177 Helpful Free Online PMP Exam Practice Questions On Planning The Project – Part 1

If you are worrying about your PMP exam and you want to pass the exam at this time, however, it is not easy to get the PMP certification because there are a lot of area which will be included in the examination namely initiating the project, planning the project, executing the project, monitoring and controlling the project and closing the project. Get further pmp information here. Thus, some people have failed at the first time, second one, even the third time, it is normal. To ensure that you have enough knowledge to pass your exam that you should have a good preparation before taking the exam. Here’s 177 Helpful Free Online PMP Exam Practice Questions On Planning The Project – Part 1 in which you can practice easily and remember deeply information included in your real exam. Let’s enjoy to discover project cost management on the domain II. Don’t forget to be continuous at part 2. Good luck!

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177 Helpful Free Online PMP Exam Practice Questions On Planning The Project - Page 1

(BAC - EV) / (BAC - AC)

Budget At Completion
TCPI Based on BAC: Equation
Estimate Costs Constraints
Accuracy of Cost Estimates

The type and quantity of resources and the amount of time which those resources are applied to complete the work of the project are major factors in determining the project cost. Schedule activity resources and their respective durations are used as key inputs to this process

Inputs to Estimate Costs
Three-Point Estimates Use in Estimate Costs
WBS Dictionary Use in Estimate Costs
Project Schedule Use in Estimate Costs

Planned Value

EVM
SPI Use
SPI < 1
PV

decreased duration and increased costs. This is reflected with CPI is less than 1 and SPI is greater than 1

Inputs of Control Costs
Accuracy of Cost Estimates
Performance Measurement Baseline
Crashing of a project results in

Planning Process Group

Estimate Costs Process Group
Life Cycle Costs
Estimate Costs Constraints
Actual Cost

The process of developing an approximation of the monetary resources needed to complete project activities

Cost Variance
Estimate Costs Constraints
Estimating Costs
SPI > 1

Indicates less work was completed than was planned

SPI > 1
BCR < 1
SPI Use
SPI < 1

• Level of accuracy• Units of measure• Organizational procedures links• Control thresholds• Rules of performance management• Reporting formats• Process descriptions

The cost management plan can establish
Management Reserves
Estimate Costs Constraints
TCPI Based on EAC: Equation

The formats and frequency for the various cost reports are defined

Determine Budget
Reporting Formats
Forecasting
Direct Costs

• Total funding requirements and periodic funding requirements (e.g., quarterly, annually) are derived from the cost baseline. • The cost baseline will include projected expenditures plus anticipated liabilities. • Funding often occurs in incremental amounts that are not continuous, which appear as steps• The total funds required are those included in the cost baseline, plus management reserves, if any

Determine Budget: Expert Judgement Sources
Determine Budget: Project Funding Requirements
Estimate Costs: Project Document Updates
Determine Budget: Organizational Process Assets

Earned Value Management

PV
SPI < 1
BCR > 1
EVM

• In this forecast, the ETC work will be performed at an efficiency rate that considers both the cost and schedule performance indices. • It assumes both a negative cost performance to date, and a requirement to meet a firm schedule commitment by the project. • This method is most useful when the project schedule is a factor impacting the ETC effort. • Variations of this method weigh the CPI and SPI at different values (e.g., 80/20, 50/50, or some other ratio) according to the project manager's judgment.

Recommendation when CPI > 1 and SPI < 1
EAC forecast for ETC (considering both SPI and CPI factors)
Cost of Quality (COQ) Use in Estimate Costs
Scope Statement Use in Estimate Costs

The calculated CV, SV, CPI, and SPI values for WBS components, in particular the work packages and control accounts, are documented and communicated to stakeholders

Control Costs: Organizational Process Assets
Control Costs: Budget Forecasts
Control Costs: Project Management Plan Updates
Control Costs: Work Performance Measurements

The work breakdown structure (WBS) provides the framework for the cost management plan, allowing for consistency with the estimates, budgets, and control of costs. The WBS component used for the project cost accounting is called the control account (CA). Each control account is assigned a unique code or account number(s) that links directly to the performing organization's accounting system.

Components of a Scope Baseline
Organizational Procedures Links
Performance Reviews
Contingency Reserves

Since SPI is less than 1, this means that project is behind schedule; hence it is recommended to crash the project to bring it on schedule. Please note that crashing may increase costs. Since your project has CPI greater than 1, cost will not be a concern

Performance Review: Trend Analysis
Cost Aggregation Use in Determine Budget
Recommendation when CPI > 1 and SPI < 1
Project cost control seeks out

A commonly used method of performancemeasurement. It integrates project scope, cost, and schedule measures to help the project managementteam assess and measure project performance and progress. It is a project management techniquethat requires the formation of an integrated baseline against which performance can be measured forthe duration of the project

Earned Value
Actual Cost
Earned Value Management
Bottum Up EAC Method

• Schedule Performance Index• Cost Performance Index

Work Performance Information Use in Control Costs
Efficiency Indicators monitored as part of Control Costs
Cost Management Plan Use in Control Costs
Inputs of Control Costs

means that benefits (i.e. expected revenue) is greater than the cost. Hence it is beneficial to do the project

SV
CPI > 1
TCPI
BCR > 1

means that benefits (i.e. expected revenue) is less than the cost. Hence it is not beneficial to do the project

TCPI
SPI Use
BCR < 1
SPI > 1

• This EAC method accepts the actual project performance to date (whether favorable or unfavorable) as represented by the actual costs, and predicts that all future ETC work will be accomplished at the budgeted rate. • When actual performance is unfavorable, the assumption that future performance will improve should be accepted only when supported by project risk analysis.

EAC forecast for ETC (work performed at the present CPI): Equation
EAC forecast for ETC (work performed at the present CPI)
Determine Budget: Cost Performance Baseline
EAC forecast for ETC (work performed at the budgeted rate)

Project staffing attributes, personnel rates, and related rewards/recognition are necessary components for developing the project cost estimates

Human Resource Plan Use in Estimate Costs
Resource Calendars Use in Determine Budget
Cost Management Plan Use in Control Costs
Cost of Quality (COQ) Use in Estimate Costs

EAC = BAC / cumulative CPI

Determine Budget: Cost Performance Baseline
EAC forecast for ETC (considering both SPI and CPI factors)
EAC forecast for ETC (work performed at the present CPI): Equation
Project Cost Performance

Number of years required for an organization to recapture an initial investment. Discount period is not taken into account in calculations for payback period

Payback Period
TCPI
CPI
PV

Indicates a cost overrun for work completed

BCR > 1
CPI < 1
SPI < 1
CPI

Descriptions of each of the three cost management processes are documented

Payback Period
Project Cost Management
Process Descriptions
Cost Baseline

• Planned value• Earned value• Actual cost

Cost Performance Index
TCPI Based on EAC
Process Descriptions
Three Key Dimensions of EVM

• method builds upon the actual costs and experience incurred for the work completed, and requires a new estimate to complete the remaining project work. • This method may be problematic in that it interferes with the conduct of project work. • The personnel who are performing the project work have to stop working to provide a detailed bottom-up ETC of the remaining work. • Typically there is no separate budget to perform the ETC, so additional costs are incurred for the project to conduct the ETC• The proj

TCPI Based on EAC
Budget At Completion
Bottum Up EAC Method
Actual Cost

1. Scope Baseline2. Project Schedule3. Human Resource Plan4. Risk Register5. Enterprise Environmental Factors6. Organizational Process Assets

Inputs of Control Costs
WBS Use in Estimate Costs
Control Costs
Inputs to Estimate Costs

the performance measurement baseline (PMB)

Determine Budget: Cost Performance Baseline
Project Management Software Use in Control Costs
In the earned value management technique, the cost performance baseline is referred to as
Tools and Techniques for Estimate Costs

The process of monitoring the status of the project to update the project budget and managing changes to the cost baseline

