University of Mumbai

Program: ALL_Institute Level Optional Course 2

Question Bank
Curriculum Scheme: Rev2016
Examination: BE Semester VIII
Course Code: ILO 8021 and Course Name: PROJECT MANAGEMENT
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Objective Questions
Choose the correct option for following questions. All the Questions are
Q1.
compulsory and carry equal marks
1. Which is an example of Triple Constraint?
Option A: Scope, Human Resource, Time
Option B: Quality, Scope, Human Resource
Option C: Cost, Human Resource, Time
Option D: Scope, Cost, Time

2. The payback period for a project

Option A: is the initial fixed investment in the project divided by the estimated annual
net cash inflows from the project.
Option B: is the discounted cash flow method determines the net present value of all cash
flows by discounting them by the required rate of return
Option C: Also known as the benefit–cost ratio
Option D: the internal rate of return is the discount rate that equates the present values of
the two sets of flows.

3. Earliest expected time of completion for an activity is found using

Option A: Expected time calculation
Option B: Forward Pass method
Option C: Backword Pass Method
Option D: Crashing

4. Why does activities on critical path of a CPM network are called critical
Option A: They represent maximum project completion time
Option B: They cannot tolerate any delay in completion
Option C: They consume maximum rresources
Option D: These are most cpmplex activities on project

5. The lowest element in the hierarchical breakdown of the WBS is

Option A: Deliverable
Option B: Work package
Option C: Responsibility matrix
Option D: Bottoms up budget

6. Which of the following technique will ensure that impact of risk will be less?
Option A: Risk avoidance technique
Option B: Risk Mitigation technique

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Option C: Risk contingency technique
Option D: Risk monotoring technique

7. A risk is known as Positive risk or opportunity if-

Option A: Impact is positive which you may want to actualize
Option B: Impact is negative which you want to lesson its impact
Option C: Impact is positive which you want to lesson its impact
Option D: Impact is negative which you may want to actualize

8. A project is overbudget when

Option A: CPI > 1
Option B: SPI > 1
Option C: CPI and SPI > 1
Option D: CPI less than 1

9. What is a quality audit?

Option A: A team meeting dedicated to measuring and examinations.
Option B: A quality based inspection of work results.
Option C: A structured review of quality management activities.
Option D: A meeting with the customer to identify quality requirements.

10. Most important 4 values identified by PMI are responsibility, respect, fairness,
and
Option A: sincere
Option B: dishonesty
Option C: Honesty
Option D: workholic

11. Which amongst the following does not comes under Non Numeric Model of Project
Selection?
Option A: Non Linear Programming
Option B: The Scared Cow
Option C: The Operating Necessity
Option D: The Competitive Necessity

12. In which stage of team development the entire team act as a strangers?
Option A: Forming
Option B: Storming
Option C: Norming
Option D: Performing

13. _________________________ encompasses the processes used for making sure project
procurement is successful
Option A: Project Selection
Option B: Project Management
Option C: Project Resource Management
Option D: Project procurement management

14. Biggest challenges in leading Multicultural team is

Option A: Language Barrier

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Option B: Cultural Barrier
Option C: Building common trust and vision
Option D: All of above

15. ____________type of Audit is also termed as Inspection

Option A: Quality Audit
Option B: Risk Audit
Option C: Normal Audit
Option D: Procurement Audit

16. ___________ is developed to establish a common understanding of project scope.

Option A: Work Based Schedule
Option B: Work Based Specifications
Option C: Work Breakdown Specifications
Option D: Work Breakdown Structure

17. Budgeted cost for work performed (BCWP) or earned value is

Option A: Perceived Value
Option B: Planned Value
Option C: Earned Value
Option D: Derived Value

18. Schedule Performance Index is ratio of _______________

Option A: Earned Value / Planned Value
Option B: Earned Value / Actual Cost
Option C: Planned Value / Derived Value
Option D: Spend Value / Earned Value

19. Project Life cycle is plotted on 2 dimensional matrix. The dimensions are
Option A: Time Line v/s Budget
Option B: Time Line v/s Efforts
Option C: Efforts v/s Budget
Option D: Perceived Value v/s Efforts

20. Underestimation of the Project Costs result into

Option A: Project Failure
Option B: Interest Failure
Option C: Investment Failure
Option D: Extra Loan arrangement

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 Subjective Questions
1
Differentiate between the Functional, Pure Project and Matrix
organizations.

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2
What are the knowledge areas and process groups in Project Management
as per PMI?

● The Project Management Institute (PMI) created the PMBOK (Project

Management Body of Knowledge). It consists of guidelines, recommended
practices, standard principles, and common terminology for managing projects.
● The PMBOK guide embraces a process-based approach to project management. It
breaks down project management into 49 processes, which are then grouped
under PMBOK process groups and knowledge areas.
● Think of process groups as what you need to do and the knowledge areas as what
you need to know.
● What are the process groups of PMBOK?
● Process Groups bundle together processes that often operate around the same
time on a project or with similar input and outputs. Once you've got comfortable
with them they are actually a very logical way of grouping together the things you
have to do.

The five PMBOK process groups are:

1. Initiating Process Group: Processes required to launch a new project

or a new project phase.
2. Planning Process Group: Processes related to defining and planning
the extent of the project, as well as planning how it will be
executed.
3. Executing Process Group: Processes related to the actual
completion of project activities and tasks.
4. Monitoring & Controlling Process Group: Processes covering
everything related to tracking, monitoring, reporting on, and
controlling project performance and progress.
5. Closing Process Group: Processes required to finalize and complete
a project or project phase
● What is PMBOK Knowledge Areas?
● Each Knowledge Area is made up of a set of processes, each with inputs, tools and
techniques, and outputs. These processes, together, accomplish proven project
management functions and drive project success.

The 10 Knowledge Areas

○ Integration Management - is the processes required to ensure that
the various elements of the project are properly coordinated.

○ Scope Management - the processes required to ensure that the

project includes all the work required, and only the work required,
to complete the project successfully.
○ Time Management - the processes required to ensure the timely
completion of the project.
○ Cost Management - the processes required to ensure the project is
completed within the approved budget.

