CPSM CSPM Time, Cost & Resource Management 5 — Questions and Answers
Question 1: A project team is planning using Monte Carlo simulation. What is the primary benefit of this technique for schedule management?
- It provides a single deterministic project end date
- It produces a probability distribution of possible completion dates accounting for uncertainty (Correct answer)
- It eliminates the need for three-point estimating
- It calculates the critical path without manual analysis
Correct answer: It produces a probability distribution of possible completion dates accounting for uncertainty
Monte Carlo simulation runs thousands of scenarios with varying task durations to generate a probability distribution of project completion dates.
Question 2: What is 'management reserve' in project cost management?
- Budget set aside for known risks identified in the risk register
- Funds withheld by management for unknown unknowns outside project scope
- The difference between the cost baseline and the project budget (Correct answer)
- Money allocated to cover cost variances on individual tasks
Correct answer: The difference between the cost baseline and the project budget
Management reserve covers unknown unknowns and sits above the cost baseline; it is not part of the cost baseline but is included in the overall project budget.
Question 3: A project manager notices team members are consistently underestimating task durations. What is this cognitive bias called?
- Scope creep bias
- Planning fallacy (Correct answer)
- Optimism bias in scheduling
- Anchoring effect
Correct answer: Planning fallacy
The planning fallacy is the tendency to underestimate task duration and cost while overestimating benefits, a well-documented cognitive bias in project planning.
Question 4: What is 'gold plating' in the context of project scope and cost management?
- Adding premium-quality materials that were included in the approved scope
- Adding extra features or quality beyond what the customer requested, consuming budget (Correct answer)
- Using expensive tools to reduce project duration
- Inflating cost estimates to create budget reserves
Correct answer: Adding extra features or quality beyond what the customer requested, consuming budget
Gold plating occurs when the project team adds unauthorized enhancements beyond agreed scope, wasting budget and potentially causing rework.
Question 5: When crashing a project schedule, which tasks should be crashed first to maximize schedule compression at minimum cost?
- Tasks with the most float on non-critical paths
- Critical path tasks with the lowest crash cost per unit of time saved (Correct answer)
- Tasks with the longest duration regardless of path
- Non-critical tasks that can be reassigned easily
Correct answer: Critical path tasks with the lowest crash cost per unit of time saved
To minimize cost when crashing, identify critical path tasks with the lowest cost-slope (cheapest cost per unit of time saved) and crash those first.
Question 6: A project has a Planned Value (PV) of $150,000, Earned Value (EV) of $120,000, and Actual Cost (AC) of $110,000. What is the Schedule Variance (SV)?
- +$10,000
- -$30,000 (Correct answer)
- +$30,000
- -$10,000
Correct answer: -$30,000
SV = EV – PV = $120,000 – $150,000 = –$30,000, indicating the project is $30,000 worth of work behind schedule.
Question 7: What does the concept of 'resource calendar' define in project resource management?
- The sequence in which resources should be assigned to tasks
- When specific resources are available, including working days, holidays, and shifts (Correct answer)
- The total budget allocated for resource procurement
- The skill levels required for each project role
Correct answer: When specific resources are available, including working days, holidays, and shifts
A resource calendar specifies when each resource (person, equipment, material) is available, including working hours, shifts, holidays, and other constraints.
CPSM CSPM Time, Cost & Resource Management 5
A project team is planning using Monte Carlo simulation.
What is the primary benefit of this technique for schedule management?