, still adhering to constraints

- time that activity can be delayed without delaying externally imposed

project completion date, still adhering to constraints

Activities on critical paths have zero float

Critical paths that are delayed or have imposed completion date have negative floats

Negative float analysis brings schedule back to baseline

Less experienced resource can be used on activity that have float

 : Unrealistic Timeframe is a big problem

During planning it helps project manager whether schedule can be met or not

During the project it helps in Perform Integrated Change Control to manage the baseline
without change

: make activities parallel, adds risks and requires more communication

: adding more resources, adds costs and may risks

Try to eliminate risks and re estimate

Select project with least crash extra cost while crashing

Analyze, create options and present final schedule to sponsor for approval

– Simulation to find out what will happen if a factor changes

– Uses computer software to stimulate results from three-point

estimates

The probability that project completes on specific time, specific cost, activity on critical path
and overall project risks.

Monte Carlo analysis helps dealing with activities having path convergence

– adjusting the use of resources

– produce resource limited schedule, lengthens the schedule and

increases cost, levels the peaks

– level the resources within float limit, does not lengthens the duration

Project Schedule – output its realistic and approved form is called schedule baseline

Milestone charts – shows major events and used to show management

Bar Charts are used to track and show progress reporting and not show interdependencies like
WBS and network diagram and is prepared after them

Schedule baseline

Schedule data

Change requests

Re estimating – once during the project to make sure targets can be achieved
 – to estimate and control costs at higher level than activity level

– life of product from initiation to maintenance

– finding less costly options to do work without loss of performance quality

How to Finance project

– how much money will be received in the future in then discounting

it to its current value (evaluate the potential revenue to be earned from project)

Includes:

- Budget Plan
- Which currency
- Level of accuracy for estimates
- Threshold limits for deviation
- Direct cost, indirect cost
- Change control
- Reporting

is to find out estimates of all activities (efforts for risks, project

management, quality, expenses, overheads, amount of profit to pay to seller) and resources to
complete project.

Time phased spending plan – Determine Budget

– that changes with production – material, wages, supplies

– the do not changes with production – rent, set up costs

– directly attributable to project – wages, travel expenses, cost of material

– used for overall, also for other projects – taxes, janitorial services

“Timing of when you buy something affects its cost”

Cost of human resources affects may be impacted by their availability

Estimates should be in a range

Rough order magnitude: used in initiating - -25 to +75%

Budget: -10 to +25%, when starting iteration

Definitive: later in the project, or baseline budget have -5 to +10%

Project Manager should know labor costs when doing detailed estimating

– rolling up lower level cost estimates up to project budget

– Cash flow for project spending plan

Cost baseline is time phased – form S-curve

Reconciling with any constraint: If after all effort estimate exceeds constraint, project manager
should explain to management that requirements cannot be met and propose options to
decrease cost.

– needs funds for the project, internal and external

Funds are part of the cost baseline

– Reassessing contingency and management reserves

Reserve analysis allows you to identify and apply lessons learned

Management reserves will pay for the workarounds

Earned Value Analysis helps in performance reviews and creating forecasts

– estimated value of the work planned to be done

– estimated value of the work actually accomplished

– value of the work actually accomplished

If question on exam asks about Schedule Performance Index or Cost Performance Index to
concern about, concern about one with low index.

When a trend is followed in question and no other information available that trend will continue,
BAC/CPI is used to calculate Estimate at Completion.

What is acceptable quality and how it will be measured, know in advance.

– the degree to which the project fulfills requirements

Requirement Gathering Effort, Requirement Documentation, Project Scope Statement is

important for Plan driven projects.
User stories includes quality requirements for change driven or agile projects.

– having the same functional use but different technical use.

Following points clarify how quality management efforts fit into managing a project in real world:

- Customer determines the requirements

- Project Team clarifies the requirements
- Project Team clarifies what work will be done to meet those requirements
- The Project manager along with Quality department determines the relevant
standards, policies and procedures
- Quality management plan is developed
- Project Manager integrates quality with other knowledge area plans to get an
approved project management plan
- Team executes the project management plan
- Quality of project deliverables against planned metrics and standards is
evaluated (Quality Control)
- Quality audit is performed to check that plans, procedures and standards are
being followed (Quality Management)
- Results and deliverables are verified
- Lessons learned are documented and shared
- Change requests are sent to integrated change control
- Plans are adjusted and revised as per change requests
- Verifies deliverables are accepted by the customer

“Avoid Gold Plating”

Prevention over Inspection – Philip Corby

Total Quality Management – W. Edwards Deming (Continuous improvement at all levels)
Sigma – Standard Deviation – Variance from mean
More Sigma – Less deviation and variance allowed
Just in Time – Higher Quality and on schedule

Project Manager is responsible for quality of product of project but team members should
inspect their work before submitting.

Scope Baseline helps project manager maintain the proper perspective and plan quality to the
appropriate level.

Standardize the processes

Identify customers quality standards – in contract or during collect requirement process

Stakeholder Engagement Plan, Stakeholder Register, project deliverables, risk thresholds and
approval requirements in project charter influence Quality Planning.

The Cost of conformance should be less than the cost of non-conformance

 – the point at which benefit or revenue from improving quality equals
the incremental cost to achieve that quality.

are used to create and refine plans that best meets the quality
requirements

are used to sort quality requirements most critical to the project.