Control Costs
SV
Units of Measure
Planned Value

• Analogous cost estimating uses the values of parameters, such as scope, cost, budget, and duration or measures of scale such as size, weight, and complexity, from a previous, similar project as the basis for estimating the same parameter or measure for a current project. • When estimating costs, this technique relies on the actual cost of previous, similar projects as the basis for estimating the cost of the current project. • It is a gross value estimating approach, sometimes adjusted for known differenc

Expert Judgement Use in Estimate Costs
Analogous Estimating Use in Estimate Costs
Market Conditions Impact on Estimate Costs
Inputs to Estimate Costs

• Any historical relationships that result in parametric estimates or analogous estimates involve the use of project characteristics (parameters) to develop mathematical models to predict total project costs. • Such models can be simple (e.g., residential home construction is based on a certain cost per square foot of space) or complex (e.g., one model of software development costing uses multiple separate adjustment factors, each of which has numerous points within it)

Determine Budget: Expert Judgement Sources
Process Descriptions
Determine Budget: Cost Performance Baseline
Determine Budget: Historical Relationships

• If the cumulative CPI falls below the baseline plan, all future work of the project will need to immediately be performed in the range of the TCPI (BAC) to stay within the authorized BAC. • Whether this level of performance is achievable is a judgment call based on a number of considerations, including risks, schedule, and technical performance. • Once management acknowledges that the BAC is no longer attainable, the project manager will prepare a new estimate at completion (EAC) for the work, and once ap

TCPI Based on EAC
CPI < 1
Earned Value
Cost Estimates

This and related detailed statements of work provide an identification of the deliverables and a description of the work in each WBS component required to produce each deliverable

WBS Dictionary Use in Estimate Costs
Expert Judgement Use in Estimate Costs
Cost of Quality (COQ) Use in Estimate Costs
Bottom-up Estimating Use in Estimate Costs

Indicates that more work was completed than was planned

SPI > 1
CPI < 1
SPI < 1
TCPI

Includes the processes involved in estimating, budgeting, and controlling costs so that the project can be completed within the approved budget

Cost Variance
Project Cost Management
Project cost control includes
Activity Cost Estimate

Is a measure of progress achieved compared to progress planned on a project. It is sometimes used in conjunction with the cost performance index (CPI) to forecast the final project completion estimates. The SPI is equal to the ratio of the EV to the PV

Schedule Performance Index
Outputs of Determine Budget
Cost Variance indicates
Rules of Performance Measurement

The causes of positive and negative variances and is part of the Perform Integrated Change Control process

Characteristics of EV
Characteristics of Actual Cost
Project Selection: Life Cycle Costs
Project cost control seeks out

• Health• Safety• Security• Performance• Environmental• Insurance• Intellectual Property Rights• Licenses• Permits

Cost of Quality (COQ) Use in Estimate Costs
Examples of requirements with contractual and legal implications
Determine Budget: Historical Relationships
Recommendation when CPI > 1 and SPI < 1

Is the value of work performed expressed in terms of theapproved budget assigned to that work for an activity or work breakdown structure component. It is the authorized work that has been completed, plus the authorized budget for such completed work

Actual Cost
Direct Costs
Earned Value Management
Earned Value

Is a measure of the value of work completed compared to the actual cost or progress made on the project. It is considered the most critical EVM metric and measures the cost efficiency for the work completed. The CPI is equal to the ratio of the EV to the AC

Cost Performance Index
Determine Budget
Performance Reviews
Cost Estimates

Earned value management (EVM) rules of performance measurement are set. For example, the cost management plan could:• Define the WBS and points at which measurement of control accounts will be performed,• Establish the earned value measurement techniques (e.g., weighted milestones, fixed formula, percent complete, etc.) to be employed, and• Specify the earned value management computation equations for determining the project estimate at completion (EAC) forecasts and other tracking methodologies

Earned Value Management
Outputs of Determine Budget
Project Cost Performance
Rules of Performance Measurement

177 Helpful Free Online PMP Exam Practice Questions On Planning The Project – Part 1

177 Helpful Free Online PMP Exam Practice Questions On Planning The Project - Page 1

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