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 ○ Quality Management - the processes required to ensure the
project will satisfy the needs for which it was undertaken.
○ Human Resource Management - the processes required to make
the most effective use of people involved with the project.
○ Communications Management - the processes required to ensure
the timely and appropriate generation, collection, dissemination,
storage, and ultimate disposition of project knowledge.
○ Risk Management - the processes concerned with identifying,
analyzing, and responding to project risk.
○ Procurement Management - the processes required to acquire the
goods and services from outside the performing organization.
○ Stakeholder Management - the processes that identifies and
develops relationships with those people and organizations which
are impacted by the project and which influence or determine how
the team works.

3
What are the numeric and non numeric models of project selection.?

There are certain types of project selection models that are used to select the projects.
The selection of projects is an important part of the business. If you choose the wrong
project, this may go to waste instead of giving business benefits.

Types Of Project Selection Models

Following are the types of Project Selection Models:

Non-Numeric Project Selection Models

Non – Numeric project selection models have further 6 types, which we need to discuss
in detail.

● The Sacred Cow

● The Operating Necessity
● The Competitive Necessity
● The Product Line Extension
● Comparative Benefit Model
● Q-Sort Model

1. The Sacred Cow

● In this case the project is suggested by a senior and powerful official in the
organization. Often the project is initiated with a simple comment such as, “If you
have a chance, why don’t you look into…,”
● The project is created as an immediate result of this bland approach for
investigating whatever the boss has proposed. The sacredness of the project
reflects the fact that it will be continued until ended or until the boss himself
announces the failure of the idea & ends it.

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2. The Operating Necessity
Certain questions come in front of the project is needed in order to keep the system
functioning like is the estimated cost of the project is effective for the system? If the
answer to such an important question is yes, then the project costs should be analyzed to
ensure that these are maintained as the minimum and compatible with the success of
the project. However, the project should be financed.
3. The Competitive Necessity
● In the late 1960s, XYZ Steel considered an important plant rebuilding project by
using this criterion in its steel bar producing facilities near Chicago. It was clear to
the management of the company that certain modernization is required in its bar
mill in order to keep the current competitive position in the market area of
Chicago.
● Perhaps the project has a modern planning process, the desire to keep the
competitive position of the company in the market provide a basis for making
such a decision to carry on the project. Similarly, certain undergraduate and
Master in Business Administration (MBA) programs are restructured in the
offerings of many universities to keep their competitive position in the academic
market.
4. The Product Line Extension
In case of the product line extension, a project considered for development & distribution
of new products will be evaluated on the basis of the extent to which it suits the
company’s current product lines, fortify a weak line, fills a gap, or enhanced the line in a
new & desirable direction
5. Comparative Benefit Model
According to this selection model, there are several projects that are being considered by
the organization. That subset of the projects that are selected by the senior management
of the organization can provide the most benefits to the company. But comparing various
projects is not an easy task.
6. Q-Sort Model
The Q-Sort model is one of the most straightforward techniques for ordering projects.
According to their relative merits, the projects are first divided into three groups which
are Good, Fair and Poor. The main group is further subdivided into the two types of
fair-minus and fair-plus if any group has more than eight members.

Numeric Project Selection Models (Profit/Profitability)

The profitability is used as the only measure of acceptability by the majority of
organizations using different types of project selection models. The following are some of
the numeric models for project selection.

● Payback Period
● Discounted Cash Flow
● Internal Rate of Return (IRR)
● Numeric Model:Scoring
1. Payback Period

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 The payback period for a project is the initial fixed investment in the project divided by
the estimated annual net cash inflows from the project. The ratio of these quantities is
the number of years required for the project to repay its initial fixed investment. For
example, assume a project costs $100,000 to implement and has annual net cash inflows
of $25,000. Then Payback period
$100,000/$25,000 = 4 years
This method assumes that the cash inflows will persist at least long enough to pay back
the investment, and it ignores any cash inflows beyond the payback period.

2. Discounted Cash Flow

Also referred to as the net present value (NPV) method, the discounted cash flow method
determines the net present value of all cash flows by discounting them by the required
rate of return (also known as the hurdle rate, cutoff rate, and similar terms) as follows:

3. Internal Rate of Return

If we have a set of expected cash inflows and cash outflows, the internal rate of return is
the discount rate that equates the present values of the two sets of flows. If At is an
expected cash outflow in the period t and Rt is the expected inflow for the period t, the
internal rate of return is the value of k that satisfies the following equation (note that the
A0 will be positive in this formulation of the problem)

4. Numeric Models: Scoring

These models involve multiple decision criteria for selecting a project. In scoring models,
the decisions are taken after discussions between the project team and the top-level
management. Following are the types of scoring models:

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 ● Unweighted 0-1 factor: The management lists the factors that are considered
in rating a project. Management consists of a team of raters who help selection
of the project.
● Unweighted factor scoring: In this model, the raters can select any of the
values on a scale of 1 to 5 in which 5 is very good, 4 is good, 3 is fair, 2 is poor
and 1 is very poor.

4
What are the contents of a Project Charter? Who prepares and authorizes
the Project Charter?

A project charter is a formal, typically short document that describes your project in its entirety —
including what the objectives are, how it will be carried out, and who the stakeholders are. It is a
crucial ingredient in planning the project because it is used throughout the project lifecycle

Content Of Project Charter:

Each project manager has their own way of writing the project charter. Some have
predesigned forms that only need to be filled out, others write each charter from scratch.
No matter which way you go, the structure of all charters is similar. It has to outline the
main goals, risks, requirements, timeline, and resources.

1 – Goals

Project name

The first thing you will want to include in the project charter is the name of the project,
when was the charter prepared, and by who.

Project goal

Next up you will have to define project charter with a goal. When writing the project goal,
keep it short and easily understandable

Project scope

Lastly, define the project scope. Decide what will be included in project execution and
what won’t. This step is important to control the project length and budget, as well as
making sure there is no scope creep once the team gets going.

2 – Risks
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Risks

First, consider the possible risks. Are your competitors doing something similar and can
beat you to market? Can the market change and the outcome of the project become
irrelevant? I

Dependencies

Second, focus on the dependencies that can affect your project delivery. Are you waiting
on another project to be finished? Are you dependant on particular suppliers?

