PMP Exam Preparation

Points to Remember-2
9 ProjectSelectionMethods:
1BenefitMeasurementMethods:a.EconomicModels,b.ScoringModels,c.ComparativeApproach,d.
BenefitContribution,ande.MurderBoard
2ConstrainedOptimizationMethods:a.Linear,b.NonLinear,c.Dynamic,d.Integer,ande.Multi
objectivealgorithms
9 EconomicValueAdd(EVA):Ifaprojectdoesnotmakemoremoneythantheopportunitycosts,ithasnottruly
addedeconomicvaluetotheorganization.
9 InternalRateofReturn(IRR):Biggerisbetter.
9 OpportunityCost:'whatisthecostoftheotheropportunitieswemissedbyinvestingourmoneyinthis
project?
9 PaybackPeriod:ashorterpaybackperiodisbetter.
9 ReturnonInvestment(ROI):Biggerisbetter.
9 CorrectiveandPreventiveActionsdonotnormallyaffecttheProjectBaselines,onlytheperformanceagainst
thebaselines.
9 MidProjectEvaluationsareconductedwhileprojectworkisstillinprogress.Themainpurposeofsuch
evaluationsistodetermineifobjectivesarestillrelevantandiftheseobjectivesarebeingmet.
9 PerformIntegratedChangeControlisprimarilyfocusedonMANAGINGCHANGEstotheproject'sSCOPE.
9 MonitorandControlProjectWorkisprimarilyfocusedonMANAGINGTHEWAYthatSCOPEisexecuted.
9 CCBisresponsibleforreviewingchanges&changerequestsanditslevelofauthorityshouldbespelledoutin
theProjectManagementPlan.
9 Changecontrolisfocusedonidentifying,documentingandcontrollingchangestotheprojectandtheproduct
baselines.
9 VerifyScopehappensattheendofeachphase/project,andupondeliveryofProduct/Service/Result.
1|P a g e


9 VerifyScopeisconcernedwithcompletenessandacceptance.
9 PerformQualityControlisconcernedwithcorrectness.
9 Customer'sinterestsshouldalwaysbeweighedheavilyanddisputesshouldberesolvedinfavorofthe
customer.
9 ABaseline(whetherforScope,Schedule,Cost,orQuality)istheOriginalPlan+AllApprovedChanges.
9 ScopeCreepResultsfrom:
o

Poorinitialrequirementsdefinition.

Failuretoinvolveusersinearlystages.

AmissingScopeBaseline.

PoorChangeControl.

WeakManagement.

Failuretomanageuserexpectations.

9 MandatoryPredecessorsareknownas(Hardlogic),DiscretionaryPredecessorsareknownas(Preferredlogic,
orSoftlogic).
9 ResourceCalendarsspecifyWHENandHOWLONGidentifiedprojectresourcewillbeavailableduringthe
project.
9 ScheduleCompressionincludesFasttrackingandcrashing.
9 Crashingusuallyincreasescost.OverTimeisconsideredasCrashing.CheapestTaskhastobecrashedfirst.
9 Heuristics:Rulesforwhichnoformulaexists.Usuallyderivedthroughtrialanderror.
9 FreeFloat:howmuchtimeanactivitycanbedelayedwithoutaffectingtheearlystartdateofsubsequent
dependentactivities.
9 ResourceLevelingcanbeusedwhensharedorcriticalrequiredresourcesareonlyavailableatcertaintimes,or
availableinlimitedquantities,ortokeepresourceusageataconstantlevel.Itcanoftencausetheoriginal
criticalpathtochange.

2|P a g e


9 PathConvergence:Themergingorjoiningparallelschedulenetworkpathsintothesamenodeinaproject
schedulenetworkdiagram.
9 PathDivergenceisextendingorgeneratingparallelschedulenetworkpathsfromthesamenodeinaproject
schedulenetworkdiagram.
9 CostofqualityistheCostthatisincurredtoachieverequiredquality.
9 Stranded/SunkCostsareuncuredcoststhatcannotbereversedirrespectivetofutureevents.
9 LifeCycleCostingincludesAcquisition,Operation,Maintenance,andDisposalCosts.
9 Benchmarkingmeansusingtheresultsofqualityplanningonotherprojectstosetgoalsforyourown.
9 Designofexperimentsisthelistofallthekindsoftestsyouaregoingtorunonyourproduct.
9 AttributeSamplingisbinary,iteitherconformstoqualityoritdoesnt(YESorNO).
9 VariableSamplingmeasureshowwellsomethingconformstoquality(RANGES).
9 SpecialCausesconsideredunusualandpreventablebyprocessimprovement.
9 CommonCausesaregenerallyacceptable.
9 Tolerancesdealwiththelimitsyourprojecthassetforproductacceptance.
9 ControlLimitsaresetatthreestandarddeviationsaboveandbelowthemean.Aslongasyourresultsfall
within
9 CauseandEffectDiagram(Ishikawa/Fishbone):Usedtoshowhowdifferentfactorsrelatetogetherandmight
betiedtopotentialproblems.ItimproversqualitybyidentifyingqualityproblemsandtryingtoUNCOVERTHE
UNDERLYINGCAUSE.
9 FlowChartshowshowprocessesinterrelate.
9 Histogram(ColumnChart)itshowshowoftensomethingoccurs,oritsfrequency(noRanking).
9 ParetoCharts(8020rule):ThisisaHistogramshowingdefectsRANKEDfromGREATESTtoLEAST.Thisrule
statesthat80%oftheproblemscomefrom20%ofthecauses.
9 RunCharttellsaboutTRENDSintheproject.Showsthehistoryandpattern.