Quality Management Plans and Quality Metrics are output of Plan Quality Management.

is performed while execution

includes audits, failure analysis and design of experiments
Test and evaluation documents are prepared in this process to be used later in control quality

The following questions are answered:

Are planned policies and procedures giving us the required results?
Can process efficiency be improved?
Have we planned the right quality level and plan?

Tools of Manage Quality Process:

– to check all steps have been completed, finding issues in process, deliverables
meet acceptance criteria
– this tool helps us
look back at what may have contributed to quality problem
– analyze the type and frequency of defects to define where quality
improvement is required
– compares two variables
– reviewing test and quality reports
– Design of experiments is a fast and accurate alternative analysis
technique that allows you to systematically change the important factors/variables in a process
to see which combinations have optimal impact on project deliverables.
– focuses on continuous improvement of project processes
- helps prevent defect to reoccur, Failure analysis is a type of root
case analysis
– complex method of numerically assessing options based
on criteria such as cost, quality and time. (Prioritization matrix)
Flowchart – use to study the steps that lead to quality problem
– help you analyze and group the results of root cause analysis
– Third party inspections, if not done by QC department then Project Manager can
lead this process
– analyze quality attributes
 – respond to deficiencies, long lasting solution, quality improvements.
Standard Problem-solving steps are:
1- Define the problem
2- Analyze the problem
3- Identify solutions
4- Pick a solution
5- Implement solution
6- Check if the solution solved the problem

Output are Test and Evaluation reports – produced in manage quality and used in Control
quality, includes format to check if standards are met e.g. Checklists.

Quality reports – results of manage and control quality processes

– control/measure of quality of deliverable, conformance from customer

Control quality of product Control quality of plans, policies, procedures

Defect is measured and corrected Defects are assumed to indicate issues with
plan, policies, procedures

Concerned about quality of product, variance, acceptable limit and improvements

– if two things cannot occur at same time

– likelihood that something will occur

– probability of one event occurring does not affect probability of

another event occurring

– measure of range, how far from mean, statistically stable or not

Control Quality tools are used to meet the requirements so that deliverable is ready to move to
the validate scope process.

– used to confirm that all features are present in the deliverable. Common
checklists become part of OPAs.

– like check list, is used to record inspection result frequency

– checking some quantity out of a lot, lot size and frequency

determined in plan quality and actual sampling done in control quality

Used to gather data about quality problems in detail

– comparing results of control measurements and comparing with

metrics of plan quality

– To identify the real/underlying cause of quality problem

 – audits or walkthroughs - changes have been made correctly or not

and its parameters are determined in Manage quality process and used in
Control quality process to determine if the results of process are within acceptable limits.

– determined by Project Manager, and stakeholders

define acceptable range of variations

– middle of the range of acceptable variation

– are customers’ expectations, to meet customer specification limits,

performing organization’s control limits should be stricter than specification limits

Out of control, assignable cause/special cause variation or rule of seven (7 points on one side of
mean, not random)

– creative way to look back at what

caused the problem and what will be impact of it on project deliverable. Stimulate thinking,
organize thoughts and generate discussions

– represented by bars
helps focusing on problems causing the most defects

– Positive, negative or no correlation between two variables compared

Verified deliverables, validated changes, measurements, work process information, updates are
output of control quality process.

Tip:

- If situation is looking forward in time, tool used is plans quality tool

- If looking backward in results, tool used is control quality tool
- If looking back in process and procedures, tool used is monitor quality tool

- Resources includes human, physical & material resources

- Reward system should be implemented
- Projects are planned by the team and coordinated by the project manager
- Project Team consists of Project Manager, Project Management Team and other team
members who will be doing the work of the project
- Roles, responsibilities and authority are decided in planning and documented in resource
management plan

Read Pg. 367 and 368 carefully of Rita

Project Manager should Negotiate with resource manager for optimal available resources.

The goal of lean (agile) management is to eliminate waste of resources, time and effort
Project just not mean completing the work packages it also includes risk, quality and project
management efforts

Project charter includes pre assigned resources and budgetary constraints for hiring
resources

relates work packages and activities to

team members

same as RAM the only

difference is that in RACI only one person will be accountable for a work package

is used to assign responsibilities as per

divisions and departments in an organization

breaks down work according to type of

resources (people, material, equipment)

studies how organizations solve problems and increase

efficiency

Resource Management Plan, Team charter (ground rules created by project team members)
and Assumption log update are outputs of Plan Resource Management process

Inputs: Resource Management Plan, Scope Baseline and Activity List

Resource calendar identify work hours, holidays and show the availability of resources

Resource Histogram shows number of resources required per time period. Negotiating,
procurement and adjusting schedule happen because of it

RBS is iterated in this process

Ongoing throughout project work

Acquiring resources as they are needed is an example rolling wave planning

Virtual teams – challenging to manage but benefit from expertise of team member at
distant location

Halo effect – a person performing good in one role might not be able to perform in another
role with same efficiency

Outputs: physical resource assignments, work assignments and resource calendar

Ongoing throughout project
Decrease turnover, increase knowledge, skills and teamwork

Motivation theories: best way to gain cooperation is to give rewards or motivation

- McGregor’s Theory of X and Y:

Manager X: people do not work, must be watched closely
Manager Y: People are willing to work, does not need supervision

- Maslow’s hierarchy of needs: People are motivated by Physiological, safety, social,

esteem, self-actualization

- McClelland’s theory of needs: people fall in one of the categories of motivation

Achievement, affiliation, power

- Herzberg theory of motivation:

Hygiene Factors: losing them destroys motivation: working condition, salary, personal
life, relationship at work, security, status
Motivating agents: responsibility, recognition, self-actualization, professional growth

“Giving salary raises is not the most effective method of motivating people”

by Project Manager, throughout project from early stages to end

Involving members in WBS creation and planning increase team building
Trust, recognition and reward system best builds teams

Forming (Team brought together), Storming (Team learn to work

together with disagreements), Norming (Team builds good working relationship and trust),
Performing (Team works effectively together), Adjourning (Team is disbanded)

Influencing: Listening, influencing and develop mutual trust with team members

Individual and Team assessments: throughout project by Project Manager during Develop
team process, given performance evaluation of members and team.

