Chapter 05 - Estimating Project Times and Costs
1. The process of forecasting or approximating the time and cost of completing project deliverables is called A. !dgeting A. !dgeting . Predicting . Predicting C. Estimating ". Planning ". Planning E. #!esstimating E. #!esstimating $. %n practice& estimating processes are fre'!entl( classified as A. Top do)n*bottom !p . +o!gh*polished . +o!gh*polished C. Precise*order C. Precise*order of magnit!de ". "raft*final ". "raft*final E. oth E. oth A and are correct ,. A t(pical statement in act!al practice is that estimates sho!ld have a probabilit( of being met of the time. A. 100 A. 100 . / . / C. /5 ". /0 ". /0 E. 0 E. 0 . A good starting point for developing time and cost estimates is A. Past experience . 2or3 . 2or3 pac3ages C. Tas3 C. Tas3 anal(sis ". Time ". Time and motion st!dies E. 2or3 E. 2or3 brea3do)n str!ct!re 5. 2hich of the follo)ing is not one of the factors that need to be considered to improve '!alit( of estimates for project times and costs4 A. Planning A. Planning horion . People . People C. Padding C. Padding estimates D. Profit E. Project E. Project str!ct!re
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Chapter 05 - Estimating Project Times and Costs
6. Ed is loo3ing over the act!al res!lts of projects and comparing them to )hat )as estimated. 7e notices that projects that too3 six months or longer to complete )ere noticeabl( more off the estimates. 2hich of the follo)ing factors is he recogniing4 A. Padding A. Padding estimates B. Planning horion C. Project C. Project str!ct!re ". People ". People E. 8rganiation E. 8rganiation c!lt!re 9. :anet is forecasting ho) m!ch mone( her department needs to s!pport a ne) project. ;he estimates that t)o people and <$5&000 in expenses )ill cover her needs. eca!se management t(picall( insists on red!cing forecasts b( $0 percent& she increases her estimates to allo) for that red!ction. 2hich of the follo)ing factors is ill!strated in this sit!ation4 A. Padding estimates . Planning . Planning horion C. Project C. Project str!ct!re ". People ". People E. 8rganiation E. 8rganiation c!lt!re . 2hich of the follo)ing is a good condition for top-do)n estimating4 A. Cost A. Cost and time important . =ixed . =ixed price contract C. C!stomer C. C!stomer )ants details D. %nternal& small project E. All E. All of these are good conditions for top-do)n estimating /. 2hich of the follo)ing is a good condition for bottom-!p estimating4 A. ;trategic A. ;trategic decision ma3ing . %nternal& . %nternal& small project C. =ixed price contract ". 7igh ". 7igh !ncertaint( E. oth E. oth C and " are good conditions for bottom-!p estimating 10. Top-do)n estimates estimates are most li3el( to occ!r d!ring d !ring the phase. A. Concept . Planning . Planning C. Exec!tion C. Exec!tion ". "eliver( ". "eliver( E. All E. All of these are e'!all( li3el( 11. estimates are most li3el( to !se lo) cost& efficient methods. A. Apportion A. Apportion . +atio . +atio C. Top-do)n C. Top-do)n D. ottom-!p E. All E. All of these are e'!all( li3el(
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Chapter 05 - Estimating Project Times and Costs
1$. 2hich of the follo)ing methods is not n ot considered a top-do)n approach to estimating project time and cost4 A. +atio A. +atio B. Template C. Apportion C. Apportion ". =!nction ". =!nction point E. >earning E. >earning c!rve 1,. :ose is forecasting project time and cost for constr!cting a ne) b!ilding b( m!ltipl(ing the total s'!are footage b( a given dollar amo!nt. 2hich of the follo)ing methods is he !sing4 A. +atio . Template . Template C. Apportion C. Apportion ". =!nction ". =!nction point E. >earning E. >earning c!rve 1. ;ean is forecasting the time and cost of developing a c!stomied soft)are program b( loo3ing at the n!mber of inp!ts& o!tp!ts& in'!ires& files& and interfaces. 2hich of the follo)ing methods is he !sing4 A. +atio A. +atio . Template . Template C. Apportion C. Apportion D. =!nction point E. >earning E. >earning c!rve 15. >a!ra is forecasting the time and cost of developing an intranet for a ne) c!stomer. 7er department has completed six s!ch intranets for c!stomers d!ring the last t)o (ears. Altho!gh Altho!gh the proposed s(stem is abo!t the same sie as a s the others she estimates that it )ill ta3e abo!t 10 percent less time and mone(. 2hich of the follo)ing methods is she !sing4 A. +atio A. +atio . Template . Template C. Apportion C. Apportion ". =!nction ". =!nction point E. >earning c!rve A 16. >earning c!rves are more li3el( to appl( in sit!ations )here most of the costs are A. ?aterials A. ?aterials B. >abor C. 8verhead C. 8verhead ". Evenl( ". Evenl( spread over materials& labor& and overhead E. All E. All of these are e'!all( li3el( sit!ations for learning c!rves
