CAM Foundational Concepts & Principles 3 — Questions and Answers
Question 1: Which element is NOT part of the Performance Measurement Baseline?
- Management reserve (Correct answer)
- Distributed budget in control accounts
- Undistributed budget
- Summary level planning packages
Correct answer: Management reserve
Management reserve is held outside the PMB for unknown risks, while distributed budget, undistributed budget, and summary level planning packages are within it.
Question 2: A work package differs from a planning package primarily because a work package is:
- Near-term, detail-planned effort with assigned earned value techniques (Correct answer)
- Far-term effort not yet defined in detail
- Budget held at the program level for risks
- A customer-controlled funding increment
Correct answer: Near-term, detail-planned effort with assigned earned value techniques
Work packages are detail-planned near-term tasks with specific earned value methods, while planning packages hold far-term budget pending detail planning.
Question 3: Under rolling wave planning, what must a CAM do before a planning package's work begins?
- Convert it into detail-planned work packages without changing its total budget or scope (Correct answer)
- Transfer its budget to management reserve
- Close it out and report the variance
- Merge it with another control account
Correct answer: Convert it into detail-planned work packages without changing its total budget or scope
Planning packages must be converted to work packages before work starts, preserving scope, schedule, and budget traceability.
Question 4: Which earned value technique is most appropriate for a discrete work package spanning two months with two distinct outputs?
- Milestone weights or fixed formula such as 50/50 (Correct answer)
- Level of effort
- Apportioned effort
- Management estimate at completion
Correct answer: Milestone weights or fixed formula such as 50/50
Short discrete work with identifiable outputs is best measured with milestone or fixed-formula techniques like 50/50 or 25/75.
Question 5: Why is Level of Effort (LOE) the least preferred earned value technique?
- It earns value with the passage of time, so it can never show a schedule variance (Correct answer)
- It requires customer approval each month
- It overstates cost variances
- It cannot be time-phased in the baseline
Correct answer: It earns value with the passage of time, so it can never show a schedule variance
LOE automatically earns its budget as time passes, masking schedule performance and diluting meaningful variances.
Question 6: The Schedule Performance Index (SPI) is calculated as:
- BCWP divided by BCWS (Correct answer)
- ACWP divided by BCWP
- BCWS divided by ACWP
- BAC divided by EAC
Correct answer: BCWP divided by BCWS
SPI equals earned value (BCWP) divided by planned value (BCWS), with values below 1.0 indicating schedule slippage.
Question 7: A CAM's control account shows CPI of 0.85. What does this mean?
- The account is earning only 85 cents of value for every dollar spent (Correct answer)
- The account is 15 percent ahead of schedule
- The account has 85 percent of its budget remaining
- Costs are 15 percent under budget
Correct answer: The account is earning only 85 cents of value for every dollar spent
A CPI below 1.0 means cost efficiency is unfavorable, with only $0.85 of work earned per $1.00 actually spent.
CAM Foundational Concepts & Principles 3
Which element is NOT part of the Performance Measurement Baseline?