Project and Financial Management Flashcards

A project manager calculates the Cost Performance Index (CPI) as 0.85. What does this indicate?

Answer: The project is getting $0.85 in value for every $1 spent

A CPI of 0.85 means the project is over budget, earning only $0.85 of planned value for each dollar spent.

Which scheduling technique uses probabilistic time estimates including optimistic, pessimistic, and most likely durations?

Answer: Program Evaluation and Review Technique (PERT)

PERT uses three-point estimates (optimistic, pessimistic, most likely) to account for uncertainty in activity durations.

What is the primary purpose of a Work Breakdown Structure (WBS)?

Answer: To decompose project deliverables into manageable work packages

A WBS hierarchically decomposes project scope into smaller, manageable deliverables and work packages.

A project has a Budget at Completion (BAC) of $200,000, Earned Value (EV) of $80,000, and Actual Cost (AC) of $100,000. What is the Estimate at Completion (EAC) using the CPI?

Answer: $250,000

EAC = BAC / CPI = $200,000 / (80,000/100,000) = $200,000 / 0.8 = $250,000.

Which type of project dependency exists when one task cannot start until another has finished?

Answer: Finish-to-Start (FS)

A Finish-to-Start dependency means the successor activity cannot begin until the predecessor has completed.

What does 'scope creep' refer to in project management?

Answer: Gradual unauthorized expansion of project scope without corresponding adjustments to resources or schedule

Scope creep is the uncontrolled expansion of project scope without corresponding changes to time, cost, or resources.

In risk management, what is the difference between risk mitigation and risk avoidance?

Answer: Avoidance eliminates the risk entirely; mitigation reduces probability or impact

Risk avoidance eliminates the threat by changing the plan, while mitigation reduces the probability or impact of a risk.