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Chapter 05 - Estimating Project Times and Costs
19. 2hich of the follo)ing is not one of the bottom-!p approaches to estimating project time and cost4 A. Parametric A. Parametric proced!res applied to specific tas3s . Estimates . Estimates for the 2; )or3 pac3ages C. >earning c!rve ". Template ". Template method E. All E. All of these are bottom-!p approaches 1. The approach that begins )ith a top-do)n estimate for the project and then refines estimates as the project is implemented is 3no)n as method. A. =!nction A. =!nction point . Template . Template C. >earning C. >earning c!rve D. Phase estimating E. Apportion E. Apportion 1/. 2hich of the follo)ing )o!ld be the best method for projects )here the final prod!ct is not 3no)n and the !ncertaint( is ver( large4 A. =!nction A. =!nction point . Template . Template C. >earning C. >earning c!rve D. Phase estimating E. Apportion E. Apportion $0. The acc!rac( of top-do)n estimates )ill t(picall( be in the range of A. ?in!s A. ?in!s 50 to pl!s 50 . ?in!s . ?in!s 0 to pl!s 95 C. ?in!s $0 to pl!s 60 ". ?in!s ". ?in!s ,5 to pl!s ,5 E. ?in!s E. ?in!s 10 to pl!s ,0 $1. The acc!rac( of o f bottom-!p estimates )ill t(picall( be in the range of A. ?in!s A. ?in!s 50 to pl!s 50 . ?in!s . ?in!s 0 to pl!s 95 C. ?in!s C. ?in!s $0 to pl!s 60 ". ?in!s ". ?in!s ,5 to pl!s ,5 E. ?in!s 10 to pl!s ,0 $$. The cost to prepare bottom-!p estimates )ill t(picall( r!n ho) m!ch more than the costs to prepare the top-do)n estimates4 A. Abo!t A. Abo!t the same . Abo!t . Abo!t t)ice as m!ch C. Abo!t three times as m!ch ". Abo!t ". Abo!t fo!r times as m!ch E. Abo!t E. Abo!t five times as m!ch
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Chapter 05 - Estimating Project Times and Costs
$,. T(pical T(pical 3inds of costs fo!nd in a project incl!de A. "irect A. "irect costs . Project . Project overhead costs C. #eneral C. #eneral and administrative costs ". 8nl( ". 8nl( A and are incl!ded E. A& & and C are all incl!ded $. Project costs are t(picall( vie)ed from all of the follo)ing except@ A. ;ched!led A. ;ched!led B. ;!n3 C. Act!al C. Act!al ". Committed ". Committed E. All E. All of these are correct $5. 2hich of the follo)ing )o!ld be considered a direct project cost4 A. >abor A. >abor . ?aterials . ?aterials C. E'!ipment C. E'!ipment ". oth ". oth A and are direct costs E. A& & and C are all considered direct costs $6. 2hich of the follo)ing is not one of the recommended g!idelines for developing !sef!l )or3 pac3age estimates4 A. Estimates A. Estimates sho!ld be made b( those responsible for the )or3 . se . se several people to estimate the same )or3 C. Estimates C. Estimates sho!ld be based on normal conditions D. Estimates sho!ld incl!de a normal level of contingenc( E. Estimates E. Estimates sho!ld be independent of other projects $9. Companies li3e oeing& Boda3& and %? are !sing )hich of the follo)ing for improving the estimating process4 A. Adj!sting A. Adj!sting estimates based on individ!al forecasting abilities . enchmar3ing . enchmar3ing !sing the experience of other companies C. sing C. sing time and motion st!dies D. Creating historical databases of previo!s projects E. All E. All of these are correct $. +easons )h( estimating time and cost are important incl!de all of the follo)ing except@ A. To A. To sched!le )or3 . To . To determine ho) long the project sho!ld ta3e and cost C. To C. To develop cash flo) needs ". To ". To determine ho) )ell the project p roject is progressing E. All of the above are valid reasons
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Chapter 05 - Estimating Project Times and Costs