Limitations

Lastly, turn the focus back to yourself and define all the limitations this project will face.
Think about what on your end can interfere with delivering the project on time and in
full. Do you have limited resources? Maybe you have to fit into a tight budget?

3 – Requirements
The third section of the project charter should be related to the project requirements and
success criteria. Both of which will help understand the project needs and what will make
it successful.

Requirements

For the requirements, you should list the human resources, office space, tools, and
processes that will be needed to complete the project. Also, think about any specific
requirements this particular project may have.

Success criteria

Next, focus on what will make your project a success. More specifically, list out the
success criteria. A good way of doing this is thinking about all the stages of the project
and what the project team has to do to achieve them.

4 – Timeline
The fourth project charter section is all about the timeline. To help monitor the progress
of the project, you should specify how the team and the stakeholders will be able to track
it.

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There are several ways of doing this. You can identify the project milestones and define
them with due dates

5 – Resources
There are three aspects to focus on – project manager authority, stakeholders, and
budget.

Project manager authority

It is the project sponsor that is responsible for assigning and confirming the project
manager. However, as the project gets going the decision-making responsibility lies on
the project manager’s shoulders.

Project stakeholders

Next up, you should identify all the project stakeholders. Think about both internal and
external stakeholders as well as the team that will be working on the project.
Furthermore, define how all of these people will communicate during the project.

Project budget

Lastly, review all the project goals, requirements, risks, and timelines to estimate the
project budget. This an estimation based on all the information in the project charter,
meaning it will give you a general idea of the required investment.

How to create a project charter

1. Understand project goals and objectives: Identify the project vision and

determine the scope of the project

2. Define project organization: List all of the essential roles for the project, including
customers, stakeholders, and the day-to-day project team

3. Create an implementation plan: Outline major milestones, dependencies, and

the timeline for the entire team and stakeholders

4. List potential problem areas: This isn’t about being a downer, and more instead
about being realistic. Adding potential risks and issues to the project charter helps
everyone think ahead and even prevents potential roadblocks.

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 Who Prepares and authorizes the Project charter?

Who Writes the Project Charter:

● In most cases, the project charter is written by the project manager. However,
there is one more key player in preparing this document- the sponsor.
● The sponsor is the main initiator and supporter of the project. This is usually a
high role executive that sees real value and purpose for the project to go through.
Due to their lack of time, the sponsor usually picks a project manager for the
project and asks them to prepare the project charter.
● Both the project manager and the sponsor collaborate on the document. The
sponsor has to relay all the key information about the importance of the project
and the project manager is responsible for preparing the final draft. The final
approval belongs to the sponsor.
● Also, if at any time, even after the project charter is completed, the sponsor feels
like the project manager is not right for the job, they have full authority to choose
a different person.
● In some cases, the sponsor can be more than one person or even a whole team.
In such situations, it is usually this group that prepares the project charter
themselves.

5
Explain Probability and impact matrix. What are the risk response
strategies for negative risks(threats) and positive risks(opportunities)?
Explain Probability and impact matrix.
Risks can be prioritized for further quantitative analysis and planning risk responses
based on their risk rating. Ratings are assigned to risks based on their assessed
probability and impact. Evaluation of each risk’s importance and priority for attention is
typically conducted using a look-up table or a probability and impact matrix. Such a
matrix specifies combinations of probability and impact that lead to rating the risks as
low, moderate, or high priority. Descriptive terms or numeric values can be used
depending on organizational preference. Each risk is rated on its probability of occurrence
and impact on an objective if it does occur. The organization should determine which
combinations of probability and impact result in a classification of high risk, moderate
risk, and low risk. In a black-and-white matrix, these conditions are denoted using
different shades of gray. Specifically in Figure 11-10, the dark gray area (with the largest
numbers) represents high risk: the medium gray area (with the smallest numbers)
represents low risk, and the light gray area (with in-between numbers) represents
moderate risk. Usually, these risk-rating rules are specified by the organization in advance
of the project and included in organizational process assets. Risk rating rules can be
tailored in the Plan Risk Management process to the specific project.

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Strategies for Negative Risks or Threats
Three strategies, which typically deal with threats or risks that may have negative impacts on
project objectives if they occur, are: avoid, transfer, and mitigate. The fourth strategy, accept, can
be used for negative risks or threats as well as positive risks or opportunities.. The four strategies
for dealing with negative risks or threats are further described as follows:

1. Avoid

As per the PMBOK® Guide

Risk avoidance is a risk response strategy whereby the project team acts to overcome
the threat or protect the project from its impact.

● It generally calls for altering the project management plan, like you make
changes in scope or design or even in the implementation plan
● Risks identified at an early stage can be avoided by improving communication
or acquiring skills.
● Eliminates the probability of risk events and thus removes risk from the risk
register.
● The idea is to try to avoid as many critical risks as possible.
2. Mitigate

As per the PMBOK® Guide

Risk mitigation is a risk response strategy whereby the project team acts to reduce the
probability of occurrence or impact of a risk. –

● Reduces the probability and/or impact of a threat to bring it within the

acceptable threshold limits.
● A hands-on approach to lower the criticality of risk.
● Project team implements mitigate strategy to critical risks.
● It does not remove risk from the risk register, instead brings down the
criticality level of the given risk.

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 3. Transfer

As per the PMBOK® Guide

Risk transference is a risk response strategy whereby the project team shifts the impact
of

A threat to a third party, together with ownership of the response.

● The responsibility of the risk gets transferred to another party. This however
does not eliminate the risk.
● Risk transfer requires paying a risk premium as another party is managing the
risk.
● Involves tools like insurance, performance bonds, warranties, guarantees, etc.
● Used normally in case of less critical risks.
4. Accept

As per the PMBOK® Guide

Risk acceptance is a risk response strategy whereby the project team decides to
acknowledge the risk and not take any action unless the risk occurs.Here, it is very
important to understand that risk acceptance can be either active or passive.

In Passive acceptance project team decide to take care of risks as they occur. On the
other hand, the active acceptance asks the team to establish the contingency reserve,
including amounts of time, money, or resources to handle the risks as it occur.

