CEC CEC Value Engineering & Cost Control 2 — Questions and Answers
Question 1: What is the purpose of a cost-loaded schedule in construction project management?
- Set crew sizes for each trade
- Assign budget dollars to schedule activities for cash-flow forecasting (Correct answer)
- Determine overtime requirements
- Track equipment maintenance intervals
Correct answer: Assign budget dollars to schedule activities for cash-flow forecasting
A cost-loaded schedule ties budget amounts to schedule activities, enabling accurate cash-flow projections and earned value tracking throughout the project.
Question 2: During a VE workshop, the FAST (Function Analysis System Technique) diagram is used to:
- Diagram electrical circuits
- Map project functions from high-level to basic level to identify cost-reduction targets (Correct answer)
- Schedule fast-track activities
- Organize subcontractor bids
Correct answer: Map project functions from high-level to basic level to identify cost-reduction targets
FAST diagrams organize project functions hierarchically, revealing which functions are unnecessary or over-engineered and thus prime VE targets.
Question 3: An earned value analysis shows SPI = 0.85 and CPI = 0.92. What does this indicate?
- Project is ahead of schedule and under budget
- Project is behind schedule and over budget (Correct answer)
- Project is on schedule but over budget
- Project is behind schedule but under budget
Correct answer: Project is behind schedule and over budget
An SPI below 1.0 means the project is behind schedule, and a CPI below 1.0 means it is spending more than planned for the work accomplished.
Question 4: Which document formally records an approved VE change and adjusts the contract sum accordingly?
- Request for Information (RFI)
- Submittal log
- Change order (Correct answer)
- Daily field report
Correct answer: Change order
A change order is the contractual instrument that documents scope changes, including VE substitutions, and adjusts the contract price and schedule.
Question 5: What is the difference between direct cost control and indirect cost control on a construction project?
- Direct controls labor only; indirect controls equipment only
- Direct addresses field production costs; indirect addresses overhead and support costs (Correct answer)
- Direct is owner-managed; indirect is contractor-managed
- Direct applies to subcontractors; indirect applies to the GC only
Correct answer: Direct addresses field production costs; indirect addresses overhead and support costs
Direct cost control targets field labor, materials, and equipment tied to physical work, while indirect cost control manages project overhead such as supervision, temporary facilities, and insurance.
Question 6: A Pareto analysis of construction cost overruns would focus corrective efforts on:
- All cost codes equally
- The 20% of causes responsible for roughly 80% of overruns (Correct answer)
- Minor variance items first
- Subcontractor invoices only
Correct answer: The 20% of causes responsible for roughly 80% of overruns
Pareto analysis applies the 80/20 rule, directing attention to the vital few cost drivers that cause the majority of budget problems.
CEC CEC Value Engineering & Cost Control 2
What is the purpose of a cost-loaded schedule in construction project management?