Training: If its benefits Team Member hired for longer period of time, include in organization
budget

Project Performance Appraisals: based on Individual performance, performance evaluation

happens as part of manage team and rewards/training given as part of develop team.

Colocation: increase communication, decrease conflict

Communication Technology: email, video conference, portal. Helps greatly in virtual projects

Outputs: Team Performance Assessment

Effective Team management strategy should be there.

Issue log – updated as part of project documents, includes issue, riser, appointee, date
raised etc.

Situational leadership – adopt leadership style based on situation, at start of project style
should be directional, during execution coaching style should be adopted and later on
facilitating should be adopted.

the best forms of power are expert and reward. Penalty worst.

should be resolved by those involved in it; Project Manager possibly assist. If

someone breaks law, policies, Project Manager have obligation to report to high authorities

Conflicts arise due to:

- Unrealistic schedules
- Priorities
- Resources
- Technical opinions
- Administrative procedure
- Cost
- Personality (last)

Who is authorize to solve this conflict? What is urgency? Will it benefit customer?

Collaborating (Problem Solving) – best choice – win – win situation

Compromising (reconciling) – lose – lose situation
With drawl (avoid) – do not delay, deal with it
Smoothing (accommodating)-focuses on agreements then differences
Forcing (directing) – win – lose situation

- Ability to recognize and express emotions appropriately

- Perceive and manage emotions being expressed by others
- This trait is an asset for Project Manager because it enables to bring out the best in
team members

Outputs: Release of team members occurs in this process. Planning to release team is
included in Resource management plan

Physical resources being managed by this

Performance reviews, trend analysis, Problem solving (long lasting)

Outputs: Work performance information and update

 should be based on stakeholders and project
needs for information.

Stakeholder engagement plan, Resource management plan and Project charter are used as
input for this process.

Project Manager need to gather client communication requirement, also how and when they
want to be communicated.

Only the information required should be shared at right time and should add value to process

Flow of communication can be internal/external, upward/downward and horizontally among

peers.

- Information can be expressed as Formal Written/Verbal or Informal

Written/Verbal

Correct, Concise, Clear, Coherent, Controlled

– Receivers perception of message, distractions and lack of interest can act as barriers in
communication i.e. called Noise

Interactive model of communication: both sender and receiver communicate effectively with
each other.

Effective Communication:

Non-Verbal - Gestures, facial expressions, body language

Verbal – Words, phrases, pitch, tone

Interactive communication – one person provides information other receives it and respond in
real time

e.g. phone calls, meetings, instant messaging and video calls

Push Communication – one person provides information but does not expect feedback e.g.
status reports, emailed updates, blogs and company memos

Pull Communication – Recipient is responsible for retrieving the information from a central
location sender has placed. E.g. Company portal

Communication Requirement analysis helps in understanding stakeholder requirements.

: n(n-1)/2 (include yourself if not mentioned)

communications requirements planned in Plan communications are met in this process by
reports, email…

Communication Blockers: Noise, distance, improper encoding, culture, language

Communication and interpersonal skills, meetings and

Reporting: work performance reports and outputs of monitor and control project work,
presentations, blogs, reports, asking for feedback

Reports must be truthful

Types of Reports: status, progress, trend, forecast, variance, earned value, lessons learned

Distribution of these reports is the output of Manage communication process.

To check if the plan has been followed and stakeholders

are receiving the required reports.

PM should not deal with problem it should focus on preventing them.

Effective Risk Management helps increase probability and impact of positive risks and
opportunities.

Risk response should be identified, planned and implemented for both positive (opportunities)
and negative (threats) risks.

Risk is managed and planned from initiating, while executing up till closing

Secondary risk: when a newly discovered risks create another risk

Uncertainty is the lack of knowledge about something and can introduce risks

- Probability (how likely)

- Impact (possible outcomes)
- Timing (when)
- Frequency (how often)

Risk Appetite (Risk Tolerance): Acceptable limit of risk for a person/organization

Risk Threshold: Point at which risk becomes unacceptable
Risk Averse: Someone who does not want to be negatively impacted by risks

“For risk management processes, inputs of one process are the outputs of process before it.”
The Network Diagram is part of Project documents, path convergence shows risks, the tighter the
schedule more the risk.

Risks are reviewed in every meeting, triggers are discussed, risks should be addressed before they
happen

If an unknown risk occurs, we develop for them

Risk management process is iterative, can occur any time

Inputs:
- Project charter
- Project Management Plan
- Project Documents (Stakeholder Register, they can view risks better then team)
- EEF
- OPA

Output i.e. includes:

- Strategy
- Methodology
- Roles and Responsibilities
- Timing
- Funding
- Risk Appetite and Thresholds (this info used when ranking risks based on probability and
impact matrix and when prioritizing which risks will be addressed)
- Definition of Probability and impact matrix
- Reporting
- Tracking
- Risk categories (broad terms and classification of risks) (source of risks)
- Risk Breakdown Structure is organizational chart that helps you identify and document
risk categories

Business Risk: Risk of gain or loss

Pure Risk insurable: Only risk of loss (theft, injury, fire)
: Risk that caused due to inability to predict future changes
Risk occur due to lack of understanding

Everyone should be involved in risk identification

An assessment of overall project risk is involved in project charter

Risk identification occurs during integrated change control, when working with contracts,
resources and project issues.