Positive Risk Response Strategies

1. Escalate

You use this strategy when you cannot realize an opportunity because you lack the
authority to make it happen.
You approach top management and ask them to manage the risk. Once they review and
accept the responsibility, you are no longer accountable for it; however, you will record it
in your risk register for further monitoring.
2. Enhance

In the enhance risk response strategy, you try to increase the chance of a risk happening
so you can realize it. In this case, you try to seize the opportunity. The enhance risk
response is the opposite of the mitigate strategy.
3. Exploit

In the exploit risk response strategy, you ensure that the opportunity is realized. You do
not try, you make certain to seize it

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 4. Accept

In the accept risk response strategy, you take no action to realize the opportunity. You
leave it as is, and if it happens, you will benefit from it.
You use this strategy when the cost of the response is high, there is a low chance of it
occurring, or the benefit does not outweigh the effort.
5. Share

You use the share risk response strategy when you cannot realize the opportunity on your
own. So, you team up with another company and work together.

6
7
8 Consider a project comprising of 9 activities with following precedence relationships and
durations.

Activity A B C D E F G H I J K L
Immediate - - A A A D C D E, F B, I G, J, K
predecessor H
Duration in 4 8 2 4 9 1 7 3 2 2 5 4
weeks
Draw the network and find the critical path. (05)
List the total float, free float and independent float for all the activities. (05)

9
What is a contract? What does it include? What are centralized and
decentralized contracts? Explain their advantages and disadvantages.

what is a contract.
We all sign contract, even your employment agreement with your Employer is also a kind
of contract, which mentions how long you need to work and how much you will get paid
for that work, how many paid holidays you will have etc.
A contract is a mutually agreed legal agreement that mandates the seller to provide its
goods or services to buyer for a pre-agreed compensation. The compensation can be
monetary or in some other form.

It's important to note that a contract must be written and it must have legal remedies. So
if either party fails to honor their commitment, the other party can go to the court and
appeal against the misdeeds.

Larger Organizations have full time managers called Contract Managers or Procurement
Managers. They take care of creating and managing contracts.

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There are two way of contract such as Centralized and Decentralized. If all the contracts
of the organizations managed by creating a central contracting or purchasing
department, in that case it's called "centralized contracting" and if there can be a
separate contract managers assigned to each of the projects, in that case it's called
"decentralized contracting".

Centralized Contracting

When contracting is centralized, a single organizational entity is responsible for the entire
contracting process. The Office Chief or manager is accountable to senior management
for all contracting activities. Contracting processes are typically standardized and uniform
across all projects.

Benefits

● Economies of scale, increasing efficiency and effectiveness.

● A single department is responsible, thus increasing management control.
● Reduces duplication of effort, yielding reduced costs, especially in receiving and
inspection costs.
● Centralized contract staff are specialized and can take advantage of market
conditions.
● Contract Manager (CM) is better able to deal with consultants because
consultants have fewer people to call on.

Disadvantage

● Potential bottlenecks when requisitions are received sporadically, especially at the

end of the fiscal year.
● Does not consider the special needs of the Project Manager (PM).

Decentralized Contracting

In decentralized contracting, CMs maintain control over the contracting process for each
project. A staff member from a central procurement office may be assigned to work with
the CM.

Benefits

● Project manager maintains control of the contract award.

● Contracting effort is tailored to a single project. Contracting person has fewer
other responsibilities and is under the PM's direct control.
● Contracting staff is located nearby, minimizing communication problems.

Disadvantage

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 ● Duplication of effort in contracting, receiving, inspection, and accounts payable
drive total costs higher.
● Lack of standardized procedures makes the consultant's job more complex.

10
List and briefly describe the ways projects may be terminated. What are
some non technical reasons for project termination?

Here are just some of the possible reasons why project termination may become
necessary:
● Technical reasons
● The requirements of the project change fundamentally
● The requirements of the project result are unclear or are unrealistic
● A common reason for many project’s needing to be terminated is the lack of
project planning
● The intended outcome of the project is no longer needed so the project becomes
obsolete
● The project cost becomes too high or the projected revenue is too low
● Requires material, tools, or human resources for the project are unavailable
● External factors such as a natural disaster including earthquake or flooding etc.
● Lack of management support
● Lack of customer support

There are four fundamentally different ways to close out a project: extinction,
addition, integration, and starvation.
1. Termination by Extinction
Project termination by extinction is when a project is stopped due to either its successful
or unsuccessful conclusion.
Project termination by extinction could happen in the following cases:
● The project has met its scope and the client or end-user has accepted the project
outcome
● The project has been superseded by external developments like a market crisis,
technological advancements, etc
● The project has failed to achieve its goal

2. Project Termination by Addition

The majority of projects that are undertaken are done so ‘in-house’, which means that
they are worked on by the project team for the project outcome to be used by the parent
organization.
In project termination by addition, if a project is a success, the project may be terminated
by institutionalizing it as a formal part of that parent organization.

3. Project Termination by Integration

In the case of project termination by integration, the project that is being aborted is
either integrated into other larger projects that are underway or becomes part of the
ongoing operation of the organization.

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 Project resources in this case are redistributed and the project as a whole loses both its
purpose and identity as an individual project.

4. Project Termination by Starvation

Project termination by starvation can occur for several reasons. These reasons could
include things such as politics, placated sponsors, or even just general budget cuts.
Many argue that project termination by starvation is not an act of termination at all.
Many believe that termination by starvation is in reality a willful form of neglect.
Termination by starvation, therefore, is the act of depriving a project of necessary
resources it needs to sustain its ongoing activities. This leads to the inevitable cease of
function.

WHEN TO TERMINATE A PROJECT

• Is the project still consistent with organizational goals?
• Is it practical? Useful?
• Is management suffi ciently enthusiastic about the project to support its
implementation?
• Is the scope of the project consistent with the organization’s fi nancial strength?
Is organizational project support being spread too thin?
• Is support of this individual project suffi cient for success?
• Does this project represent too great an advance over current technology? Too small an
advance?
• Is the project team still innovative, or has it gone stale?
• Can the new knowledge be protected by patent, copyright, or trade secret?
• Could the project be farmed out without loss of quality?
• Is the current project team properly qualifi ed to continue the project?
• Does the organization have the required skills to achieve full implementation or
exploitation of the project?