$/. %n a learning c!rve& the improvement ratio is applied to )hich of the follo)ing items4 A. "irect A. "irect materials B. "irect labor C. 8verhead C. 8verhead ". oth ". oth A and are correct E. A& E. A& & and C are all correct ,0. The bottom-!p approach for estimating times and costs that !ses costs from past projects that )ere similar to the c!rrent project is 3no)n as@ A. "etailed A. "etailed 2; )or3 pac3age estimates B. Template method C. =!nction C. =!nction point method ". Time-phased ". Time-phased cost estimates E. Phase E. Phase estimating ,1. 2hich of the follo) top-do)n methods is !sed )hen projects closel( follo) past projects in feat!res and costs and res!lt in costs being assigned b( percentages to major segments of the project4 A. Apportion . =!nction . =!nction point C. Phase C. Phase estimating ". >earning ". >earning c!rve E. Consens!s E. Consens!s ,$. +eso!rce shortages& in the form of people& p eople& e'!ipment& or materials& is a good example e xample of A. 7idden A. 7idden interaction costs . Things . Things going )rong on a project C. ormal conditions not appl(ing ". Changes ". Changes in project scope E. one E. one of these are correct ,,. People )or3ing on protot(pe development needing time to interact )ith the design engineers after the design is completed is an example of@ A. 7idden interaction costs . Things . Things going )rong on a project C. ormal C. ormal conditions not appl(ing ". Changes ". Changes in project scope E. one E. one of these are correct ,. A manager getting f!rther into a project and obtaining a better !nderstanding of )hat needs to be done to accomplish a project is an example of@ A. 7idden A. 7idden interaction costs . Things . Things going )rong on a project C. ormal C. ormal conditions not appl(ing D. Changes in project scope E. one E. one of these are correct
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Chapter 05 - Estimating Project Times and Costs
,5. "esign fla)s being revealed after the fact& extreme )eather conditions& and accidents occ!rring are examples of@ A. 7idden A. 7idden interaction costs B. Things going )rong on a project C. ormal C. ormal conditions not appl(ing ". Changes ". Changes in project scope E. one E. one of these are correct 5/. Project estimates sho!ld be bro3en do)n into as m!ch detail than and )ith as m!ch acc!rac( as possible. FALSE
60. ottom-!p-estimating is another name for overealo!s top management estimates. FALSE
61. The !se of past experience ex perience is almost al)a(s !sed primaril( in the initial phases of a project. TRUE
6$. "!e to the averaging o!t of !nder-estimates and over-estimates& a long d!ration project is more li3el( to be on target than a short term& small project. +efer to ;napshot from Practice Page 10. FALSE
6,. The project str!ct!re chosen to manage the project )ill have little impact on the act!al project )or3 to be accomplished. FALSE
6. As long as ever(one in a project adds j!st a little padding to red!ce ris3& the project d!ration and costs are probabl( overstated b( a small amo!nt. FALSE
65. 8rganiation c!lt!re can significantl( infl!ence project time and cost estimates. TRUE
66. %f a project is internal to the compan( c ompan( and relativel( small& the bottom-!p approach to estimating time and costs for the project is the best choice. FALSE
69. %f time and costs are important to a project the top-do)n approach to estimating time and costs for the project is the best choice. FALSE
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Chapter 05 - Estimating Project Times and Costs
6. The ideal approach to estimating project time and costs is to !se both the top-do)n and the bottom-!p approach. TRUE
6/. At the strategic level top-do)n estimating methods are !sed to eval!ate a project proposal. TRUE
90. Top-do)n estimates estimates !s!all( are derived from someone )ho !ses experience and*or information to determine the project d!ration and total cost. co st. TRUE
91. Estimating the total cost of a ho!se b( b ( m!ltipl(ing the total s'!are feet b( a cost per s'!are foot is an example of the apportion method of estimating costs. FALSE
9$. Estimating the total cost of a project b( m!ltipl(ing each major f!nction b( a complexit( factor is an example of the apportion method of estimating costs. FALSE
