A Top-Down Estimate: A top-down estimate starts with an overall estimate and then breaks it down

into smaller parts. It's useful for high-level planning and offers a quick overview, but it may lack the
detailed accuracy of a bottom-up estimate.

Analogous Estimating: Analogous estimating involves using historical information from similar past
projects to estimate the duration, cost, or resource requirements of a current project task. It relies
on the assumption that similar projects will have similar characteristics and resource needs. For
instance, if a previous project to build a website took three months and cost $50,000, a new website
project with similar features might be estimated around the same time and cost. This is based on
similar past projects

Three-Point Estimating/Beta estimating: Three-point estimating involves providing three estimates

for a task: an optimistic estimate (O), a pessimistic estimate (P), and a most likely estimate (M). These
estimates are then used to calculate an expected value using a formula like (O + 4M + P) / 6. For
example, if estimating a task completion time:

Optimistic Estimate (O): 1 week

Most Likely Estimate (M): 2 weeks

Pessimistic Estimate (P): 4 weeks Expected Time = (1 + 4(2) + 4) / 6 = 2.17 weeks

Parametric Estimating: Parametric estimating involves using statistical relationships and

mathematical models to estimate based on variables and parameters. It uses historical data and
mathematical formulas to calculate estimates. For example, a construction project might use a cost
per square foot formula to estimate the total cost of building based on the area to be constructed
and historical cost data per square foot. Look for picture from training.

Estimating Project and considerations: Adding additional time or padding the estimate is a common
practice in this process, so the project manager should make sure that the estimates from the team
members are realistic. It is important that all estimates in this process should use a common work
unit/period.

Rewarding good behavior: Acknowledging and providing incentives for positive actions,
accomplishments, or behaviors to encourage their continuation.

The halo effect: Forming an overall positive opinion about an individual based on one or more
positive traits or characteristics, potentially leading to assumptions of competence in unrelated
areas.
Perquisites: Also known as perks, these are supplementary benefits or advantages offered to
employees beyond their regular salary, often including items like company cars, healthcare, or stock
options.

Withdrawing or Avoiding: This technique involves avoiding or sidestepping the conflict altogether. It
might be useful when the issue is minor or when emotions are running high, but it doesn't resolve
the conflict and can lead to festering issues.

Forcing: Forcing is a competitive approach where one party imposes its solution or viewpoint on the
other. It can lead to quick resolution but might create resentment and damage relationships.

Confronting or Problem-Solving: This approach involves openly addressing the conflict, discussing
the issues, and collaboratively working towards a solution that satisfies both parties. It aims to find a
win-win outcome through open communication and problem-solving.

Compromising: Compromising seeks a middle ground where both parties give up something to reach
an agreement. It can be effective for reaching a quick solution, but it might not fully address the
underlying concerns of either party.

Self-regulation primarily refers to an individual's ability to manage and control their own thoughts,
emotions, and behaviors to achieve desired outcomes. Self-Control, Trustworthiness,
Conscientiousness, and Adaptability are self-regulation elements. But not AGILITY.

Enhance is a strategy to deal with an opportunity. By influencing the underlying risk triggers, this
strategy increases the size, probability, likelihood, and positive impact of an opportunity.

Risk Trigger: Symptoms or warning signs that a potential risk is about to occur. For instance, a key
team member searching for a better job opportunity is a warning that the person may be leaving the
team soon, causing schedule delay, increase cost and other issues. Another example could be, a
vendor cannot submit the documents according to the planned time due to severe weather issues.

Risk probability and impact assessment: This is a fundamental tool and technique of Qualitative Risk
Analysis. It involves assessing the likelihood and consequences of identified risks to determine their
overall impact on the project.

Probability and impact matrix: This is a key tool of Qualitative Risk Analysis. It involves mapping the
probability and impact of risks on a matrix to classify and prioritize them based on their potential
significance.

Expected monetary value analysis: This is typically associated with Quantitative Risk Analysis, not
Qualitative Risk Analysis. It involves calculating the expected monetary value of each risk, considering
both its probability and potential impact in financial terms.

Risk data quality assessment: This is a valid tool and technique of Qualitative Risk Analysis. It
involves evaluating the quality and reliability of risk-related data to ensure that the analysis is based
on accurate and credible information.