Assumptions and constraint analysis: if valid they lead to more risks

Strength, Weakness, Opportunities, Threats SWOT Analysis
Prompt List: list of categories of possible sources of risks
Output
: The risk register captures details of identified individual project risks.
Result/output of every other risk process gets noted in risk register
List of risks, owners, response plan, root causes and categories of risks.

: The risk report presents information on sources of overall project risk, together
with summary information on identified individual project risks
submission to client for risk management updates

Risk responses gets documented both in identify risk (potential responses) and plan risk
responses (selected response plan) process.

Analyzing probability and impact of risks to shorten the list of risks (from risk register) that warrants
action. Iterative process.

Understanding quality, reliability and integrity of data available for the Risk.

Standard rating system to promote a common understanding of what each risk means
Scale for measuring rating and interpretation of risk and impact should be used

Further shortens according to urgency, dormancy (the time between risk occurrence and
impact), manageability and controllability etc.

Outputs are updates to

project documents specially to risk register
Risk Ranking e.g. This risk has 4.8 value
Prioritized Risks
Watch List (Non critical risks)
and
Risk reports
Comparison of risk of project to other projects risks
Decision of project to be continued or not / if proceed to Quantitative analysis

Numerically analyzing the probability and impact of risks

Quantified probability of meeting project objectives (70% chance of meeting project objective)

To find out Highest rated most impacted project.

Tools
: use computer programs, network diagram and estimates to perform the project
many times and stimulates the results.
: analyze and compare the potential impact of identified risks, tornado
diagram

: Finding best option based on monetary value

E = P x I (Positive for opportunities and negative for threats)
Performed during quantitative risk analysis and revised during plan risk response when
calculating contingency reserves

Outputs:
- Risk register updates
- Prioritized list of quantified individual project risk
- Quantified probability of meeting project objectives (we have 80% chance of
completing project within $80,000 budget).
- Trends
- Initial contingency time and cost reserves (Final during plan risk responses)

Eliminate the risks

Increase probability of opportunities
Decrease probability of threats
Contingency plans
Fallback plans (when contingency not works)

Avoid: Eliminate the threat by eliminating the cause (for high risks)
Mitigate: Reducing the probability & impact of threat (for high risks)
Transfer: Third party sharing of risk (insurance) (for pure risks: fire, property damage)

Residual risks: risks that remain after risk response implementation

Secondary risks: that arise when response is applied

:
Exploit: making sure that opportunity occurs (opposite of avoid)
Enhance: increasing the probability & impact of opportunity (opposite of mitigate)
Share: partnership or joint venture

:
Escalate: when out of scope of project or beyond project manager authority
Accept:
Passive: if it happens, workarounds
Active: planning contingency reserves

Outputs: Updates in Project Management Plan, Risk Report, Risk Register

Risk Triggers: early warning signs that triggers the contingency response. (e.g. missing a
milestone)

“When calculating contingency reserves for project add EMV/reserves for threats and subtracts
EMV/reserves for opportunities.”

During execution Project Manager should watch out for watch list, new risks and triggers

Watch for triggers, timely response to risk

Risk Reassessment: periodically reassess risk register and risk management plan

Meetings:
Risk reviews: what risks still need to be addressed, what needs to be closed, secondary risks.
Closing saves risk reserves and returned to company

Risk Audits: overall risk management

Outputs: updates, work process info, change request

Project Manager need to explain Risk process to team

Risk of project should be discussed while making contracts
Read Pg. 483 and 484 of Rita Mulcahy.

Project Manager should be able to create, read and manage contracts and documentation.

Contract are agreements, but agreements cannot necessarily be contracts.

mutually binding, external – with other organization, monetary, can be challenged

in courts, formal written appropriate legal action
internal – with in organization, used to express and outline the intensions of
projects SLA, LOA, conversation followed by an email

Project Manager should have good working relationship and communication with procurement
department, should be involved early in the procurement process

Read Overview of Procurement Management Process on Pg. 499 – 501 from Rita Mulcahy PMP
Exam Prep 9th Edition to clear your concept for Procurement process.

“In exam, if not mentioned then assume you are Project Manager of buyer organization.”
Contracts should be formal and correspondence should be formal written
Formal change order should be followed to do any change
Legal binding nature of contract should be kept in mind
 (Proper procurement department with procurement manager
reporting to procurement organizational head)
(Project Manager doing all procurement)

Make or buy analysis

What to be purchased
How to be purchased
Who are sellers?

