CAM CAM Resource Management & Allocation 2 — Questions and Answers
Question 1: What is 'labor rate variance' in CAM resource management?
- The difference between planned and actual hours worked
- The difference between the planned and actual cost per hour for labor resources (Correct answer)
- The variance caused by rework on labor-intensive tasks
- The cost difference between direct and indirect labor
Correct answer: The difference between the planned and actual cost per hour for labor resources
Labor rate variance measures the difference between the budgeted hourly rate and the actual rate paid for labor, impacting the control account cost performance.
Question 2: What is 'labor efficiency variance' in a control account?
- The cost difference between senior and junior staff
- The difference between budgeted hours and actual hours worked for a given amount of output (Correct answer)
- The variance caused by resource unavailability
- The difference between planned and actual labor rates
Correct answer: The difference between budgeted hours and actual hours worked for a given amount of output
Labor efficiency variance compares the budgeted hours needed to complete work with the actual hours consumed, reflecting workforce productivity.
Question 3: In EVMS, what is 'undistributed budget (UB)'?
- Budget withheld by the customer pending contract award
- Budget authorized for the project but not yet assigned to specific control accounts or work packages (Correct answer)
- The management reserve held outside the PMB
- Indirect costs that have not been allocated to control accounts
Correct answer: Budget authorized for the project but not yet assigned to specific control accounts or work packages
Undistributed budget is budget that has been authorized for the contract but has not yet been formally distributed to specific control accounts or work packages in the WBS.
Question 4: What is the purpose of 'Management Reserve (MR)' in an EVMS contract?
- To fund approved scope changes from the customer
- To provide budget held outside the PMB for unplanned in-scope work (Correct answer)
- To cover cost overruns identified by the control accounts
- To supplement overhead and G&A costs during project execution
Correct answer: To provide budget held outside the PMB for unplanned in-scope work
Management Reserve (MR) is budget outside the PMB held by management to address unplanned but in-scope work that arises during project execution.
Question 5: Which resource management technique assigns resources based on task priority to resolve over-allocation?
- Resource leveling
- Critical chain method (Correct answer)
- Resource smoothing
- Resource crashing
Correct answer: Critical chain method
The critical chain method prioritizes resources to the critical chain (longest resource-constrained path) and uses feeding buffers to protect the project completion date.
Question 6: What is 'make-or-buy analysis' in the context of CAM resource management?
- A cost-benefit analysis of buying new project management software
- An analysis to determine whether to perform work internally or procure it externally (Correct answer)
- A comparison of direct vs. indirect labor costs
- An assessment of whether to use permanent staff or contractors
Correct answer: An analysis to determine whether to perform work internally or procure it externally
Make-or-buy analysis evaluates whether it is more cost-effective and strategically sound to perform work with in-house resources or to outsource it to external vendors.
CAM CAM Resource Management & Allocation 2
What is 'labor rate variance' in CAM resource management?