9,. Phase estimating is !sed )hen a project cannot be rigoro!sl( defined beca!se of the !ncertaint( of design or the final prod!ct. TRUE
9. Phase estimating !ses both the bottom-!p bo ttom-!p and top-do)n methods for estimating project time and costs. TRUE
95. sing a 2; permits the !se of different levels of detail for different levels of management. TRUE
96. The Consens!s method of estimating costs is a bottom-!p techni'!e. FALSE
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Chapter 05 - Estimating Project Times and Costs
99. The salar( of the project p roject manager and her administrative assistant is classified as direct labor costs. FALSE
9. #eneral and Administrative costs are !s!all( allocated as a percent of the total of a direct cost s!ch as labor& materials& or e'!ipment. TRUE
9/. The apportion method is a top-do)n approach that !ses the pooled experience of senior and*or middle managers to estimate the total project d!ration an d cost. FALSE
0. The f!nction point method of time and cost estimating is best applied to projects p rojects that have large& complex ph(sical deliverables& s!ch as a bridge or b!ilding. FALSE
1. %dentif( and briefl( describe the t)o major categories of estimating project time and costs. 1. Top-do)n Top-do)n estimates made b( top management& and $. bottom-!p estimates are made b( b( those responsible for completing the )or3 pac3ages $. 2h( are the estimates for a projectDs time and costs important for all phases of a project4 The estimates serve as the standard for comparison of act!al and plan thro!gho!t the life of a project. ,. %dentif( the factors that sho!ld be considered co nsidered to improve the '!alit( of estimates for project times and costs. 1. planning horion& $. project d!ration& ,. people& . project str!ct!re and organiation& 5. padding estimates& 6. organiation c!lt!re& and 9. non-project factors
. nder )hat conditions )o!ld the top-do)n approach to estimating project times and costs be the best choice4 %n the earl( stages of a project to help develop the initial plan& in ma3ing strategic decisions& in projects of high !ncertaint(& in small internal projects& or in projects )ith an !nstable scope.
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Chapter 05 - Estimating Project Times and Costs
5. nder )hat conditions )o!ld the bottom-!p approach to estimating project times and costs be the best choice4 2hen lo) cost& efficient estimates are needed& )hen time and cost are important& )hen )or3ing on a fixed price contract& or )hen the c!stomer )ants details.
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Chapter 05 - Estimating Project Times and Costs
6. "escribe the ideal approach for a project manager to develop optimal estimates for a projectDs time and costs. Allo) eno!gh time for both the top-do)n and bottom-!p estimates to be )or3ed o!t o !t and incl!ded in the final plan. 9. %dentif( and briefl( describe the five major methods of top-do)n estimating. 1. consens!s& $. ratio method& ,. apportion method& . f!nction point& and 5. learning c!rves . %dentif( and briefl( describe the fo!r major methods of bottom-!p estimating. 1. template method& $. parametric proced!re applied to specific tas3s& ,. detailed estimates from the 2; )or3 pac3ages& and . phase estimating
/. %dentif( the dra)bac3s to an excessive level of detail in project times and costs. 1. emphasis on departmental o!tcomes& and $. increased paper)or3 /0. %dentif( the three major categories of project costs and give an example of each. 1. "irect costs labor& materials& e'!ipment& otherF& $. Project 8verhead Costs salaries of project manager& rent on space to ho!se the projectF& and ,. #eneral and Administrative Administrative 8verhead Costs advertising& acco!nting& and senior management of the organiationF /1. GThe best )a( to improve estimates is to collect and archive data on past project estimates and act!als.G Agree or disagree and an d s!pport (o!r ans)er. an s)er. This techni'!e is rated as a Dbest practiceD among leading project management organiations. ;everal large firms have large estimating departments that have developed large time and cost databases.
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