11
Compare the top down budgeting and bottoms up budgeting.

Top Down Budget Bottom Up Budget

In a top-down planning, departments In a bottom-up budget, departments

must generate budgets within the create their own budget estimates and
constraints set forth by senior leadership. send them to senior leadership.

a top-down budget/top down planning takes more time

takes less time

Starts from highest level of organization Starts from lowest level of the
and works downwards organization and works upward

Budget is decided by the top of the A budget is decided by the lower level in
organization and imposes budget on the the organization and then given to the
lower layer of the organization higher level for the approval

decreased motivation due to lack of increased motivation due to ownership of

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 ownership of budget budget

departments may not be able to a bottom-up budget empowers employees

successfully operate within the constraints to take ownership of the planning process
outlined by senior leadership. and utilizes their expertise in the
departments they operate,

one budget is created one time rather Each department makes its own budget
then having combined budgets from without regard to other departments
several departments

Because budget estimates are developed Not much accurate

at the bottom, they are typically far more
accurate.

saves time and resource takes more time and resource

Takes the burden off of lower here the lower management has the
management to create a budget on their responsibility to create budget
own

12
What are the functions of risk register?

A risk register is a document that is used as a risk management tool to identify potential
setbacks within a project. This process aims to collectively identify, analyze, and solve
risks before they become problems.A risk register document, otherwise known as a risk
register log, tracks potential risks specifically within a project. It also includes information
about the priority of the risk and the likelihood of it happening.
• List of identified risks. The identified risks are described in as much detail as is
reasonable. A structure for describing risks using risk statements may be applied, for
example, EVENT may occur causing IMPACT, or If CAUSE exists, EVENT may occur leading
to EFFECT. In addition to the list of identified risks, the root causes of those risks may
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become more evident. These are the fundamental conditions or events that may give rise
to one or more identified risks. They should be recorded and used to support future risk
identification for this and other projects.
• List of potential responses. Potential responses to a risk may sometimes be identified
during the Identify Risks process. These responses, if identified in this process, should be
used as inputs to the Plan Risk Responses process

What are the Components of a Risk Register?

There is no standard list of components that should be included in the risk register. The
PMBOK Guide, and PRINCE2, and other organizations make recommendations for risk
register contents; however, these are not the only recommendations that may be used.

What are the function of a Risk Register?

1. Perform Qualitative Risk Analysis

In the Perform Qualitative Analysis process, details are added to the existing list of risks in
the risk register including the priority of risks, the urgency of the risks, the categorization
of risks, and any trends that were noticed while performing this process. Risks that have
been managed, avoided, or are no longer relevant can be removed from the risk register.

2. Perform Quantitative Risk Analysis

In the Perform Quantitative Risk Analysis process, the risk register is updated with the
probabilities associated with each identified risk and the probability of meeting the cost
and time projections.

3. Plan Risk Response

In the Plan Risk Response process, a specific response plan is created to manage each
risk.While managing risks, remember that not all risks are negative-positive risks are
opportunities. Accordingly, a project manager should devise strategies for managing
negative risks or threats as well as positive risks or opportunities.

4. Monitor and Control Risk

In the Monitor and Control risks process, plans are re-assessed and re-evaluated. The risk
register is updated with information on new risks as an output of this process. This
information should be regularly updated in the risk register,

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13
Differentiate between projects and operations.

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 ans from here:
https://www.geeksforgeeks.org/difference-between-projects-and-operations/#:~:text=Definition-,A
%20project%20is%20an%20endeavor%20that%20is%20temporary%20in%20nature,result%20or
%20a%20repetitive%20service.

14 Describe different types of project terminations. done

15
What is critical path method?

CPM or the Critical Path Method is an algorithm used in project management that is used
to schedule project activities. The critical path refers to the longest stretch of the
activities, and a measure of them from start to finish.

With the help of CPM, we’ll be able to create a model that enables you to determine the
following:

● Tasks required to complete the project

● Dependencies between tasks
● The duration required to complete an activity

Steps for CPM

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example from here
https://www.simplilearn.com/tutorials/project-management-tutorial/critical-path-method

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16
Explain the concept of triple constraints.

The triple constraint theory says that every project will include three constraints:
budget/cost, time, and scope. And these constraints are tied to each other.

Any change made to one of the triple constraints will have an effect on the other two. For
example, If you move your project’s due date out by a week or two, your budget and
scope constraints could be impacted in any number of ways, including:

What is the project management triangle?

The project management triangle is a model used to visualize the triple constraint theory.
Let’s take a look at each point on the triangle.

Scope: This is a definition of the work that needs to be done. It documents the features
and functions that will be included in this iteration of the product. The scope
documentation should make it clear to everybody what will or won’t be included in the
final product. You might consider using a work breakdown structure (WBS) chart to break
down the scope into actionable tasks.

Time: Determine how much time it will take to complete the tasks in the scope and set a
timeline for each task in each iteration. Based on the timelines, set a deadline for the
final release of the product. Make sure that the timelines are realistic,

Budget/Cost: Review previous, similar projects to help you estimate how much your
budget will cost. Look at the following costs to help you determine the overall budget:

● Resources: How much will it cost to pay people working on the project? Base
the costs on the estimated hours it takes to complete the tasks.
● Materials: If you are in manufacturing, you have to consider the costs of raw
materials and the supply chain.
● Equipment: Will this project require new hardware or software? Consider the
costs of upgrading vs. working with existing equipment.

Why is the triple constraint theory important for project success?

The triple constraint theory helps you to recognize competing demands in every project.
For every project, you need to decide which demand is the most important. Knowing
which one is the most important makes it easier for you to make adjustments to the
other two to balance the project and keep it on track.

How does the triple constraint work?

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 Following are a few steps that can help you to successfully make the triple constraint
theory work for you.

Step 1: Work with the client

Whether internal or external, you need to know what your client wants and expects from
the project. Find out if they have a budget, scope, and timeline in mind.

Step 2: Clearly communicate the project scope

For your project to be successful, everybody involved needs to know what the scope is
and what their roles and responsibilities are.

Step 3: Set deadlines

It’s important to keep the project on track and on time.

Step 4: Allocate resources

You need to allocate resources efficiently. Assign the people with the right skillset to the
right tasks.