3|P a g e


9 ScatterDiagramisapowerfultoolforSPOTTINGTRENDSinData.ScatterDiagramsaremadeusingtwo
variables(adependentvariableandanindependentvariable).
9 StatisticalSamplingisapowerfultoolwhereaRANDOMsampleisselectedinsteadofmeasuringtheentire
population.
9 Qualityis"thedegreetowhichasetofinherentcharacteristicsfulfillrequirements."
9 TotalQualityManagement(TQM):Everyoneinthecompanyisresponsibleforqualityandisabletomakea
differenceintheultimatequalityoftheproduct.TQMshiftstheprimaryqualityfocusawayfromtheproduct
thatisproducedandlooksinsteadattheunderlyingprocessofhowitwasproduced.
9 ContinuousImprovementProcess(CIP)/KAIZEN:Aphilosophythatstressesconstantprocessimprovement,in
theformofsmallchangesinproductsorservices.
9 JustInTime(JIT)isamanufacturingmethodthatbringsinventorydowntoZero(ornearZero)levels.Itforces
afocusonquality,sincethereisnoexcessinventoryonhandtowaste.
9 StatisticalIndependence:Whentheoutcomesoftwoprocessesarenotlinkedtogetherordependentupon
eachother,theyarestatisticallyindependent.
9 Kindsofpowers:Rewardpower,Expertpower,Referentpower,Punishmentpower(Coercive),andlegitimate
power(Formalpower).RewardandExpertasthemosteffectiveformsofpowerandPunishment/Coerciveas
theleasteffective.
9 RecognitionandReward(TheoriesofMotivation):Winwinrewardsasthebestchoicesforteambuilding.
9 Maslowshierarchyofneeds:Youcantachievehigherneedsuntilyouresatisfiedwiththelowerones.
>>>>1.Physiological,2.Security,3.Acceptance.HigherNeeds4.Esteem,5.SelfActualization.
9 HerzbergsMotivationHygieneTheory:Hygienefactors(CompanyPolicy,Supervision,Goodrelationshipwith
boss,workingconditions,Paycheck,Personallife,Status,Security,andRelationshipwithcoworkers)doesnot
makesomeonesatisfied,buttheirabsencewillmakesomeoneunsatisfied.Hygienefactorsdonotmotivateby
themselves.Motivationfactors(Achievement,Recognition,Work,Responsibility,Advancement,andGrowth)
willmotivate,buttheywillnotworkwithouttheHygienefactorsinplace.

4|P a g e


9 DouglasMcGregorsTheoryXandTheoryY:TheoryXTeammembersareSelfish,Unmotivated,Dislikework
(constantsupervisionisrequired'authoritarianmanagement'style).TheoryYNaturallymotivatedtodo
goodwork(managertruststeammembers'participativemanagement'style).
9 ExpectancyTheory:Ifworkersbelievetheireffortsaregoingtobesuccessfulandrewarded,theywilltendto
behighlymotivatedandproductive.
9 GroundRules:Formalorinformalrulesthatdefinetheboundariesofbehaviorontheproject.
9 StagesofTeamDevelopment:1.Forming,2.Storming,3.Norming,4.Performing,and5.Adjourning
9 FormalVerbal(PresentationsandSpeeches)
9 InformalVerbal(Meetings,Conversations)
9 FormalWritten(ProjectPlans,Contract,Charter)
9 InformalWritten(StatusUpdates,memos,Email)
9 90%oftheProjectManager'stimeisspentcommunicating
9 SensitivityAnalysis(TornadoDiagramshowsHOWSENSITIVEeachanalyzedareaoftheprojectistorisk.It
ranksthebarsfromGREATESTtoLEASTontheprojectsothatthecharttakesonaTornadolikeshape).
9 BuyersRisk(fromHighesttoLowest)CPFFT&MCPIFFPIFFFP
9 IFBorRFB/Pusedfor1.SinglePrice,2.High$Value
9 RFQusedfor1.PerItem/HourPrice,2.Lower$Value,3.MaybeusedtodevelopinfoinRFP.
9 BuyersRisk(fromHighesttoLowest):CPFFT&MCPIFFPIFFFP
9 Aprojectbaselineservesasacontroltool.Projectplanexecutionandworkresultsaremeasuredagainsttheproject
baselines.
9 Theprojectplanservesasaguidetoallfutureprojectdecisions.
9 IntegratedChangeControlisasystemtodocumentchanges,theirimpact,responsetochanges,andperformancedeficits.
9 Configurationmanagementinvolvesmakingsurethateveryoneisworkingoffthesamedocumentsandversion.
9 Onlywithformalacceptancecantheprojectmanagerbesuretheprojectworkisreallycomplete.
9 TheprojectwiththehighestNPVisthebestone.
5|P a g e