In case of difficulties in evaluating exact cost impact of risks(Q120, Simulator4): If you cannot
estimate the value of the impact, you can utilize qualitative estimates such as low, medium, and high.
Qualitative Risk Analysis is the process of prioritizing risk by assessing and combining their probability
of occurrence and impact to the project if they occur. This fast, relatively easy to perform, and cost-
effective process ensures that the right emphasis is on the right risk areas as per their ranking and
priority and helps to allocate adequate time and resources for them. Even though numbers are used
for the rating in the Perform Qualitative Risk Analysis process, it is a subjective evaluation and should
be performed throughout the project.

Numerical Basis: Assessing risks based on specific numerical values, often involving quantified data
and precise calculations.

Quantitative Basis: Evaluating risks using quantitative data and calculations to estimate their
potential impact, often involving numerical values and statistical analysis.

Qualitative Basis: Assessing risks based on their relative impact and likelihood without assigning
specific numerical values, focusing on understanding the nature and potential consequences of risks.

Forecast Basis: Evaluating risks by predicting potential outcomes based on available data and trends,
often involving projection and estimation of future scenarios.

Net Present Value: Higher NPV is better and it has to be chosen. Net Present Value is a financial
metric used to evaluate the profitability of an investment or project. It calculates the difference
between the present value of cash inflows and the present value of cash outflows over a specific
period. A positive NPV indicates that the project is expected to generate more cash inflows than
outflows and is potentially a profitable investment.

Work authorization system. A work authorization system is NOT a tool & technique of the project
monitoring & controlling process. It is a subset of the Project Management Information System
(PMIS). It is a formal, documented procedure to describe how to authorize and initiate work in the
correct sequence at the appropriate time and is used throughout the executing process group.

Present Value: Present Value represents the current value of a future sum of money, discounted at a
specific rate. It helps determine what a future cash flow is worth today. PV takes into account the
time value of money, which means that money available today is generally considered to be worth
more than the same amount in the future. PV = FV(Future Value)/(1+r)*n – n means number of
years, r means rate of interest.

Gold plating in project management refers to the practice of adding extra features, functionalities, or
deliverables to a project beyond what was originally agreed upon or required by the project scope.
This often occurs when team members or stakeholders, with good intentions or due to
misunderstanding, go beyond the project's requirements in an attempt to enhance its value or
perceived quality. Gold plating can lead to Scope Creep.
Scope Creep: Scope creep refers to the uncontrolled expansion of product or project scope without
adjustments to time, cost, and resources; in other words, it is scope that has not been approved.

No Denying change from PM A project manager should make sure that the change requests are
evaluated and presented to the CCB for review. The project manager should NOT deny changes.

Standard Deviation: Standard deviation is a statistical measure that indicates the amount of variation
or dispersion in a set of data points. It quantifies how much individual data points differ from the
mean (average) of the dataset. A higher standard deviation suggests greater variability, while a lower
standard deviation indicates more consistency.

Standard Deviation if PERT Estimates are given: The formula to calculate the standard deviation (σ)
of a PERT estimate is:

σ = (P - O) / 6

Where:

 P is the Pessimistic estimate

 O is the Optimistic estimate

If you get asked to calculate overall standard deviation, upon giving PERT values of each task, the
overall standard deviation has to be calculated using: Now, to calculate the overall standard
deviation of the critical path: σ_path = √(σ1² + σ2² + σ3² + σ4² + σ5²)

Statistical Sampling: Statistical sampling involves selecting a subset of data or individuals from a
larger population to make inferences or draw conclusions about the entire population. It allows for
efficient and cost-effective data collection and analysis, providing insights into broader trends based
on a representative sample.

Mutual Exclusivity: Mutual exclusivity refers to a relationship between events or conditions that
states they cannot occur simultaneously. In other words, if one event happens, the other cannot
occur at the same time. It's often used in probability calculations and decision-making.

Normal Distribution: Normal distribution, also known as the Gaussian distribution or bell curve, is a
probability distribution commonly observed in nature. It is symmetric around the mean and
characterized by its shape, with most data points clustering near the mean and fewer data points
farther away. Many real-world phenomena, such as heights or exam scores, follow a normal
distribution pattern.

Procurement performance review is a structured review that consists of seller-prepared

documentation, buyer inspection, and a quality audit of the seller's progress to deliver project scope
and quality within cost and on schedule as compared to the contract. The objective is to identify
performance progress or failures, noncompliance, and areas where performance is a problem.

Inspections and audits are activities mainly focused on the product itself and its conformance to
specifications.

Performance reporting is an excellent tool that provides management with information about how
effectively the seller is meeting contractual objectives

Risk Response:

Share: Sharing involves transferring a portion of the risk to a third party who is better equipped to
handle or absorb it.