Step 5: Monitor the project and make tradeoffs and adjustments as needed

It’s important to have a well-defined plan for any project. But if you don’t monitor the
progress, the plan doesn’t do you much good.

17
Explain the role of project sponsor.

The project sponsor is a person or group who owns the project and provides
resources and support for the project, program or portfolio in order to enable its success.

Every project has at least one project sponsor. They are the reason for the project. While
they don’t manage the day-to-day operations of a project, they are above the project
manager in terms of project hierarchy. Most likely, the project sponsor has been involved
with the project from the very beginning. They were the one who helped conceive it and
advocated for it.

The project sponsor can vary according to the project. For example, a government project
is going to have a state official as project sponsor who will work with the construction
company’s project manager. However, in an IT project, the project sponsor might be the
chief information officer.

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Project Sponsor Responsibilities
The project sponsor is responsible for many aspects of the project, from initiating and
ensuring the success to approving and establishing parts of the project. The role can be
broken into three parts: vision, governance and value or benefits realization.

Vision

● Makes sure the business case is valid and in step with the business
proposition
● Aligns project with business strategy, goals and objectives
● Stays informed of project events to keep project viable
● Defines the criteria for project success and how it fits with the overall
business
Governance

● Ensures project is properly launched and initiated

● Maintains organizational priorities throughout project
● Offers support for project organization
● Defines project roles and reporting structure
● Acts as an escalation point for issues when something is beyond the project
manager’s control
● Gets financial resources
● Decision-maker for progress and phases of project
Values & Benefits

● Makes sure that risks and changes are managed

● Helps to ensure control and review processes
● Oversees delivery of project value
● Evaluates status and progress
● Approves deliverables
● Helps with decision-making
● Responsible for project quality throughout project phases.

What a Project Sponsor Does In Each Phase

Initiation Duties

during the project initiation, the project sponsor makes sure the project is appropriate
for the organization, offering input on the project charter and participating in the kick-off
meeting. The sponsor helps with the decision-making during this phase.

Planning Duties

For the planning phase, the project sponsor is checking to make sure the project plan is
realistic and feasible. This accounts for time restrictions and whether or not the team is
tasked with expectations they cannot meet.

Implementation Duties

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 For the implementation and control phases, the project sponsor should work with the
project manager, but not overstep boundaries. The project sponsor evaluates the
project’s actual progress against what was planned and provides feedback to the project
manager as necessary.

Closing Duties

During the closing phase, the project sponsor is part of the post-mortem evaluation on
performance and other aspects of the project. They make sure that handoffs and signoffs
are done properly

18
Describe the use of Gantt chart with the help of example.

● A Gantt chart is a visualization that helps in scheduling, managing, and monitoring

specific tasks and resources in a project.
● It consists of a list of tasks and bars depicting each task's progress.
● It's the most widely used chart in project management.
● Gantt charts are used in heavy industries for projects like building dams, bridges,
and highways, as well as software development and building out of other goods
and services.

Benefits of a Gantt Chart

The chart identifies tasks that may be executed in parallel and those that can't be started
or finished until others are complete. It can help detect potential bottlenecks and identify
tasks that may have been excluded from the project timeline.

The chart depicts things like: task slack time or additional time for completion of a task
that shouldn't delay the project; noncritical activities that may be delayed; and critical
activities that must be executed on time.

Gantt charts can be used in managing projects of all sizes and types. These may include
building infrastructure like dams, bridges, and highways. They may also include software
development and other technologies. Project management tools, such as Microsoft Visio,
Project, SharePoint, and Excel, or specialized software, such as Gantto or Matchware, can
help in designing Gantt charts.

What are the components of a Gantt Chart?

A Gantt chart can vary in complexity and depth, but will always have three key
components: activities or tasks that are to be done, running along the y-axis; milestones
or progress stages indicated along the x-axis (either on the top or bottom of the chart);

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and progress bars, denoted as horizontal bars, denoting how far along each task is at any
given point.

Example of a Gantt Chart

Here is the best example of Gantt Chart. This example Graph helps the manger to
understand how much work is completed. And number of tasks in Progress. We can also
see the %Progress of each Task.

You can clearly understand the Progress of Project by Phase. This Also helps to
understand % of work completed, start date and due dates.

Also, we can add additional information like Cost to complete each phase or milestone,
etc…

Gantt chart Advantages:

Here are the key advantages of Gantt Chart. We can easily track the project schedules
with the help of Gantt Type Chart:

● Helps to schedule the tasks with start date and end date
● Split the activities by Status of the Task
● We can understand the % of Task Completion
● Helps to figure out number of Tasks in Progress
● Also helps to understand % of work or tasks remaining
● Effectively represents the task by Splitting with different Colors

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19
Explain various types of non-numeric models.

Types Of Project Selection Models

Following are the types of Project Selection Models:

Non-Numeric Project Selection Models

Non – Numeric project selection models have further 6 types, which we need to discuss
in detail.

● The Sacred Cow

● The Operating Necessity
● The Competitive Necessity
● The Product Line Extension
● Comparative Benefit Model
● Q-Sort Model

1. The Sacred Cow

● In this case the project is suggested by a senior and powerful official in the
organization. Often the project is initiated with a simple comment such as, “If you
have a chance, why don’t you look into…,”
● The project is created as an immediate result of this bland approach for
investigating whatever the boss has proposed. The sacredness of the project
reflects the fact that it will be continued until ended or until the boss himself
announces the failure of the idea & ends it.
2. The Operating Necessity
Certain questions come in front of the project is needed in order to keep the system
functioning like is the estimated cost of the project is effective for the system? If the
answer to such an important question is yes, then the project costs should be analyzed to
ensure that these are maintained as the minimum and compatible with the success of
the project. However, the project should be financed.
3. The Competitive Necessity
● In the late 1960s, XYZ Steel considered an important plant rebuilding project by
using this criterion in its steel bar producing facilities near Chicago. It was clear to
the management of the company that certain modernization is required in its bar
mill in order to keep the current competitive position in the market area of
Chicago.
● Perhaps the project has a modern planning process, the desire to keep the
competitive position of the company in the market provide a basis for making
such a decision to carry on the project. Similarly, certain undergraduate and
Master in Business Administration (MBA) programs are restructured in the
offerings of many universities to keep their competitive position in the academic
market.
4. The Product Line Extension
In case of the product line extension, a project considered for development & distribution
of new products will be evaluated on the basis of the extent to which it suits the

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company’s current product lines, fortify a weak line, fills a gap, or enhanced the line in a
new & desirable direction
5. Comparative Benefit Model
According to this selection model, there are several projects that are being considered by
the organization. That subset of the projects that are selected by the senior management
of the organization can provide the most benefits to the company. But comparing various
projects is not an easy task.
6. Q-Sort Model
The Q-Sort model is one of the most straightforward techniques for ordering projects.
According to their relative merits, the projects are first divided into three groups which
are Good, Fair and Poor. The main group is further subdivided into the two types of
fair-minus and fair-plus if any group has more than eight members.

