Project Management Project Scheduling and Costing 5 — Questions and Answers
Question 1: Which technique identifies the minimum project duration by finding the longest sequence of dependent activities?
- Resource leveling
- Critical Path Method (CPM) (Correct answer)
- Monte Carlo simulation
- Earned value management
Correct answer: Critical Path Method (CPM)
CPM calculates the longest path through the project network, which determines the shortest possible project duration.
Question 2: A project manager uses Monte Carlo simulation for schedule risk analysis. What is the primary output of this technique?
- A single deterministic project end date
- A probability distribution of possible project outcomes (Correct answer)
- The critical path with resource constraints applied
- A ranked list of schedule risks by impact
Correct answer: A probability distribution of possible project outcomes
Monte Carlo simulation runs thousands of scenarios to produce a probability distribution showing the likelihood of completing by various dates.
Question 3: What is 'management reserve' in project cost management?
- Budget allocated for identified risks within scope
- Budget withheld by management for unknown unknowns outside project scope (Correct answer)
- The profit margin added to the project estimate
- Funds retained for post-project warranty work
Correct answer: Budget withheld by management for unknown unknowns outside project scope
Management reserve is a portion of the total budget held by upper management for unforeseen work outside the current project scope.
Question 4: Which schedule compression technique increases project risk the most?
- Crashing
- Fast-tracking (Correct answer)
- Resource leveling
- Schedule rebaselining
Correct answer: Fast-tracking
Fast-tracking increases risk because performing planned sequential activities in parallel creates more opportunities for rework and errors.
Question 5: What is a 'lead' in project scheduling?
- The project manager's primary contact on the team
- A time advance that allows a successor activity to start before its predecessor completes (Correct answer)
- An extra buffer added to high-risk activities
- The first activity on the critical path
Correct answer: A time advance that allows a successor activity to start before its predecessor completes
A lead allows a successor activity to begin before its predecessor finishes, effectively accelerating the schedule.
Question 6: When actual costs exactly equal earned value (AC = EV), what is the Cost Performance Index (CPI)?
- 0
- 0.5
- 1.0 (Correct answer)
- 2.0
Correct answer: 1.0
CPI = EV / AC; when EV equals AC, CPI = 1.0, meaning the project is exactly on budget.
Question 7: Which type of cost is directly attributable to a specific project activity and would not exist without it?
- Indirect cost
- Overhead cost
- Direct cost (Correct answer)
- Sunk cost
Correct answer: Direct cost
Direct costs are expenses that can be traced directly to a specific project activity, such as materials, labor, or equipment specific to a task.
Project Management Project Scheduling and Costing 5
Which technique identifies the minimum project duration by finding the longest sequence of dependent activities?