Inputs:
Project charter
Business documents
Project documents: Team Assignments, requirements documentation, project team
requirements, Risk register, stakeholder register
EEF
OPA (Prequalified Sellers)
Preapproved Seller List

Make or buy analysis

Lead time for material procurement should be in consideration

Learn about Lease cost vs Purchase cost

criteria to procure seller

includes

How material/services will be delivered

Contract type
How procurement will be carried out throughout the project

Depends on:
- What is being purchased
- Completeness level of statement of work
- Effort buyer wants to spend
- Incentives offered by buyer
- Economy
- Industrial standards

- Fixed $1000 per month

 - Goods with well-defined specification or requirements
- Clearly defined SOW and bid documents (sellers Concern, if not then risks,
cost reserves, disputes and delays)
- Buyer has least cost risk in this project
- Less work for the buyer to manage (e.g. you need work done but don’t
want to audit invoices)
- Seller controls costs
- Buyer knows total price contract
- Seller may charge more to make profit
- Seller might not complete contract
- Buyer should provide complete contract and procurement statement of
work

Purchase orders are type of fixed price contracts (unilateral contracts)

- Some amount will be also given if specific requirement is fulfilled

- $1000 plus $500 for every month the project is finished earlier
- FPIF Successive Target Contract: when incentive amount is changed after
first target achieved
- E.g. you need to rebuild the bridge as soon as storm is finished

- Same like FPIF, only change is award fee is fixed amount and decided in
advance
- $1000 plus $500 for every month the project is finished earlier, out of
$10000 award fee
- Award fee vs benefits measurement analysis should be performed

- Contract that adjust itself with economic changes

- $1000/month but price increase will be allowed in year two as per
material cost changes
- When economy is unpredictable

- Used when level of effort cannot be determined when contract is

awarded (for projects on small dollar amount and small period of time)
- Pays on per hour or per item basis
- Mixture of Fixed Price and Cost Reimbursable contract
- Seller profit built into rate
- $1000 per hour plus material cost
- Created quickly (e.g. you need to begin the work right away)
- Good choice when hiring people (e.g. buying a programmer’s services)
- Seller does not control costs
- Seller has profit for every unit billed
 - This contract type is only for work with small level of effort

- Scope is not finalized

- Incurred cost + award fee (for profit)
- Buyer at cost risks
- Simpler Procurement SOW
- Less costly than FP contract
- More work for buyer, need to audit seller invoice
- Total price is unknown

- Cost of work and materials

- Nonprofit organization

- Incurred cost-plus negotiated fee (usually percentage of cost of project)

fixed at start
- Fee does not vary with costs
- $1000 plus a fee of $1500

- Cost plus fee based on achieving specific performance objective

- Original estimate of the total cost is made (Target cost)
- Fee for work is determined (target fee)
- The seller gets the percentage of savings if the if the actual costs are less
than the target costs or shares the cost overrun by the buyer
- $1000 target cost and $600 target fee (will share cost overrun or savings at
80/20 ratio.

- Cost plus base fee plus award fee (based on performance criteria)
- There is no possibility of penalty
- $1000 plus $500 fee plus award for meeting client criteria (max $15000
award fee)
- e.g. when you want best quality in finished product

- Not recommended

The final contract type is subjected to negotiation with the seller

to motivate the seller’s effort and to discourage inefficiency

 Pg. 519 – 525 from book Rita Mulcahy PMP Prep 9th Edition covers Incentives
calculation. You must read and understand the questions. In exam you can find 2
to 3 questions related to Incentives calculation.

- The work to be done on each procurement is described in here, should be

as complete as possible
- Revised at contract negotiation, finalized by signing

Types:

- Performance (what the final product should accomplish)

- Functional (includes end purpose, result or essential characteristics)
- Design (precisely what work is to be done)
- Terms of Reference (used when services are procured)

“When the buyer receives the sellers’ responses during the conduct procurement
process, Source selection criteria such as cost, quality and expertise becomes the basis
for the evaluation of the bids or proposals”

-
- what to do, how to do, who will do and at
what price
- Total amount to do
the work
- Per item-based amount to do the work
- To get more information

“Changes to the contract asked by seller before contract signing is issued by buyer as
addenda”

Creating the contract requires the involvement of both project and procurement manager

Risk of loss is borne by the seller and covered by insurance

Letter of intent is not a contract but a letter giving confidence to seller that contract will surely
be signed and you should carry on with procurement and other works.

Privity means contractual relationship

: when you want to do business with only one specific seller, e.g. master service
agreement

: there is only one seller. E.g. Seller holds Patent

Send bid documents to seller, answering their questions, negotiating, evaluating responses

Input Project Management Plan, Cost baseline (approved budget for procurement), schedule
baseline (when should procure), lessons learned documents (OPA – Preapproved sellers)

To inform sellers, to update potential seller’s list

Prospective sellers identified, bid documents sent, then arrange this conference to answer seller
questions (becomes part of bid documents as addenda).

Project Manager should look for (questions not coming and all questions are
answered or not)

(official offer from seller)

- Proposal is response to RFP

- Price quote is response to RFQ
- Bid is response to RFB, IFB

Response to a seller RFI lead to creation of RFP, RFQ

- Eliminate if not meeting minimum requirements

- Then use source selection criteria
- To select a seller direct go with one, request presentation or select prospective seller and
then request presentation.

- If response is to invitation to bid, lowest responsive responsible bidder wins

- If response is to invitation to proposal then buyer use source selection criteria using
weighting system (which is more important cost, experience, schedule?)

to cross check the reasonableness of proposal

- Not used in fixed price as scope is completely defined

- Used on T&M and CR contracts to settle costs and fees,
- Once contracts are finalized used in all contract types to proposed changes
- Project Managers should be involved in negotiations for technical and key objectives
- Obtain a fair reasonable price and good relationship between both parties should be
Negotiation Objective (win-win)
- Main items to negotiate are scope, schedule (more important than cost) and cost and
other items should be payment terms, applicable laws, risks, quality pm process.
Depends on what is being purchased.
- To make things legally binding, define roles and responsibilities, mitigate or allocate risks
- Boiler plate language of the contract should be understood
- An offer, acceptance, consideration, legal capacity, legal purpose

Outputs
- Selected Sellers: both parties have agreed to terms and conditions and will move
forward to creation of product.
- Change requests
- Updates: Pre-approved seller list, resource calendars ad requirement traceability matrix
and risk register

- Managing the legal binding and checking if both parties are performing as per contract
- Approved change requests from integrated change control are implemented in this
process
- Inputs are project management plan, lessons learned register, quality reports, baselines,
work performance data tell current status
- Variances, approved change requests, contract changes are handled by contract
change control system (EEF): this includes change procedures, forms, dispute resolution
process and tracking system
- Review Invoices
- Evaluate, Manage, Submit and integrate approved changes
- Hold procurement performance review meetings (to check buyer-seller relationship, how
the work is progressing)
- Inspections (do deliverables meet specification)
- Audits (confirmation of seller activities as per standards and procedures)
- Issue and review claims by seller
- Accept verified deliverable and make final payments
- Validate the correct scope is being done
- Validate that changes are giving the intended results
- Identify, monitor and control risks

Claims are usually addressed through the contract change control system. The best way
to handle them is through negotiation or the use of the dispute resolution process
specified in the contract. Many claims are not resolved until after the work is completed.

“If a requirement is not in the contract, it does not have to be met, even if it was agreed
upon prior to signing the contract”

occur when the buyer limits the seller’s ability to perform the
work according to contract (e.g. over inspection or failure to cooperate)

(When contract is closed or terminated)

- Verifying all work and deliverables are accepted
 - Finalizing open claims
- Paying withheld retainage
- When there are many changes it is better to negotiate a new contract
- When contract is terminated, the seller is usually paid for work completed and work in
process
- All procurements must be closed out, no matter the circumstances under which they
stop, are terminated, or are completed. Closure is a way to accumulate some added
benefits, such as lessons learned. It provides value to both the buyer and the seller and
should not be omitted under any circumstances.
- All procurements must be closed as part of monitoring and controlling, before final
project closure.
- When the project as a whole is completed later, the project manager performs the final
administrative and financial closure along with other processes required to close out the
project.

Following points should be followed for Procurement Closure:

- Product Validation – Checking that all work is completed

- Procurement Negotiation – Final settlement of all claims and invoices
- Financial Closure – making final payments
- Audit of procurement process – Structured review of procurement process to compile
lessons learned
- Updates to records
- Final contract performance reporting – Final Report including success or failure of
procurement
- Lessons Learned – created as a result of the audit
- Procurement File – includes all emails. Letters, conversation, payment receipts etc. into
and organized file that will be stored as historical records.
- The close project or phase process includes confirmation that contract closure has been
done satisfactorily.

If a question describes some activity and that activity occurs after the procurement documents
are created and before the contract is signed, then it must be taking place as part of the
Conduct Procurements process. If it is taking place during the time after the contract is signed
through when the work is substantially done, it must be occurring during the Control
Procurements process.

Identify Stakeholder, analyze their power and influence, determine expectations (what they
think will happen) and interest, requirements and engagement management is done
throughout the project

All stakeholders should be identified early in the project and reassessment should continue
throughout the project for identification

Team should be involved in identifying process

 is done individually and is done in groups

Stakes: ownership, knowledge, rights, interest and contribution

: grouping to manage engagement of stakeholders

Power/interest grid

Stakeholder cube

Salience model (power, urgency, legitimacy)

Output:

(revised throughout project)

Stakeholder Register Includes: Name, position, contact, role, influence, power, impact and
classification

Project plans and documents update

plan how you will build relationship with stakeholder,

If stakeholder not known to you talk to person who knows them

Think about attitude and interest of Stakeholder to properly plan current and desired level of
engagement

Stakeholder Engagement Assessment Matrix, data representation tool to plan Stakeholder

engagement

Assumption and constraint analysis, root cause analysis

: planned and desired level of engagement, how to

achieve it, metrics for how well the plan is meeting requirements of stakeholders

Communications management and stakeholder management plan have lot in common, Prior
provides technology, method and model (what when and how) of communication and later
provides why of communication, why someone needs to receive this info and how it will benefit
engagement

Meet stakeholder needs, resolve their issues and making sure they remain interested and active
in the project

Going throughout the project

Communication should be strong to develop strong relationship which will benefit

Outputs: Updates to documents

Reassessing stakeholder register, updating stakeholder information, adding new stakeholders
and when the one who are no longer necessary

Input: Resource, communication and stakeholder engagement plan, issue log, risk register

Collect and analyze data

 Following are the main points and strategy that I followed to pass my PMP exam.