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20
Write short note on
a) Project Auditing.
The project audit is a thorough examination of the management of a project, its
methodology and procedures, its records, its properties, its budgets and expenditures,
and its degree of completion. It may deal with the project as a whole, or only with a part
of the project

1. Current status of the project. Does the work actually completed match the planned
level of completion?
2. Future status. Are significant schedule/cost/scope changes likely? If so, indicate the
nature of the changes.
3. Status of crucial tasks. What progress has been made on tasks that could decide the
success or failure of the project?
4. Risk assessment. What is the potential for project failure or monetary loss?
5. Information pertinent to other projects. What lessons learned from the project being
audited can be applied to other projects being undertaken by the organization?
6. Limitations of the audit. What assumptions or limitations affect the data in the audit?

Depth of the Audit

● There are several practical constraints that may limit the depth of the project
auditor’s investigation.
● Time and money are two of the most common (and obvious) limits on the depth
of investigation and level of detail presented in the audit report.
● While an audit can be performed at any level the organization wishes, three
distinct levels are easily recognized and widely used: the general audit, the
detailed audit, and the technical audit.
● The general audit is normally most constrained by time and resources and is
usually a brief review of the project, touching lightly on the six concerns noted
earlier.
● A typical detailed audit is conducted when a follow-up to the general audit is
Required.
● Technical audits are normally carried out by a qualified technician under the direct
guidance of the project auditor.

Timing of the Audit

Given that all projects of significant size or importance should be audited, the first audits
are
usually done early in the project’s life. The sooner a problem is discovered, the easier it is
to
deal with.

Format and Use of the Audit Report

The type of project being audited and the uses for which the audit is intended dictate
some
specifics of the audit report format. Within any particular organization, however, it is
useful to

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 establish a general format to which all audit reports must conform. This makes it possible
for
project managers, auditors, and organizational management all to have the same
understanding
of, and expectations for, the audit report as a communication device.

Responsibilities of the Project Auditor/Evaluator

• Assemble a small team of experienced experts
• Familiarize the team with the requirements of the project
• Audit the project on site
• After completion, debrief the project’s management
• Produce a written report according to a pre specified format
• Distribute the report to the PM and project team for their response
• Follow up to see if the recommendations have been implemented

b) Phases of project life cycle.

phases are given here add some extra point in own words

21
Explain Goldratt’s Critical Chain Method.

● This is a method of adjusting schedules to reduce the probability of projects being

late.

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 ● Traditionally, project schedules have four dates associated with each activity: early
start, early finish, late start, and late finish. Most project managers use the early
schedule dates to schedule their projects.
● This means that if all the activity work takes place in the early start and early
finish dates, that work is done as soon as possible.
● It also means that if anything goes wrong, there will be the maximum amount of
time available to do the work needed to recover from the problem.
● To use Goldratt's terminology, a project schedule has critical and noncritical chains
of activities. The critical chain of activities is the traditional critical path but
includes the effect of resources on the schedule.
● The critical chain is the list of activities that have no float after any resource
conflicts have been resolved.
● All the activities in the project that are not on the critical chain are, by definition,
noncritical activities and have some float associated with them. In real projects
these activities tend to group themselves together to form subprojects within the
project. These are what Goldratt calls ''feeder chains.''
● The characteristic is that the feeder chains are relatively independent of the
critical chain until an activity on the critical chain depends on them. In Figure
5-27, feeder chain A, B, C, D has quite a lot of independence until the time activity
P on the critical chain depends on it. The same is true of other feeder chains.
● If the feeder chains are scheduled to their early schedule dates, early starts, and
early finishes, there is a disadvantage. The disadvantage is that if changes in
requirements, risks, or other problems occur in the project, much of the work in
the feeder chains will already be done and will have to be ripped out. This
problem can be at least partially avoided by scheduling the feeder chains more
toward their late schedule

Figure 5-27: Feeder chains and critical chains dates, this essentially puts all the feeder
chain activities onto the critical path

● To set our schedule correctly, taking all of these factors into consideration, we
need to do the following:
● Calculate the critical chain of the project after resolving resource conflicts and all
of the resource and other schedule constraints.
● Buffer the critical path by calculating a two standard deviation buffer and applying
it by starting the project earlier than the early start date or promising the

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 stakeholders a project completion date later than the early finish date of the
project.
● Group the feeder chain activities into feeder chains.
● Calculate the two standard deviation buffers for the feeder chain and schedule
the activities in the feeder chain according to their late schedule dates minus their
buffer.
● By scheduling this way, the feeder chains have a 95 percent probability of being
completed within their buffered schedule and not affecting the critical chain
activities

22
Write a role on project procurement management; explain the purpose
and steps involved for the same.

https://www.indeed.com/career-advice/career-development/project-procurement-management

What is project procurement management?

Project procurement management is the creation and maintenance of relationships with

external resources needed to complete a project. A project procurement manager
communicates with vendors to buy, rent or contract products and services needed to
achieve project objectives.

Purpose

Projects in a variety of industries require external materials and resources to successfully

achieve their objectives. Project procurement management is the selection, coordination
and maintenance of these goods and services and is an important part of successful
project completion. Understanding the processes, benefits and uses of project
procurement management can help you more effectively achieve your project goals

Who uses project procurement management?