9 Constrainedoptimizationusesmathematicalmodels.
9 Linearprogrammingisamathematicalmodel.
9 ThelargertheBCR,SPIandCPIthebetter.
9 Itisbettertocapturedataattheendofeachphaseofaproject.Donotwaituntiltheend.
9 Aworkauthorizationsystemisusedtocoordinatewhenandinwhatordertheworkisperformed.
9 ApprovedChangeswillleadtochangestothebaseline.
9 Itisthesponsor'sroletodetermineobjectives.Theseobjectivesaredescribedintheprojectcharter.
9 Thelessonslearnedareprojectmanagementdeliverables.
9 Thearchiveisthelastthingtocreatebeforereleasingtheteam.
9 Scopeverificationfocusesoncustomeracceptanceofadeliverable
9 Productverificationisfocusedonmakingsurealltheworkiscompletedsatisfactorily.
9 Theprojectmanagerisalsoanintegrator,andacommunicator.
9 Thescopestatementservesasapointofreferenceforallfutureprojectdecisions.
9 ThescopebaselineincludestheWBS,WBSdictionary,andprojectscopestatement.
9 Ateammembershouldhaveflexibilityattheworkpackageleveltomakesomechangesaslongastheyarewithinthe
overallscopeoftheWBSdictionary.
9 WorkthatisnotintheWBSisoutsidethescopeoftheproject.
9 Levelingresourcesgenerallyextendstheschedule.
9 Correctiveactionisanythingdonetobringexpectedfuturescheduleperformanceinlinewiththeprojectmanagement
plan.
9 Qualityattributesarethemeasurementsthatdetermineiftheproductisacceptable.Theyarebasedonthe
characteristicsoftheproductforwhichtheyweredesigned.
9 PerformQualityAssuranceinvolvesdeterminingwhetherstandardsarebeingfollowed.

6|P a g e


9 Datapointsoutsidethecontrollimitsindicatetheprocessisoutofcontrol,andproductionshouldbestoppeduntila
solutionisfound.
9 Inspectionsmaybeconductedatanylevelincludingtheprojectteam,andatanytimethroughouttheproduct
development.Theyareusedtopreventdefectsfrombeingdeliveredtothecustomer.
9 Trendanalysisexaminesprojectresultsovertimetoevaluateperformance.
9 Thecontrollimitsaresetbasedonthecompany'squalitystandardandindicatetheacceptablerange.
9 Thehaloeffectistheassumptionthatbecausethepersonisgoodatatechnologytheydalsobegoodatmanaginga
project.(Whichisawrongassumption).
9 Confrontingmeansproblemsolvingandproblemsolvingisthebestwaytoresolveconflict.
9 StaffingManagementPlan:WHENandHOWresourcewillbeADDEDandTAKENOFFtheteam.
9 Acornerofficeisa"perk"whereashealthbenefitsareafringebenefit.
9 Thefinalstepsofproblemsolvinginclude:implementadecision,reviewit,andconfirmthatthedecisionsolvedthe
problem.
9 Acommunicationmatrixisanexcellenttooltoidentifythestakeholdersandtheirrequirementsforcommunication.
9 ReportPerformanceisamonitoringandcontrollingprocess.
9 Nonverbalcommunicationcarries55%ofthemessage.
9 ProgressReportsgenerallyshowproblemsaftertheyhaveoccurred.
9 Anerrorvalueofsevenpercentrepresentsthethresholdtheprojectisallowedtooperateunder.
9 Whenthescopehasbeenchanged,theprojectmanagershouldrequireriskplanningtoanalyzetheadditionsforrisksto
theprojectsuccess.
9 MonteCarlosimulationscanrevealmultiplescenariosandexaminetherisksandprobabilityofimpact.ItisaComputer
basedAnalysis&usefulforrevealingScheduleRisks
9 Adecisiontreeallowsyoutomakeaninformeddecisiontodaybasedonprobabilityandimpactanalysis.Youcandecide
basedontheexpectedmonetaryvalueofeachofyouroptions.

7|P a g e


9 Ariskratingmatrixisdevelopedbyadepartmentoracompanytoprovideastandardmethodforevaluatingrisks.This
improvesthequalityoftheratingforallprojects.AriskratingmatrixiscreatedduringthePerformQualitativeRisk
Analysisprocess.
9 Theriskresponseownerisassignedtocarryoutresponsesandmustkeeptheprojectmanagerinformedofanychanges.
9 Afaircontractsharesareasonableamountofriskbetweenthebuyerandtheseller
9 AnSOWcanbeacontractifbothpartiesagreetotheSOWandsignthedocumentasacontract.
9 Asinglesourcesellermeansthereisonlyonesellerthecompanywantstodobusinesswith.
9 AnIFBistypicallyarequestforasealeddocumentthatliststhesellersfirmpricetocompletethedetailedwork.
9 WedecomposetheProjectusingaWBS.
9 Theprojectmanagershouldattendthebidderconference.
9 Asellercannotissueachangeorder(althoughhecouldrequestone).
9 Specialprovisionstakeprecedenceovergeneralprovisions.
9 Theonlywaytochangethecostplusfixedfeecontractistonegotiateachangetothecontract,normallyintheformof
changeorders.Changeordersshouldincludeanadditionalfeeifadditionalworkisaddedtothecontract.
9 Aprocurementauditincludeswhatwentrightandwrongforthepurposesofcreatinghistoricalrecordsandimproving
futureperformance.
9 Whenyoumustbeginworkimmediatelywithoutaprocurementstatementofwork,themostappropriatechoiceisT&M.
9 Theindependentestimateismostconcernedwithcost,comparingcostestimateswithinhouseestimates,orwithoutside
assistance.
9 Aletterofintentisnotbindinginacourtoflaw,itdoesmakethesellerfeelmorecomfortableaboutexpendingfunds
beforeacontractissigned.
9 Generallyinprocurementsituations,achangecontrolboardmightreviewandapproveorrejectachange,butonlythe
procurementmanagerhastheauthoritytosignachange.
9 Incentivesaremeanttobringtheobjectivesofthesellerinlinewiththoseofthebuyer.Thatwaybothareprogressing
towardthesameobjective.

8|P a g e


9 Professionalandsocialresponsibilityrequirestheinvestigationofanyinstancewherethelegitimateinterestsofthe
customermaybecompromised.Ifsuchacompromiseisfound,actionmustbetaken.
9 Wheneveryouareuncertainofwhetherapaymentisabribe,youshoulddiscussthesituationwithlegalcounsel.
9 Theprojectmanager'sresponsibilityistoprovidetruthfulprojectinformation.Heorsheshouldthereafterdiscussthe
impactsoftheiractionswiththeteammembers.Ifthatdoesnotwork,thenextstepistoreportittotheirfunctional
managers.
9 TheProjectManagershouldalwaysbeasEXPLICIT,DIRECT,andUNAMBIGUOUSaspossiblegiventheculturalconditions.
9 All10Monitoring&ControllingProcesseshaveChangeRequestsasanoutput.
9 RequirementsCategories:1.ProductRequirements(TechnicalSpecifications);2.ProjectRequirements(Operational
Specifications)
9 ProjectMurderBoardisdefinedasapanelofpeoplewhotrytoshootdownanewprojectidea.
9 ManagementByWalkingArounddonebyObservationandConversation
9 QualityBenefitsmustoutweightheCost.
9 Prevention:Keepingerrorsoutoftheprocess.
9 Inspection:Keepingerrorsoutofthehandsofthecustomer
9 LeadsandlagsareAPPLIEDaspartoftheDevelopScheduleprocess,butthentheyareADJUSTEDintheprocessofControl
Schedule.
9 Asuccessfulprojectmanagerwilllearntheartofdelegationwhattodelegatetoothersandwhattonotdelegate.
9 TheBudgetatCompletion(BAC)andPlannedValue(PV)canbothbecalculatedbeforeworkbegins.
9 TheissuelogisatoolusedinManageProjectTeamintheHumanResourceManagementknowledgearea.
9 MutuallyExclusiveiswhentwoeventscannotbothhappenatthesametime.
9 Adocumentmanagementsystemisaconfigurationmanagementtool,usefulintheprojectmanagementinformation
system.ConfigurationinformationinparticularwillassistwiththetoolofVarianceAnalysisintheprocessofControl
Scope.

9|P a g e

Success is yours,
FormorePMPexamtipsvisitourwebsitewww.pmlead.netandsubscribetoournewsletter.
FollowusonTwitter&Facebook
[email protected]

Good management is the art of making problems so interesting and their solutions so constructive
that everyone wants to get to work and deal with them. Paul Hawken

Please refer to PMBOK 4th edition as complete reference

10|P a g e