- You should learn formulas given at the start of this book and practice writing all of them
on a paper until you are able to write all of them.
- You should also know the Project Planning process in exact sequence as given at start of
book and practice writing all of them on a paper until you are able to write all of them.
- You should know which process belongs to which process group and knowledge area, in
such a way that you should be able to answer which process comes next or after each
one.
- You should read Rita Mulcahy PMP Exam Prep 9th Edition at least 2 times and refer to
PMBOK Guide (if you still feel unprepared)
- Attempt all exercises given in the Rita book.
- You should carefully understand Rita Process Chart given in the same book.
- I attempted practice exams that helped me a lot in clearing my concepts. (Links for
practice exams are given below)

1. https://www.test-questions.com/pmp-exam-21.php#
2. https://www.oliverlehmann.com/pmp-self-test/100-free-questions.htm.
3. https://pmstudycircle.com/2017/09/list-free-pmp-mock-tests-sample-questions/
4. https://www.edwel.com/Free-Resources/PMP-Certification-Practice-Exam.aspx
5. https://www.edwel.com/Free-Resources/PMP-Certification-Final-Exam.aspx
6. https://pmstudycircle.com/2016/11/free-pmp-exam-sample-questions

- You should attempt practice exams also to check your time as you have to complete
200 questions in 4-hour time (i.e. 1.2 minutes per question)
- In my PMP exam, I attempted questions in sequence from 1 to 200 not giving more than
a minute to a question and put FLAG on complex or lengthy questions. In this way I
attempted more than 120 questions in a go and that left me with plenty of time to
attempt the flagged questions and also to check attempted earlier. You can follow the
same or you can develop your own strategy. REMEMBER TO ATTEMPT ALL QUESTIONS!
- You should be fresh and well rested before exam.
- Your authorization letter provided by PMI should state the same name as on your ID card.
- Wear layered clothing
- Carefully read instruction and tutorials
- Control your frustration during exam
- Follow Project Management methodology to answer the exam and not your own project
management style
- Carefully choose the correct and best answer by reading all options
- Use all your time
- I want you to read Chapter 15 of Rita Mulcahy Exam Prep 9th Edition before you give the
exam.
Following are the notes I jotted down after attempting the practice exams (links given on
previous page). First you should attempt the practice exams then return to this page to clear the
concepts.

- Degree of uncertainty of any variable can be measured by Tornado Diagram

- Local Customs of any country should be respected and should be followed by Project
Manager
- Scope Creep can happen if communications are not done properly
- Expert judgement is not a tool and technique of Manage stakeholder engagement
- Balanced matrix power is shared by both Project Manager and Functional Manager
- Seller Risk is more in Fixed Price Contract and less in Cost reimbursable contract
- Point of total assumptions – the point of time where seller has consumed all the fees and
now shares costs
- Contract addendum will be signed if any change had to made in Agreement
- Sub plans are management plans
- Discretionary dependency – preferential or preferred logic
- Change log is use to log all approved and not approved changes and their impact
- Contracts go through intensive approval process
- Scope verifications also use to check level of completion
- Padding is use to add time as buffer to schedule, poor Project Management practice
- Negative float means project is behind schedule (add more resources)
- Buy Vs Lease (8X = 1000 x 4X) (Hint for questions about make or buy analysis)
- Data point in control chart that requires investigation is called special cause
- Heuristics is called thumb rule
- Product description defines the contracted work based on requirements of customer
- Parametric Estimation includes Regression Analysis & Learning Curve
- A fair contract shares risk between buyer and seller
- Quality can be defined as conformance to specification
- Unilateral contracts are simply called purchase orders
- Number of near critical paths increase risks
- Low priority risks are maintained in watchlist
- Quality audits are part of manage quality
- When risk has occurred, it becomes an Issue
- Scope verification occurs at the end of the phase
- Product verification occurs at the end of project
- Resources should be assigned equally to critical and near critical paths
- There are 4 quarters in a year of 3 months each
- +/- 3 sigma – 99.73 % (0.27% will be rejected)
- Accuracy means correctness, how close to target value
- Precision means exactness, how close values are to each other
- Networking capital = current assets (cash balance+ inventory+ account receivable) –
current liabilities (accounts payable)
- Change Control Board (CCB) can submit change request
- Opportunity cost fetches maximum returns / cost of not selected option
- Lessons learned register is both input and output of manage project knowledge process
- Expectancy theory – expectation of people for reward
- Halo effect, Peter principle – one person doing good in one role will do good in another
- Extinction means the project is completed and accepted
- Stakeholder determines the requirements of project that has to be delivered, not the
customer
- Quality audits are not performed to find root cause
- Meeting not a Tool & Technique of Conduct Procurement process
- Project Coordinator has some power and Project Expeditor has not
- Output of Sequence Activities – Project Schedule Network Diagram
- Output of Develop Schedule – Schedule Baseline
- Tools to facilitate, measure and control quality:
- Cause and Effect Diagram
- Control Chart
- Check Sheet
- Histogram
- Scatter Diagram
- Flowcharts
- When contractor does not deliver desired product there is anticipatory breach
- In T&M contract, probability of cost increase lies with buyer
- RFP, RFI and IBD are procurement documents
- In strong matrix project manager has moderate to high power
- Email is informal written mode of communication
- Project Team and Project Management Team
- Risk Acceptance – contingency reserves should be added
- Trigger is a warning that indicate that risk is about to occur
- Liquidated damages are contractually agreed payments that will be paid to customer if
incomplete or late completion of project
- Critical path method – sequence of activities with least amount of flexibility
- Learn about tools and techniques used in Manage Team and Develop Team processes
- Risk owner will give the required level of effort for a risk
- Risk Appetite – the degree of risk which stakeholder can take in anticipation of reward
- Mutually Exclusive Project – Project with Higher NPV is selected
- Independent Project – Project with Positive NPV is selected
- If you pay close attention you will find that:
- Inputs and outputs are mostly documents
- Tools and Techniques are mostly actions
- Project Management Plan is input to Plan Processes
- Various plans are inputs to most executing processes
- Work Performance data is input to most M&C process
- Change Request and Work process information are output of most M&C process
- Project management plan and project documents UPDATES are output to most
M&C processes
- OPAs and EEFs are input to most processes
- Expert judgement and Meetings are T&T of most processes
- When see Plan, Estimate, Define – Plan process
- When see Manage, Conduct, acquire – Executing process
- When see Control, Validate – M&C process
- Analogous estimating is also called top down estimating
- Projects with Early year cash inflow are preferred
- Risk management plan can be started at any meeting
- Decision tree analysis
o Decision node
o Chance Node
o End of Choice
- Tacit knowledge cannot be found in OPAs
- Source selection criteria – attributes that should be possessed by seller to be selected for
contract
- Power – Interest Grid for planning and managing stakeholder engagement.