The following industries commonly use project procurement management to meet their
project objectives:

● Construction
● Manufacturing
● Engineering
● Technology
● Finance
● Healthcare

Processes in project procurement management(steps)

There are four key processes involved in product procurement management:

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 1. Planning procurement

Planning procurement involves a series of steps that help determine which resources an
organization needs for project completion and the extent of its budget.

● The materials and resources required to complete the project

● The materials and resources they already have and which need to be outsourced
● Contract requirements for outside purchases
● Delivery date requirements
● Key project milestones and their deadlines
● Legal terms and conditions

2. Conducting procurement

After planning for procurement, project procurement managers assess bids from vendors
and select partnerships based on their project needs. Any vendor negotiations often take
place during this phase of procurement and all involved parties sign the agreed-upon
contracts.

3. Controlling procurement

Once contracts become active, procurement control and management are important
parts of maintaining partnerships with vendors and ensuring the services and products
function as they're intended throughout the course of the project. Controlling
procurement often includes:

● Evaluating regular internal status updates

● Reviewing contractor agreements
● Reviewing progress and performance updates from vendors

4. Closing procurement

Closing procurement involves all necessary steps in ending a partnership or contract. This
often involves a review of the work or services completed, renegotiation of any changes
to original contract terms and confirmation of payments issued and received.

Project manager responsibilities during procurement

1. Project initiation
2. Procurement planning
3. Stakeholder coordination
4. Vendor coordination
5. Communication of progress

23
Define Probability and Impact Matrix. Explain briefly.

Impact and probability are the two main components of Risk analysis. Looking at impact
versus probability is common in order to categorize and prioritize risks as some risks may

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have a severe impact on projects objectives but only happen on rare occasions, while
other have a moderate impact but occur more frequently.
All organizations activities involve risk. Risks are events caused by uncertainties, which
can have a positive or negative effect on the project objectives. All projects are unique
and thus the associated risk varies between projects. Therefore, Risk Management is an
important part of any organization as proper management increases the likelihood for the
success of a project [1]. Risk management involves identifying possible risks and analyzing
their potential in order to respond to and control the projects most significant threats
and opportunities
In risk analysis, risk is traditionally defined as a function of probability and impact [3]. The
probability is the likelihood of an event occurring and the consequences, to which extent
the project is affected by an event, are the impacts of risk. By combining the probability
and impact, the Level of Risk can be determined. There are various aspects of the project
that can be affected by a risk event, such as cost, safety, operation, quality, etc [3]. A
commonly used method for risk assessment is preparing descriptive scales to rank risk in
terms of probability and impact.

Impact:
Impacts are often defined as the consequences, or effects of a risk event on the project
objectives. These impacts can be both beneficial or harmful to the objectives [3]. The
impact of risk events on different project objectives can be defined in both a qualitative
and quantitative manner. These project objectives are cost, schedule, quality, scope,
health, safety, etc.
The Impact scale can vary, but the most common scale is the five-point scale. Typically,
the impacts are described relatively; as very low, low, moderate, high and very high, but
often also defined using numerical scales. Dependent on the objective, the scales are
given a description of what the impact entails
Table 1 shows how the impact can be defined for various objectives. The possible impacts
on each objective is described and given a ranking. The ranking in table 1 is both relative,
from very low to very high, and numerical, giving numerical values based on the specific
project.

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Probability:
Risk probability, or likelihood, is the possibility of a risk event occurring. The likelihood
can be expressed in both a qualitative and quantitative manner. When discussing
probability in a qualitative manner, terms such as frequent, possible, rare etc. are used. It
is also possible to describe the probability in a numerical manner. This can be done using
scores, percentages and frequencies defined by the organizations dependent on the
relative description [3]. Table 2 show an example on how an organization can define the
ranking for the likelihood of risks. The table shows the ranking in both a relative and
numerical manner and a description of the ranking is given.

Probability and Impact Matrix

The Probability and Impact Matrix is one the most commonly used qualitative
assessment method. It is based on the two components of risk, probability of occurrence
and the impact on objective(s) if it occurs. The matrix is a two-dimensional grid that maps
the likelihood of the risks occurrence and their effect on the project objectives [5]. The risk
score, often referred to as risk level or the degree of risk, is calculated by multiplying the
two axes of the matrix.
Risk = Impact x Probability
As the impact and probability can be described in both a relative and numerical manner
so can the risk score. The higher the combined ratings are, the higher the score and thus
the risk level. These ratings are generally defined from low to high or from very low to
very high [3]. The ratings for likelihood and impact are made using gathered opinions from
interviews [2]. These ratings must be classified by each organization, specific for each
activity. The organizations must define their risk tolerance. Creating these definitions of
impact and probability levels can help reducing the influence of bias [5]. The result from
these risk matrices are used to prioritize the risks, plan the risk response, identify risks for
quantitative assessment and guide resource allocations [6]. However, the objective
effected by the risk must also be considered. E.g., a risk events which has high safety or
health risk would be prioritized over a risk event which would have very high financial risk
[3]
.

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Low impact – Low probability: The risks that are characterized as low, or very low, risks
have both a low impact and likelihood of occurrence. For negative risks, threats, the
response required is not necessarily as proactive management action. However, they
should be included within the risk register for future monitoring. Positive risks,
opportunities, within the low-risk category should be monitored or just simply accepted.
High impact – Low probability: Risks with high impact but low likelihood of occurrence
can be characterized from low to high risks but most often within the moderate category.
The characterization is dependent on the organizations defined threshold. These events
rarely occur, defined as rare catastrophes. It is difficult to determine the probability based
on historical records due to lack of data. Therefore, the probabilities must be estimated
subjectively.
Low impact – High probability: Risks with low impact but high likelihood of occurrence
can be characterized from low to high risks but most often within the moderate category.
The characterization is dependent on the organizations defined threshold. These risks are
mostly due to uncertainties of numerous elements that individually, are minor risks but
combined, could amount to higher risks.
High impact – High probability: The risks that are characterized as high risks have both a
high impact and likelihood of occurrence. A risk which has a negative impact, is a threat
to the objective, may need priority actions and aggressive responses. These aggressive
responses could be mitigation of the risk or even terminating the project if the risk is to
great. A risk that has a positive impact, is an opportunity, is most likely obtained easily,
with the greatest benefits and should thus be targeted first [5].

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