Time & Cost Management Flashcards

What is the primary purpose of project time management?

Answer: To ensure timely project completion

Project time management involves the processes required to manage the timely completion of the project. Its primary purpose is to plan, schedule, monitor, and control project activities to ensure that the project is delivered on or before its planned completion date, meeting stakeholder expectations and project deadlines.

What technique is used to estimate the shortest time to complete a project activity?

Answer: Optimistic time

In project time management, particularly in techniques like PERT (Program Evaluation and Review Technique), the optimistic time is the shortest possible time in which an activity can be completed, assuming everything goes perfectly. It represents the best-case scenario for an activity's duration, used for more accurate time estimates.

What is the critical path in project scheduling?

Answer: The longest path that defines project duration

The critical path in project scheduling is the sequence of activities that represents the longest path through the project network diagram. It determines the shortest possible duration for the project, and any delay on a critical path activity will directly delay the entire project, making it crucial for timely completion.

Which cost management process establishes the project budget?

Answer: Cost budgeting

Cost budgeting is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. This baseline serves as the total budget for the project, against which actual costs will be measured and controlled, providing a financial framework for project execution.

What is Earned Value Management (EVM)?

Answer: A project performance measurement technique

Earned Value Management (EVM) is a project management methodology used to measure and monitor project performance and progress in an objective manner. It integrates scope, schedule, and cost data to provide a comprehensive view of project health, allowing for early identification of deviations from the plan and proactive adjustments.

Which metric represents the value of work actually performed?

Answer: Earned Value (EV)

Earned Value (EV) is a key metric in Earned Value Management (EVM) that represents the value of the work actually performed and expressed in terms of the approved budget assigned to that work. It indicates how much budget should have been spent for the work completed so far, providing a measure of physical progress.

What does Cost Performance Index (CPI) indicate?

Answer: Cost efficiency

The Cost Performance Index (CPI) is an Earned Value Management metric that measures the cost efficiency of the project. It is calculated by dividing Earned Value (EV) by Actual Cost (AC), where a CPI greater than 1 indicates the project is under budget, while less than 1 means it's over budget.

Which document details the planned start and finish dates of project activities?

Answer: Project schedule

The project schedule is a detailed document that lists planned activities, their logical dependencies, durations, and planned start and finish dates. It serves as a roadmap for executing the project, ensuring that tasks are completed in the correct sequence and within the allocated timeframes, guiding the project team's work.

Why is schedule variance important?

Answer: It indicates schedule performance

Schedule Variance (SV) is an Earned Value Management metric that indicates whether the project is ahead or behind schedule. It is calculated as Earned Value (EV) minus Planned Value (PV), where a positive SV means the project is ahead of schedule and a negative SV means it's behind, providing a clear measure of schedule performance.