Keep Maange
satisfied Closely
Power
Keep
Monitor Informed

Interest

- Best Practice – specific sequence of work determined in soft logic

- Interrupting when appropriate is not an element of active listening
- Lessons learned register should not focus on errors of team members
- Customer expectations do not meet because of Poor risk management and technical
inability
- Payment of award fee is decided by customer
- Passive risk assessment – deals with risks as it occurs
- Interpersonal relations among team members are their own problem to deal with
- Performance reporting is the act of collecting and distributing progress reports, status
reports and forecasts
- Mandatory dependency is inherent in the nature of work
- Deliverables are not part of final report at project closure
- In Plan – do -check – act, act part is performed as M&C process group
- Clarifying and resolving issues in manage stakeholder engagement
- Lessons learned can be documented through-out but also can be documented at
closing stage only if project schedule was tight and Project Manager and team was busy
- Report any unethical behavior
- Accepted deliverable is an input to close project process
- Inform stakeholder if unidentified risk occurs near completion
- Change control system not included in manage communication
- Bottom up estimating is motivated by size and complexity of individual schedule activity
or work package
- Tuckman ladder – Forming, Storming, Norming, Performing, Adjourning
- Detailed assumptions are found in scope statement
- Risk reassessment for new risk emerged
- Configuration management plan includes change tracking system
- Performance appraisal focus on individual performance
- Project boundary is point where project/phase authorized to complete
- Project charter not applicable to control procurements
- Missing a milestone is a trigger
- Electric utilities for office – indirect costs
- T&M contracts are used to fix resource rates
- Report Nepotism
- Variance analysis is not component of effective change control
- Hammock activity – broader, more comprehensive summary activity
- PMIS – Informal push communication
- Stakeholders benefits from outcomes of projects
- Process analysis not used in define scope
- Source selection criteria is used to eliminate bias
- Change requests itself is not part of integrated change control process
- Defer with stakeholder
- Indirect costs should be included in activity level or higher
- ETC based on new estimate is the most accurate
- Include the delays in critical path if any
- Excessive decomposition breaks 100% rule
- resource management plan should be updated when someone leaves project
- Points closer to diagonal line are closely related in scatter diagram
- Continuous process improvement reduces wastes and add to value to activities
- Lessons learned from previous projects is crucial input in initiating
- Get at least single sponsor for project charter
- Compromise in communication if all members in different time zones
- Process decision program charts are helpful in contingency planning
- RACI illustrate the work force that will be working on each work package
- Defect frequency, failure rate, availability and reliability included in Plan Quality
Management
- Analogous estimation also called gross value estimation
- If there is no policy for accepting gifts in HR policy refuse the gift offered
- Project Management Team is responsible for professional and ethical behavior of Team
Members
- Stakeholder register cannot be used to respond to change requests
- Develop quality policy if not available
- Pareto chart is type of histogram
- Activity duration estimates should not include any lag or lead
- % range of acceptable variances will tend to decrease as more work is accomplished
- Control chart is not a risk diagramming technique
- ETC =EAC -AC
- Sigma distribution are not probability distribution used for quantitative risk analysis
- Cost of quality principle involves cost of ensuring conformance to requirements
- Accounting for the limited resources in the project schedule is called critical chain
method
- Quality audits are random and performed by external party
- Influence diagrams – causes influences, time ordering of events, relationship among
variables
- 6 sigma describes range of control limits applied over control charts
- Design of experiments identify factors that may influence specific variables of a product
under development
- Copyrights are project ethics
- Recall the deliverables from customer if not tested before handing over
 - Histogram: how many defects identified and how many remaining
- Scope management plan – state formal validation and acceptance
- Use management influence when needed
- The number of activity attributes varies by application area
- Update risk register if change is approved
- Colocation is also called tight matrix
- Stakeholder Involvement: Convert neutral to supportive stakeholder
- In matrix organization Project Manager is responsible to manage dual reporting
relationship
- Unresolved claims may still subject to litigation after closure of any contract in any phase
- Notify appropriate management immediately about any unethical activity
- Breaking activities into smaller components for more accurate cost estimating is called
bottom up estimating
- Detailed milestone list is produced in define activities processes
- Changes should be made as early as possible in project
- Difficult to combine and collect information at project end
- Project exclusion mentioned in Project Scope statement helps in reducing scope creep
- Overstating the cost estimate is primary risk with contingency reserves
- SOW contains business and strategic plan and product description
- Dynamic programming is an example of constrained optimization
- Murder board is benefit measurement method
- Regression line in scatter diagram can be diagonal, horizontal or parabolic
- Work authorization system is an EEF internal
- Scope baseline describes product scope in detail
- PERT estimating used when uncertainty in other techniques
- Tight Matrix - Colocation
- Following actions are done during Initiating processes
- Charter is developed
- PM is selected
- Charter is distributed
- PM engages with stakeholder for first time

I wish you all the best of luck to pass your PMP exam!