ME or MEng Master of Engineering Master of Engineering Management 5 — Questions and Answers
Question 1: A program manager is using Integrated Master Schedule (IMS) with Earned Value Management (EVM). The Cost Performance Index (CPI) is 0.78. This means:
- The project will finish 22% ahead of schedule
- The project is getting $0.78 of value for every $1.00 spent (Correct answer)
- The project has spent 78% of its total budget
- The project team is 22% understaffed
Correct answer: The project is getting $0.78 of value for every $1.00 spent
CPI = Earned Value / Actual Cost; a CPI of 0.78 means only 78 cents of planned work value is being produced per dollar spent, signaling a cost overrun trend.
Question 2: Which organizational structure gives functional managers the most authority over engineers assigned to a project?
- Projectized organization
- Strong matrix organization
- Functional organization (Correct answer)
- Balanced matrix organization
Correct answer: Functional organization
In a functional organization, engineers report directly to their functional department head, who controls assignments, priorities, and performance reviews.
Question 3: A product development team uses Quality Function Deployment (QFD). The 'House of Quality' primarily maps:
- Manufacturing process steps to quality control checkpoints
- Customer requirements (WHATs) to engineering characteristics (HOWs) (Correct answer)
- Supplier capabilities to design tolerances
- Failure modes to corrective action owners
Correct answer: Customer requirements (WHATs) to engineering characteristics (HOWs)
QFD's House of Quality translates the voice of the customer into specific, measurable engineering design targets, prioritizing features by customer importance.
Question 4: When managing a geographically distributed engineering team across multiple time zones, the most effective communication practice is to:
- Require all team members to work the headquarters time zone
- Establish overlapping core hours and rely heavily on asynchronous documentation (Correct answer)
- Limit collaboration to email only to create a written record
- Hire a local manager in each region with no central coordination
Correct answer: Establish overlapping core hours and rely heavily on asynchronous documentation
Defined overlap hours allow real-time collaboration for critical decisions while asynchronous tools (shared docs, recorded meetings) enable productive work outside those windows.
Question 5: The 'learning curve effect' in engineering production management predicts that:
- Quality defects increase as production volume grows
- Unit labor costs decrease by a fixed percentage each time cumulative volume doubles (Correct answer)
- Engineers require retraining every time production volume doubles
- Fixed costs per unit rise as the workforce gains experience
Correct answer: Unit labor costs decrease by a fixed percentage each time cumulative volume doubles
Learning curve theory states that as cumulative production doubles, unit labor hours fall by a constant percentage (e.g., 80% curve = 20% reduction each doubling).
Question 6: An engineering manager must present a business case to secure R&D funding. Which metric best demonstrates a project's potential to create shareholder value relative to its investment?
- Payback period
- Net Present Value (NPV) (Correct answer)
- Total project budget
- Headcount required
Correct answer: Net Present Value (NPV)
NPV measures the difference between the present value of future cash inflows and outflows, directly quantifying value creation above the cost of capital.
Question 7: In risk management, the difference between 'risk appetite' and 'risk tolerance' is best described as:
- They are synonymous terms used interchangeably in PMI standards
- Appetite is the broad level of risk an organization is willing to accept; tolerance is the acceptable variance around specific objectives (Correct answer)
- Tolerance refers to financial risk only; appetite applies to schedule risk
- Appetite is set by regulators; tolerance is set by project managers
Correct answer: Appetite is the broad level of risk an organization is willing to accept; tolerance is the acceptable variance around specific objectives
Risk appetite is the organization's overall posture toward risk-taking, while risk tolerance defines the acceptable deviation limits for specific goals like cost or schedule.
ME or MEng Master of Engineering Master of Engineering Management 5
A program manager is using Integrated Master Schedule (IMS) with Earned Value Management (EVM).
The Cost Performance Index (CPI) is 0.78.
This means: