PMP Material

PMP
Preparation Training
Your key in Successful Project
Management
Akram Al-Najjar, PMP , PSP

Project Management Consultant
Who am I?
My name is Akram M. Alnajjar
Certified Project Management Professional (PMP) by PMI / USA
Planning and Schedule Professional PSP by AACE (The Association
for the Advance Cost Engineer international) /USA
Postgraduate Diploma for Construction Management by Ain Shams
BSC , Civil Engineering 1984
PM consultant and Shareholder for ITI and owner of Pmi House
Currently working as lecturer for Arab Academy , ITI, PMI Gulf
Chapters , Projacs international Company,
Previously worked as :
Project Control Manager for Eni Group /AGIP (Italian Oil and Gas
company) Port-Harcourt / Nigeria to July 2005
Senior Project Control Planner for Eni Group/AGIP Assaluyeh / Iran
Planning and Training Manager for Promastar Co. (Primavera
Authorized representative / Egypt and Saudi Arabia ) Responsible
for Primavera professional training courses and Primavera
consultation services.
Planning and Cost Control Manager for Bin-Jarallah Group / Riyadh
Planning and Cost Control Manager for Saudi Lada Group Riyadh
2
Question # 1: In a kick-off meeting for your project, you provided information to your team
members about the different process groups which will be followed during project
implementation. According to PMI, what are the project management process groups?
A. Conceptualizing, Initiating, Executing, Monitoring and Controlling, Closing

B. Initiating, Planning, Executing, Monitoring and Controlling, Closing
C. Initiating, Verifying, Executing, Monitoring and Controlling, Closing
D. Initiating, Planning, Executing, Controlling, Administrative Closure
Question # 2: A project manager wants to create a project plan. You tell him that the project
plan should include:
A. Project management methodology, project management information system, and expert

judgment
B. Deliverables, requested changes and implemented change requests
C. Project files and historical information
D. List of milestones, Cost and Schedule Baselines (how to monitor and control changes)
Question # 3: You are explaining the importance of Work Breakdown Structure (WBS) to
your project team members. In this context, all the following statements about Work
Breakdown Structure (WBS) are correct EXCEPT:
A. It is a hierarchical decomposition of work

B. Planned work contained in the lowest level WBS components are also called WBS
dictionaries
C. WBS subdivides the project work into smaller, more manageable pieces of work
D. WBS organizes and defines the total scope of work of the project
Question # 4 : Please refer to the diagram given below: (all units are in days)
What is the project float if management wants to do this project within ten days?
A. 0 days
B. - 4 days
C. 2 days
D. Cannot be determined because information in the question is inconsistent
3
Question # 5: In your project, you have reason to believe that the current variances
occurred because of extraneous factors, and you do not expect similar variances to
happen in the future. What should be the Estimate at Complete for your project?
* BAC = $ 300,000
* AC = $ 100,000
* EV = $ 150,000
* CPI = $ 1.5
A. $ 250,000
B. $ 220,000
C. $ 280,000
D. $ 200,000
Question # 6 : According to the 80/20 rule, 80 percent of the problems are because of
20 percent of the causes. To facilitate finding out which are the most probable
defects, and to evaluate nonconformities, you do a rank ordering of the defects
using:
A. Statistical Sampling
B. Control Chart
C. Pareto Diagrams
D. Inspection
Question # 7 : To get the work done, the supervisor threatens punishment and
carefully supervises the work. The supervisor believes in:
A. Theory Y (McGregor Model)

B. Theory X (McGregor Model)
C. Maslow`s hierarchy of needs
D. Referent power
Question # 8: As a project manager, you examine project results to determine how

the project is performing over time. This can be done through:
A. Performance Reviews
B. Variance Analysis
C. Trend Analysis
D. Earned Value Analysis
Question # 9: As a project manager, you are concerned with determining which

risks might impact the project - this is done as a part of:
A. Risk Management Planning

B. Risk Identification
C. Qualitative Risk Analysis
D. Risk Response Planning
Question # 10: Since the buyer could not meet the requirements of the contract, you
(the seller) want to terminate the contract early. This should be done as part of:
A. Procurement Planning
B. Contract Administration
C. Contract Closure
D. Administrative Closure
4
Who are you? Please introduce
yourself!
Your name
Your company name and your job
title
Why do you attend this course?
Tell us your expectations
anajjar@pmihouse.org
Source: pmbok guide 2004 +20105394312
PMP® Certification Program

Certification Requirements:
Educational and Experiential: eligibility criteria
Knowledge and understanding of Project Management:
examination
Two eligibility categories:

Category 1: at the time of application, the candidate holds
a baccalaureate or global equivalent university degree
Category 2: at the time of application, the candidate does
not hold a baccalaureate or global equivalent university
degree, but holds a high school diploma or equivalent
secondary school credential anajjar@pmihouse.org
5
Category 1 eligibility criteria &
requirements:
EDUCATIONAL:
at the time of application, the candidate holds a
baccalaureate or global equivalent university degree
minimum 35 contact hours of project management
education (no time frame associated with this requirement)
EXPERIENTIAL:
Minimum 4,500 hours of Project Management experience,
covering the five project management process groups
At least 3 years (36 non-overlapping, unique months) of
project management experience, within the 6-year period
prior to the application
Category 2 eligibility criteria &

requirements:
EDUCATIONAL:
at the time of application, the candidate holds a high school
diploma or equivalent secondary school credential
minimum 35 contact hours of project management
education (no time frame associated with this requirement)
EXPERIENTIAL:
Minimum 7,500 hours of Project Management experience,
covering the five project management process groups
At least 5 years (60 non-overlapping, unique months) of
project management experience, within the 8-year period
prior to the application
6
Required supporting
documentation!
Educational Background: Diploma
Experience Verification Form, provided by PMI
Provide contact data for all references
PMI may check the references directly!
35 Contact Hours of Project Management
Certificate of Attendance
Exam Fees
For members of PMI:
Initial fee: $405.00
Re-examination fee: $275.00
For non-members of PMI:

Initial fee: $555.00
Re-examination fee: $375.00
Annual PMI membership fee: $119.00

One-time fee: $ 10.00
PMI Local Chapter Fee: $ 20.00
7
PMP® Exam Overview
Computer-based
Language: English
200 four option, multiple-choice questions, covering the nine

PM knowledge areas within the five PM process groups
(Initiation, Planning, Executing, Controlling & Monitoring and
Closing) + Professional Responsibility
25 questions are not scored (used for benchmarking the test)
Duration: 240 minutes. The exam will be scored when you are
ready or the time is up
Passing score: min. 61% (106 of 175 correct answers)
Passing score may be changed by PMI! anajjar@pmihouse.org

Exam structure
PM Process Number of Percentage
questions
Initiation 20 11.42
Planning 40 22.85
Executing 48 27.42
Monitoring & 37 21.14
Controlling
Closing 15 8.57
Professional and 15 8.57
Social
Responsibility
Total 175 100%
8
The Project Management Framework
Chapter 1
Introduction
Introduction
1.1 Purpose of this PMBOK® Guide

1.2 What is a Project?
1.3 What is Project Management?
1.4 The PMBOK® Guide Structure
1.5 Areas of Expertise
1.6 Project Management Context
9
Purpose of this PMBOK® Guide
The primary purpose of the PMBOK®

Guide is to identify that Subset of the
Project Management Body of Knowledge
that is generally recognized as good
practice.
Provides common terminology
Purpose of this PMBOK® Guide

Audience for the PMBOK® Guide
• Senior executives
• Program managers and managers of project managers
• Project managers and other project team members
• Members of a project management office
• Customers and other stakeholders
• Functional managers with employees assigned to project
teams
• Educators teaching project management and related
subjects
• Consultants and other specialists in project management
and related fields
• Trainers developing project management educational
programs
• Researchers analyzing project management.
10
What is a Project
A project is a temporary endeavor
undertaken to create a unique
product or service, or result.
•Temporary Has a definite beginning and end, not an

on-going effort.
Ceases when objectives have been attained.
Team disbanded upon completion.
•Unique The product or service is different in
some way from other products or services.
Product characteristics are progressively
elaborated.
Progressively Elaborated
Proceeding in steps, continuing in

increments
Worked out with care and detail,
developed thoroughly
The scope of the project - the work to
be done - should remain constant even
as details are progressively elaborated
11
What is a Project
Similarities with Operations:

Performed by people
Constrained by limited resource
Planned, executed and controlled
Differences from Operations:
Operations are on-going; projects
temporary
Operations repetitive; Projects unique
What Are Projects in Your Company ?

Exercise #1
Based on the criteria of a project, identify
and record 3 projects from your group that
you are doing in your organizations.
For each project record the following:

What is the Project Objective?
What is unique on this project?
What are some of the tasks?
What resources does it use?
12
Samples of IT Projects
Northwest Airlines developed a new

reservation system
Many organizations upgrade hardware,
software, and networks via projects
Organizations develop new software or
enhance existing systems to perform many
business functions
Note: “IT projects” refers to projects involving
hardware, software, and networks
Samples of Non-IT Projects
Constructing a new building

Developing a new product
Performing a major research study
Planning / holding a major event like a
wedding
Note: Try to think of projects that involve
several people with different backgrounds
13
Projects and Strategic Planning
Projects are typically authorized as a result of one or
more of the following strategic considerations:
A market demand (e.g., an oil company authorizes a
project to build a new refinery in response to chronic
gasoline shortages)
An organizational need (e.g., a training company
authorizes a project to create a new course in order to
increase its revenues)
A customer request (e.g., an electric utility authorizes a
project to build a new substation to serve a new industrial
park)
A technological advance (e.g., a software firm authorizes a
new project to develop a new generation of video games
after the introduction of new game-playing equipment by
electronics firms)
A legal requirement (e.g., a paint manufacturer authorizes
a project to establish guidelines for the handling of a new
toxic material).
What is Project Management

The application of knowledge, skills, tools, and
techniques to project activities to meet project
requirements
Project Managem
ent
Stakeholders Individuals and organizations involved in or

affected by the project activities
14
What is Project Management
Managing a project includes:
• Identifying requirements
• Establishing clear and achievable objectives
• Balancing the competing demands for quality,
scope, time and cost “triple constraint”
• Adapting the specifications, plans, and
approach to the different concerns and
expectations of the various stakeholders.
•Management by projects.
Project Dynamics:
The Triple Constraints
Scope Time
Quality
Cost
15
The PMBOK® Guide
PMBOK® Document has three sections:
Project Management Framework
Chapters 1Introduction, Chapters 2 Project Life
Cycle and Organization,
The Standard for Project Management of

a Project , Chapter 3, Project Management
Processes for a Project,
Project Management Knowledge Areas

Chapters 4 through 12
Project Management Processes

Monitoring, measuring, and
taking corrective action
Approach to
executing project
Commitment to
executing project
Formal product
Coordinating acceptance and
people and end of project
other resources
16
Project Integration Management
Scope Management
Time Management
Cost Management
Quality Management
Human Resource Management
Communications Management
Risk Management
Procurement Management
17
Areas of Expertise
18
Areas of Expertise
The Project Management Body of

Knowledge
Application area knowledge, standards, and
regulations
Understanding the project environment
General management knowledge and skills
Interpersonal skills.
Application Area Knowledge,

Standards and Regulations
Application areas are categories of projects that have
common elements significant in such projects, but
are not needed or present in all projects. Application
areas are usually defined in terms of:
Functional departments and supporting disciplines, such as legal,

production and inventory management, marketing, logistics, and
personnel.
Technical elements, such as software development or engineering,
and sometimes a specific kind of engineering, such as water and
sanitation engineering or construction engineering.
Management specializations, such as government contracting,
community development, and new product development.
Industry groups, such as automotive, chemical, agriculture, and
financial services.
19
Understanding the Project
Environment
Virtually all projects are planned and implemented in a
social, economic, and environmental context, and have
intended and unintended positive and/or negative impacts.
The project team should consider the project in its cultural,
social, international, political, and physical environmental
contexts.
Cultural and social environment.
International and political environment.
Physical environment.
General Management Knowledge and

Skills
Financial management and accounting

Purchasing and procurement
Sales and marketing
Contracts and commercial law
Manufacturing and distribution
Logistics and supply chain
Strategic planning, tactical planning, and operational planning
Organizational structures, organizational behavior, personnel
administration compensation, benefits, and career paths
Health and safety practices
Information technology.
20
Interpersonal Skills
Effective communication. The exchange of information
Influencing the organization. The ability to “get things

done”
Leadership. Developing a vision and strategy, and
motivating people to achieve that vision and strategy
Motivation. Energizing people to achieve high levels of
performance and to overcome barriers to change
Negotiation and conflict management. Conferring with
others to come to terms with them or to reach an
agreement
Problem solving. The combination of problem definition,
alternatives identification and analysis, and decision-
making.

A program is a group of related
projects managed in a coordinated way
to obtain benefits and control not
available from managing them
individually.
Publishing a newspaper or magazine is also a
program with each individual issue managed
as a project. This is an example of where
general operations can become
“management by projects”
21
Subprojects – Components of a
project that are often contracted out
Portfolios - A portfolio is a collection
of projects or programs and other work
that are grouped together to facilitate
effective management of that work to
meet strategic business objectives.
Project Management Office
A project management office (PMO) is an

organizational unit to centralize and
coordinate the management of projects
under its domain.
PMO Can operate on a continuum, from
providing project management support
functions in the form of training, software,
standardized policies, and procedures, to
actual direct management and responsibility
for achieving the project objectives.
22
Any questions?
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Project Life Cycle and Organization
Chapter 2
AGENDA
The Project Life Cycle

Project Stakeholders
Organizational Influences
Discussion
25
Life Cycle
Project Lifecycle: Describes what you need
to do, to do the work of the project.
Project Management Process group :

Describes what you need to do, to manage the
project. It follows PMI’s Process groups:
Initiating
Planning
Executing
Controlling
Closing

Approach to
executing project
Commitment to
executing project
Formal product
other resources
26
Project Life Cycle
Defines the beginning and end of the project
Divides the project into phases that provide

better management control and the
appropriate links to the ongoing operations
of the organization
Characteristics of Life Cycle (cont.)
Cost and staffing levels are low at the

start, higher towards the end, and drop
as project closes
Probability of project success is low at
the start of the project and gets
progressively higher as the project
continues
Cost of changes and of error correction
generally increases as the project
continues
27
Phases and Resources Usage
Implement
Cost and Development

Staffing
Level Close Out
Concept
Time -Æ
Concept 5%
Development 20%
Implement 60%
Close Out 15%
28
Project Life Cycle and Product Life
Cycle Relationships
Project Stakeholders
Individuals and organizations who

are actively involved in the project
and whose interests may be
positively or negatively affected by
the project success or failure
Key Stakeholders
• Project manager Manages the project
• Customer Uses the product or service
• Performing organization Enterprise that does the project work
• Sponsor
• P.M.O
29
Project Sponsor
Who is the project sponsor ?
Executive
Senior Manager
External client
Project Sponsor
Role
Sets project objectives

Sets project priorities
Creates project organizational structure
Establishes project policies and procedures
Provides resources
Approves project management plan
Approves changes to project management plan
30
Roles and Responsibilities
Project Sponsor Project Manager
Represents the owner on Establishes WHAT, WHO,
the project WHEN, WHERE, HOW
Provides the requirements Defines scope of work
Provides high level project based on project
goals requirements
Provides corporate Plans, organizes, and

policies manages the work
Reports on progress to Monitors progress and

owner controls the project
Provides project approvals Communicates, directs

and approves changes to Meets stakeholder needs
the project and requirements
Selects the PM Solves problems
Provides funds anajjar@pmihouse.org
Who is the Project Sponsor ?
Exercise #2
In each group, discuss and record
who are project sponsors in your work
environment.
31
Who are the Project Stakeholders
Exercise #3
You are a project manager on a new

project, in each of your teams
discuss and record who are the
project stakeholders.
Stakeholders and the Project
32
Organizational Cultures & Styles
Reflected in norms, beliefs, and

expectations
Reflected in policies and procedures,
view of authority relationships, etc.
Direct influences the project
Organizational Structure
Functional organization – Hierarchy

where each employee has one clear
superior
Projectized organization – Most of
organization’s resources are involved in
project work and report to the project
manager
Matrix organization – Blend of both
33
Organizational Planning
Functional Organization
Projectized Organization
34
Matrix Organization
Matrix Organization
35
Matrix Organization
Table 2-1. Organizational Structure Influences on Projects
36
Who is the Project Sponsor ?
Exercise #4
In each group, discuss and record
Which type of organization structure
you have in your work environment.
Any questions?
37
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Project Management Process Groups
Knowledge Area Processes Initiating Planning Executing Monitoring & Controlling Closing
Develop project Direct and manage Monitor and control project Close
Develop project charter
management plan project execution work project
Project Integration Mangement Develop preliminary project
Integrated change control
scope statement
Scope planning Scope verification
Project Scope Management Scope definition Scope control
Create WBS
Activity definition Schedule control
Activity sequencing
Acitivity resource
estimating
Project Time Management
Activity duration
estimating
Schedule
development
Cost estimating Cost control
Project Cost Management
Cost budgeting
Perform quality
Project Quality Management Quality planning assurance Perform quality control
Human resource
Project Human Resource Management planning Acquire project team Manage project team
Develop project team
Communications
Project Communications Management planning Information distribution Performance reporting
Stakeholders
Risk management
planning Risk monitoring and control
Risk identification
Qualitative risk
Project Risk Management factors
Quantitative risk
analysis
Risk response
planning
Plan purchase and Request seller Contract
Project Procurement Management acquisitions response Contract administration closure
Plan contracting Select sellers
39
40 anajjar@pmihouse.org
Initiation Process
PLANNING PROCESS GROUP
Develop
Project
Charter
EXECUTING PROCESS GROUP
Develop
Preliminary
Project
Scope
Statement MONITORING & CONTROLLING
PROCESS GROUP
Planning Process
MONITORING
& CONTROLLING
PROCESS
GROUP
Develop Scope Planning Scope Definition

Project
Activity Definition
Management
INITIATION
PROCESS Plan
Create WBS Activity Resource Estimating
GROUP
Activity Duration
Estimating
Cost Estimating
Risk
Management
Planning
Cost Budgeting Activity Sequencing
Risk
Identification H R Planning Schedule Development
EXECUTING
PROCESS
Qualitative Quality Planning GROUP
Risk
Analysis
Communication
Planning
Plan
Quantitative
Purchases
Risk
And
Analysis Plan Contracting CLOSING
Acquisitions PROCESS
GROUP
Risk Response Planning
Execution process
MONITORING
INITIATION Perform & CONTROLLING
PROCESS Quality Assurance PROCESS
GROUP GROUP
Acquire
Project Team
Direct and
Manage
Project
Execution
Develop Information
Project Team Distribution
CLOSING
PLANNING PROCESS
PROCESS Request Select
GROUP
GROUP Sellers Responses Sellers
Control Process
Scope Verification
INITIATION
PROCESS
GROUP Scope Control
Monitor
Schedule Control
And Control
Project
Work Cost Control
PLANNING Perform Quality Control

PROCESS CLOSING
GROUP PROCESS
Manage Project team GROUP
Integrated
Perform Reporting
Change
Control
Manage Stakeholders
EXECUTING
PROCESS
Risk Monitoring and Control
GROUP
Contract Administration
Close Process
PLANNING
PROCESS
GROUP
Close
Project
EXECUTING
PROCESS
GROUP
Contract
Closure
MONITORING & CONTROLLING

PROCESS
GROUP
scope statement
Create WBS
Activity sequencing
Acitivity resource
estimating
Activity duration
estimating
Schedule
development
Cost budgeting
Perform quality
Human resource
Communications
Stakeholders
Risk management
Risk identification
Qualitative risk
Quantitative risk
analysis
Risk response
planning
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50
PMP
Management

AGENDA
Initiating Process Group
Develop Project Charter
Develop Preliminary Scope Statement
Scope Management Processes
What is Scope Management?
How does the PMBoK® Guide describe Scope
Management?
Discussion
+20105394312
Source: pmbok guide 2004
51
Approach to
executing project
Commitment to
executing project
Formal product
other resources anajjar@pmihouse.org
+20105394312
+20105394312
52
Develop
Project
Charter
Develop
Preliminary
Project
Scope
PROCESS GROUP
+20105394312

scope statement
Create WBS
Activity sequencing
Acitivity resource
estimating
Activity duration
estimating
Schedule
development
Cost budgeting
Perform quality
Human resource
Communications
Stakeholders
Risk management
Risk identification
Qualitative risk
Quantitative risk
analysis
Risk response
planning
53
Project is initiated as result of one of

the following:
A market demand.
A business need.
A customer request.
A technological advance.
A legal requirement.
A social need.
+20105394312
Scope Planning
Inputs
Project Charter
The document that formally authorized a project, and
address the following information:
Requirements that satisfy stakeholder needs, wants,

and expectation.
Business need, high level product description, or

product requirements.
Project purpose and justification.
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54
Scope Planning
Inputs
Assigned project manager and authority level.
Summary milestone schedule.
Stakeholders influence.
Organizational, environmental & external assumptions.
Organizational, environmental & external constraints.
Business case justification the project, including return
on investment.
Summary budget.
+20105394312
Tools & Techniques

1. Project selection methods
Inputs 2. Project Management methodology
1. Contract (when applicable) 3. Project Management Information
2. Project statement of work System (PMIS)
3. Enterprise environmental 4. Expert judgment
factors
4. Organizational process
assets
Outputs
1. Project charter
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55
Develop Project Charter Inputs
Enterprise Environmental Factors
Organizational or Company culture and structure
Governmental or industry standards (Regulatory agency, regulations Product,

standards , Quality standards Workmanship standards )
Infrastructure (facilities & capital equipment)
Existing Human Resources , Personal administration
Company work authorization system , Market place conditions
Stakeholders risk tolerance , Commercial databases
Project Management information system (PMIS)

+20105394312
Develop Project Charter Inputs
Organizational Process assets– They are the formal and informal

policies, procedures, and guidelines that could impact how the
project’s scope is managed. Those of particular interest to scope
planning are:
Organizational policies as they pertain to scope planning and
management
Organizational procedures related to scope planning and
management
Historical information about previous projects, which should be
considered during scope planning. Information may be located in
prior projects’ lesson learned project archives
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56
Develop Project Charter Tools &
Techniques
Project Selection Methods

• Benefit measurement methods: that are Comparative
approaches, scoring models, benefit contribution or economic
models.
• Mathematical models: that use linear, nonlinear, dynamic,
integer, or multi objective programming algorithms.
+20105394312
Present Value
¾Budgeting technique that debates the future

value of money based on inflation, etc.
¾PV = FV
(1 + r)t
FV = amount of money t years from now
r = interest rate (also called “discount rate”)
t = time period
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57
Present Value
Year FV PV
0 $50,000 $50,000
1 $35,000 $31,819
2 $15,000 $12,397
Assume a 10% interest (or discount) rate
PV (Year 1) = FV / (1 + r)t
=$35,000/(1 + 0.1)1
= $31,819
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(NPV) Net Present value

This Means the total benefits (income or revenue) less the cost. To
calculate NPV you need to calculate the present value of each of
the income and revenue figures then add up the present values.
Time Income or Present Value at Present Value at
Costs
Period revenue 10% interest rate 10% interest rate
0 0 0 200 200
1 50 45 100 91
2 100 83 0 0
3 300 225 0 0
Total 353 291
NPV =353-291=62 anajjar@pmihouse.org

+20105394312
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Net Present Value (NPV).
A method of
ranking
investment
proposals using
the NPV, which
is equal to the
present value
of future net
cash flows,
discounted at
the marginal
cost of capital.
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Payback Period
The exact length of time needed to recover an initial
investment as calculated from cash inflows.
Month Costs Total Cost Benefits Total Benefits
1 $5000 $5000 $0 $0
2 $5000 $10000 $0 $0
3 $8000 $18000 $0 $0
4 $5000 $23000 $5000 $5000
5 $2000 $25000 $10000 $15000
6 $0 $25000 $10000 $25000
7 $0 $25000 $10000 $35000
PAYBACK PERIOD is 6 MONTHS anajjar@pmihouse.org
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59
Internal Rate Of Return (IRR)
¾The interest (discount) rate where the present

value of the benefits exactly equals the costs.
¾The higher the rate, the better the project.
¾An IRR of .15 means that you expect the
project to return an average of 15% on your
investment over a given time period (usually a
number of years).
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Internal Rate of Return (IRR).

A method of ranking
investment
proposals using the
rate of return on an
investment,
calculated by
finding the discount
rate that equates
the present value of
future cash inflows
to the project’s
cost.
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Benefit Cost Ratio (BCR)
¾Compares the cost to the benefits of different projects. A
BCR of > 1 means the benefits are grater than the costs. A BCR
of < 1 means the costs are grater than the benefits. A BCR =1
means the costs and benefits are the same.
¾If the BCR of project A is 2.3 and BCR of project B is 1.7
which project would you select?
¾The answer is A. the project with the higher BCR
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Exercise Accounting Standards

Project A Project B Which you
Pick?
Net present V $95.00 $75.00 A
IRR 13% 17% B
Payback Period 21 Month 16 Month B
Benefit Cost Ratio 2.79 1.3 A
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Project Charter
Exercise #1
You are the project manager on the

case study project. As a team,
create a project Charter.
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Scope Planning
Inputs
Assigned project manager and authority level.
Summary milestone schedule.
Stakeholders influence.
Organizational, environmental & external assumptions.
Organizational, environmental & external constraints.
Business case justification the project, including return
on investment.
Summary budget.
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Sample Project Charter
Project Title: Information Technology (IT) Upgrade Project
Project Start Date: March 4, 2002 Projected Finish Date: December 4, 2002
Project Manager: Kim Nguyen, 691-2784, knguyen@abc.com
Project Justification: Upgrade hardware and software for all employees (approximately 2,000)
within 9 months based on new corporate standards. See attached sheet describing the new
standards. Upgrades may affect servers and midrange computers as well as network hardware and
software.
Budgeted $1,000,000 for hardware and software costs and $500,000 for labor costs.
Approach:
• Update the IT inventory database to determine upgrade needs
• Develop detailed cost estimate for project and report to CIO
• Issue a request for quotes to obtain hardware and software
• Use internal staff as much as possible to do the planning, analysis, and installation
Microsoft Word
Document
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Sample Project Charter

Roles and Responsibilities:
Name Role Responsibility
Walter Schmidt, CEO Project Sponsor Monitor project
Mike Zwack CIO Monitor project, provide
staff
Kim Nguyen Project Manager Plan and execute project
Jeff Johnson Director of IT Operations Mentor Kim
Nancy Reynolds VP, Human Resources Provide staff, issue memo
to all employees about
project
Steve McCann Director of Purchasing Assist in purchasing
hardware and software
Sign-off: (Signatures of all above stakeholders)
Comments: (Handwritten comments from above stakeholders, if applicable)
Microsoft Word
Document
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Develop Preliminary Project Scope
Statement
Inputs Tools & Techniques

1. Project charter
1. Project Management methodology
2. Project statement of work
2. Project Management Information
3. Enterprise environmental
System (PMIS)
factors
3. Expert judgment
assets
Outputs
1. Preliminary Project Scope Statement
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Statement
Preliminary project scope statement

The project scope statement:
Is the definition of the project- What needs to be accomplished.
Addresses and documents the characteristics and boundaries of
the project and its associated products and services, as well as
the method of acceptance and scope control, it includes:
• Project and product objectives
• Product or service requirements and characteristics.
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Statement
• Product acceptance criteria.
• Project boundaries.
• Project requirements and deliverables.
• Project constraints.
• Project assumptions.
• Initial project organization.
• Initial defined risk.
• Schedule milestones.
• Initial WBS.
• Order of magnitude cost budget.
• Project configuration management requirements.
• Approval requirements.
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Develop
Project
Charter
Develop
Preliminary
Project
Scope
PROCESS GROUP
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66
Chapter 5
Project
Scope Management
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scope statement
Create WBS
Activity sequencing
Acitivity resource
estimating
Activity duration
estimating
Schedule
development
Cost budgeting
Perform quality
Human resource
Communications
Stakeholders
Risk management
Risk identification
Qualitative risk
Quantitative risk
analysis
Risk response
planning
67
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68
Project Scope Management
Processes required to ensure that the project
includes all the work required, and only the work
required, to complete the project successfully.
Scope Planning
Scope Definition
Create WBS
Scope Verification
Scope Control anajjar@pmihouse.org
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Preventing extra work or gold plating.

You should give the customer what
they asked for, no more and no less.
Giving any extras is a waste of time
and adds no benefit to the project. !
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Scope Planning
The project management team documents
decisions in the scope management plan.
The scope management plan is a planning

tool describing how the team will define develop :
1. The detailed scope statement.
2. Work breakdown structure.
3. Verify the scope.
4. Control the scope.
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Scope Planning “continues”
Tools & Techniques

1. Expert Judgment
2. Templates, Forms,
and Standards
Inputs
1. Enterprise Environmental Outputs
Factors 1. Scope
2. Organizational Process Assets Management
3. Project Charter Plan
4. Preliminary Project Scope
Statement
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Scope Planning
Inputs
1. Enterprise Environmental Factors

Organization’s culture and structure
Infrastructure (facilities & capital equipment)
Tools
Existing Human Resources
Personnel policies.
Marketplace conditions
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Scope Planning
Inputs
2. Organizational Process assets– They are the formal and informal

policies, procedures, and guidelines that could impact how the
project’s scope is managed. Those of particular interest to scope
planning are:
Organizational policies as they pertain to scope planning and
management
Organizational procedures related to scope planning and
management
Historical information about previous projects, which should be
considered during scope planning. Information may be located in
prior projects’ lesson learned project archives
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Scope Planning
Inputs
4. Preliminary project scope statement

The project scope statement:
Is the definition of the project- What needs to be accomplished.
Addresses and documents the characteristics and boundaries of
the project and its associated products and services, as well as
the method of acceptance and scope control, it includes:
• Project and product objectives
• Product or service requirements and characteristics.
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Scope Planning
Inputs
• Product acceptance criteria.
• Project boundaries.
• Project requirements and deliverables.
• Project constraints.
• Project assumptions.
• Initial project organization.
• Initial defined risk.
• Schedule milestones.
• Initial WBS.
• Order of magnitude cost budget.
• Project configuration management requirements.
• Approval requirements.
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Scope Planning
Inputs
5. Project Management Plan

Define how the project is executed, monitored, controlled and
closed.
Document the collection of outputs of the planning processes
of the planning processes groups, its includes:
• Project management processes selected by the project
management team.
• The level of implementation of each process.
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Scope Planning
Tools & Techniques
Expert Judgment: Expert judgment is used

in developing detailed scope statements,
work breakdown structures, and scope
management plans.
Templates, Forms, and Standards: They
include work breakdown structure templates,
change control forms, and scope change
control forms
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Scope Planning
Outputs
Scope Management Plan: It provides guidance on how project
scope will be defined, documented, verified, managed by the
project management team. The components of a scope
management plan include:
A process to describe the preparation of a detailed scope
statement based upon the preliminary project scope statement
A process that enables the creation of the WBS from the detailed
project scope statement
A process that specifies how formal verification or acceptance of
the completed project deliverables and its companion WBS will be
obtained.
A process to control how requests for changes to the detailed
project scope statement will be processed. This process is directly
linked to integrated change control.
The scope management plan can be informal and broadly framed,
or formal and highly detailed, based on the needs of the project
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Scope Definition
The preparation of a detailed project scope

statement build upon the major
deliverables, assumptions, and constraints
that are documented in the preliminary
project scope statement during initiation,
and is critical to project success
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Scope Definition “continue”
Tools & Techniques

1. Product Analysis
2. Alternatives Identification
3. Expert Judgment
4. Stakeholders Analysis
Outputs
Inputs 1. Project Scope
1. Project charter Statement (detailed)
2. Project Scope management Plan 2. Requested change
3. Preliminary Project Scope Statement 3. Scope Management
4. Organizational process Assets Plan (updates)
5. Approved Change Requests anajjar@pmihouse.org
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Inputs
1. Project Charter: If charters or preliminary scope
statements are not used in a performing organization,
comparable information needs to be acquired or
developed and then used to develop the detailed project
scope statement

3. Project Scope Management Plan
4. Organizational Process Assets
5. Approved Change Requests: They can trigger a
change to project quality, scope, cost or schedule.
Change requests are often identified while the work of the
project is ongoing, and can occur in many forms: oral or
written, direct or indirect, externally or internally, legally
or contractually mandated, or optional
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Tools & Techniques
1. Product analysis: Techniques to develop a better
understanding of the product (e.g., systems engineering, value
engineering, function analysis, quality function deployment)
2. Alternative Identification: It is a technique used to
generate different approaches to the work of the project. A
variety of general management techniques are often used here,
the most common of which is brainstorming.
3. Expert judgment
4. Stakeholders Analysis
• Identification the influence and interest of the various
stakeholders and document their needs, wants, and
expectations
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Output
Project Scope Statement (Detailed): It
describes, in detail,
The project’s deliverables and the work required to
create those deliverables.
Provides a common understanding among all
stakeholders,
Describes the project’s major objectives, enables the
team to perform more detailed planning,
Guides the team’s work during execution, and
provides the baseline for evaluating whether client
requests for changes or additional work fall within or
outside the project’s boundaries.
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Output
The detailed scope statement includes, either
directly or by reference to other documents:
Project and Scope objectives
Project Scope Description
Project Boundaries
Project Deliverables
Product acceptance criteria
Project Constraints
Project assumptions
Initial Project Organization
Initial Defined risks
Schedule milestones
Order of Magnitude Cost Estimate
Project Configuration management requirements
Approval Requirements
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Output
Scope Management Plan (Updates): The Scope
management plan should be updated to include
Changes to the scope management plan that result
from changes to the scope definition process.
Requested changes (additions, modification,
revisions) to the project management plan and its
subsidiary plans are processed through integrated
change control
• Requested changes
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Create The Work Breakdown
Structure
A work breakdown structure (WBS) is an
outcome-oriented analysis of the work involved in
a project that defines the total scope of the project
It is a foundation document in project management
because it provides the basis for planning and
managing project schedules, costs, and changes
You need a WBS to create a Gantt chart, do critical
path analysis, and to use earned value analysis
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Create WBS “continue”
Tools
1. WBS templates
2. Decomposition
Outputs
1. Project Scope
Inputs Statement (updated)
1. Organizational Process Assets 2. Work breakdown
2. Project Scope statement “detailed” structure
3. Scope Management Plan 3. WBS dictionaries
4. Approved change requests 4. Scope Baseline
5. Project Scope
Management Plan
“updates”
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Source: pmbok guide 2004 6. Requested Changes
78
Create WBS
Inputs
1. Project Scope Statement (Detailed)
3. Project Scope Management Plan
4. Approved change requests
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Create WBS
Tools & Techniques

WBS Templates – Use a WBS from a previous project
or a standard template to develop a WBS for this
project
Decomposition – Subdividing major project
deliverables into smaller, more manageable
components until the deliverables are defined to the
work package level.
The work package level is the point at which cost and
schedule can be reliably estimated, and will support
managing activities throughout the project life cycle
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Create WBS
Outputs
Work Breakdown Structure and Dictionary: For
each WBS element, the WBS dictionary includes a statement of
work, a list of associated activities, and a list of milestones.
Other information can include the responsible organization, start
and end dates, resources required, an estimate of cost, charge
number, contract information, quality requirements, and
technical references to facilitate performance of work. Each WBS
element should be cross-referenced, as appropriate, to other
WBS elements in the WBS dictionary.
Scope Baseline : Approved Scope statement , WBS and

WBS dictionary are the scope baseline anajjar@pmihouse.org
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WBS Definition
Deliverable oriented grouping of
project elements that
organizes and defines the total
scope of the project
Hardware Services Data
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Create WBS
WBS Levels Example

The Top Level of the WBS is Project Title.
The First Level is most commonly the same as the
Project Phases.
The Second & Later levels break the project into
smaller pieces.
The Lowest Level that the project manager will
manage the project to, is called the Work Package.
This Work may be broken down again by the person or
persons completing the work.
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Sample WBS
Project
Phase 1 Phase 2 Deliverable 3 Subproject 4 Subproject n
2.1
2.1.1 2.1.2 2.1.3
2.1.3.1
2.1.3.1 2.1.3.2
2.1.3.1.1
2.1.3.1.2
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Sample of WBS in IT Projects
Table 4-3. Intranet WBS in Tabular Form
1.0 Concept
1.1 Evaluate current systems
1.2 Define Requirements
1.2.1 Define user requirements
1.2.2 Define content requirements
1.2.3 Define system requirements
1.2.4 Define server owner requirements
1.3 Define specific functionality
1.4 Define risks and risk management approach
1.5 Develop project plan
1.6 Brief web development team
2.0 Web Site Design
3.0 Web Site Development
4.0 Roll Out
5.0 Support
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Figure 4-6a. Sample Intranet WBS

Organized by Product
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82
Figure 4-6b. Sample Intranet WBS
Organized by Phase
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Figure 4-7. Intranet WBS and Gantt Chart in Microsoft Project
WBS Gantt Chart
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Figure 4-8. Intranet WBS and Gantt Chart Organized by PM Process Groups
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Typical WBS
Information
System
1.
Project Systems Hardware Software Facilities Training

Management Engineering Acquisition Development Modifications Development
1.1 1.2 1.3 1.4 1.5 1.6
Project Product CPU Operating Facility Training

Planning Design Acquisition System Plans Plans
1.1.1 1.2.1 1.3.1 1.4.1 1.5.1 1.6.1
Project Systems Auxiliary Database Facility Training

Control Integration Equipment 1.4.2 Modification Courses
1.1.2 1.2.2 1.3.2 1.5.2 1.6.2
Project Test & Printer Application Facility

Data Evaluation Acquisition Development Installation
1.1.3 1.2.3 1.3.3 1.4.3 1.5.3
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Work Breakdown Structure
Exercise #2
You are the project manager on the case

study project. In each of your groups,
create a that meets the required project
scope (using the WBS template format in
the Previous slide).
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Scope Verification
Scope Verification is the process of obtaining the

stakeholders’ formal acceptance of the completed
project scope. Verifying the scope includes reviewing
deliverables and work results to ensure that all were
completed satisfactorily. If the project is terminated
early, the scope verification process should establish
and document the level and extent of completion
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Scope Verification
Scope Verification
Tools
1. Inspections
Inputs Outputs
1. Project scope 1. Acceptance
statement deliverables
2. WBS dictionary 2. Requested changes
3. Project scope 3. Recommended
management plan corrective actions
4. Deliverables anajjar@pmihouse.org
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Scope Verification
Inputs
1. Project scope statement
2. WBS dictionary
3. Project scope management plan
4. Deliverables
The deliverables are those that have been fully or
partially completed, and are an outputs of the direct and
manage project execution process.
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Scope Verification
Tools & Techniques

Inspection – includes activities such as
measuring, examining, and verifying to
determine whether work and deliverables
meet requirements and product
acceptance criteria.
Also referred to as reviews, product

reviews, audits, and walk-through.
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Scope Verification
Outputs
1. Acceptance deliverables
• Documents the deliverables that have been completed
and accepted and the ones that have not been accepted
and the reasons for non-acceptance.
• Acknowledging stakeholders acceptance of the project

deliverables.
2. Requested changes
3. Recommended corrective actions

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Scope Change Control
• A process for controlling changes to project scope
by:
Influencing the factors that create project scope changes, in
order to ensure the changes are agreed upon
Assuring that all requested changes are processed according
to the project integrated change control
Managing the actual changes when they occur
The system includes the paperwork, tracking systems,

and approval levels necessary for authorizing changes
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Change Control Process
• Steps for changing official project documents

• Change Control Board (CCB) – Responsible
for approving or rejecting change requests
• Procedures for handling those changes that
may be approved without prior review
• The scope change control process is a
subsidiary process of the overall project
control process
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Scope Control
Scope Change Control

Tools
1. Change Control System
2. Variance Analysis
3. Re-planning
4. Configuration Management System
Outputs
1. Project scope statement (updates)
2. WBS (updates)
Inputs 3. WBS dictionary (updates)
4. Scope baseline (updates)
2. WBS
5. Requested changes
3. WBS dictionary
4. Project Scope management plan 6. Recommended corrective actions
5. Performance reports 7. Org. process Assets (updates)
6. Approved change requests 8. Project management plan
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7. pmbok
Source: Work performance information
guide 2004
(updates)
Scope control
Inputs
2. WBS
3. WBS dictionary
4. Project Scope management plan
5. Performance reports
Provide information on project work Performance, such
as interim deliverables that have been completed.
6. Approved change requests
Any modification to the agreed-upon project scope
baseline.
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Scope control
Inputs
7. Work performance information
Schedule progress showing status information.
Deliverables that have been completed and those not
completed.
Schedule activities.
Extent to which quality standard are met.
Costs authorized and incurred.
ETC the schedule.
% physically completed
Lessons learned.
Resource utilization detail.
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Tools & Techniques
1. Change control system

• Defines the procedures by which the project scope and
product scope can be changed, includes the
documentation, tracking systems & approval levels
necessary for authorizing changes.
2. Variance analysis
• Determining the cause of variance relative to the scope
baseline and deciding whether corrective action is
required.
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Tools & Techniques
3. Re-planning
4. Configuration management system
Provides procedures for the status of the deliverables,

and assures that requested changes to the project scope
and product scope are thoroughly considered and
documented before being processed through the
Integration Change Control process.
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92
PMP
Management
Akram Al-Najjar, PMP

Planning & Cost Control Manager
Time Management Processes
Chapter 6
Time Management
Akram Al-Najjar, PMP,PSP

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93
AGENDA
Time Management Processes

What is Time Management?
How does the PMBOK® Guide describe
Time Management?
Discussion

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Time Management
Processes required to accomplish
timely completion of the project
Activity Definition
Activity Sequencing
Activity Resource Estimating
Activity Duration Estimating
Schedule Development
Schedule Control

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Key Elements Of Time Management
Estimating
Network Analysis Techniques
There will be questions from both of

these topics on the exam!

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Estimating
Time management involves a bottoms-up

approach. Estimate the duration of each
activity and combine that with the network
diagram to build up the schedule to determine
overall project duration.
Top-Down estimating is not a recommended
PMI method for establishing overall project
duration. Noted/qualified exception: When
there is a limited amount of detailed
information about the project.
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Estimating
Expert judgment guided by historical

information used whenever possible
Anything less is inherently uncertain
and risky

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Estimating
Parametric / Quantitatively Based Durations
Example (Pipeline Construction)

200 m of pipe can be welded per day
30000 m of pipe are required
30000 m / 200 m per day = 150 days

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Estimating
Parametric / Quantitatively Based Durations
Example (IT Y2K Planning)

1 program debugged and unit tested per week
20 programs to be corrected
20 programs / 1 program per week = 20
weeks

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Estimating
PERT Duration Calculation
Higher
Most Likely
Probability (Used in original CPM Calculations)
Of PERT Weighted Average =
Optimistic + 4 X Most Likely + Pessimistic
Occurrence ( 6 )
Beta Distribution
Lower Optimistic Pessimistic
Shorter Possible Durations Longer

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Calculation of PERT
PROBABILITIES
TIME ESTIMATE
Te= a + 4b + c
6
a = OPTIMISTIC
b= MOST LIKELY
c = PESSIMISTIC

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Calculation of PERT PROBABILITIES continue
TIME VARIANCE
σ=c–a
V = σ2
6
a = OPTIMISTIC
c = PESSIMISTIC

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Normal Distribution
Statistically measures variability - commonly used in quality control
-1σ +1 σ
-2 σ +2 σ
-3σ Te, Project +3 σ

Duration
68.26%
95.46%
99.73%
LCL UCL
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Network Diagram Analysis

Critical Path Method
Critical Path
Early/Late Start and Finish
Float

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2 Days 12 Days 5 Days
A B C
Start Finish
D E F
There are many ways to do this.

This is just one approach.
Find one you like and learn it. Akram Al-Najjar, PMP,PSP
+20105394312
Activity Sequencing Process

Finish-to-Start – Activity A must finish before Activity B
can start , the initiation of the work of the successor
depends upon the completion of the work of the
predecessor.
A B
Start-to-Start – Activity A must start before
Activity B can start , the initiation of the work of
the successor depends upon the initiation of the
work of the predecessor.
A B
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Finish-to-Finish – Activity A must finish before Activity
B can finish , the completion of the work of the
successor depends upon the completion of the work of
the predecessor.
A B
Start-to-Finish – Activity A must start before
Activity B can finish , the completion of the
successor is dependent upon the initiation of the
predecessor.
A B
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Activities Activity Resources Original Predecessor
Code Description Needed Duration Logic
Start 0 -------------
A 2 Start
B 12 A
C 5 B&D
D 6 Start
E 7 D
F 3 E
Finish 0 C&F
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A B C
Start Finish
D E F
There are many ways to do this.

This is just one approach.
Find one you like and learn it. Akram Al-Najjar, PMP,PSP
+20105394312

The Forward Pass …
Early Start Early Finish

2 Days
Box Box
0 2
A Early Start Date =

0 0
Early Start Box + 1 Day
Start 6 Days
0 6 Early Finish Date =
Early Finish Box
D
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The Forward Pass …
Early Start = Highest of predecessor’s
Early Finish Times

0 2 2 14 14 19
A B C
0 0 19 19
Start Finish
0 6 6 13 13 16
D E F
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The Backward Pass …
5 Days
14 19
Late Start Date = C 19 19
Late Start Box + 1 Day 19
14 Finish
19 19
3 Days
Late Finish Date =
Late Finish Box 13 16
F
Late Start 16 19 Late Finish
Box Box
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103
Late Finish = Lowest of successor’s
Late Start Times
0 2 2 14 14 19
A B C
0 2 2 14 14 19
0 0 19 19
Finish
Start
6 Days 7 Days 3 Days 19 19
0 0
0 6 6 13 13 16
D E F
3 9 9 16 16 19
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FLOAT
The amount of time a task can be delayed without delaying the end date of the project.
The difference between either the Late and Early Start or the Late and Early Finish.
0 2 2 14 14 19
A B C
0 2 2 14 14 19
0 0 19 19
(0) (0) (0) Finish
Start
0 0
0 6 6 13 13 16 (0)
Float = (0) D E F
3 9 9 16 16 19
(3) (3) (3) anajjar@pmihouse.org
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104
Critical Path = The longest path through the network
= The path through the network with all tasks at 0 Float
= Start-A-B-C-Finish
0 2 2 14 14 19
A B C
0 2 2 14 14 19
0 0 19 19
(0) (0) (0) Finish
Start
0 0
0 6 6 13 13 16 (0)
Float = (0) D E F
3 9 9 16 16 19
(3) (3) (3) Akram Al-Najjar, PMP,PSP
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Late Finish = Lowest of successor’s
Late Start Times
1 2 3 14 15 19
A B C
1 2 3 14 15 19
1 1 19 19
Finish
Start
1 1
1 6 7 13 14 16
D E F
4 9 10 16 17 19
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105
10 1 4
Figure H
C D E
6 7 9 8 4 6 3
A B F G H J K
11
5 - What is the duration of the near critical path based on figure

H?
A. 33
B. 44
C. 47
D. 43
10 1 4
Figure H
C D E
6 7 9 8 4 6 3
A B F G H J K
11
10- Using figure H, a new task R with a duration of five is added

to this project. Task R has a predecessor of task A and a
successor of task B. How long will the project now take?
A. 49
B. 48
C. 38
D. 52
106
10 1 4
Figure H
C D E
6 7 9 8 4 6 3
A B F G H J K
11
12- Based on the network diagram in figure H, the resource

working on task G is replaced with another resource with
50% of the productivity of the previous resource. How long
will this project take?
A. 44
B. 51
C. 52
D. 36
Based on the chart, what is the float of activity F ?
A. 2
B. 3
C. 5
D. 0
Preceding Estimate
Activity activity weeks
Start 0
C Start 3
D C 6
A C 8
E D 4
B A,E 5
F E 3
End B,F 0
107
- You have a project with the following tasks: Task 1 can
start immediately and has an estimated duration of
four. Task 2 can start after Task 1 is completed and
has an estimated duration of eight. Task 3 can start
after Task 2 is completed and has an estimated
duration of five. Task 4 can start after Task 1 is
completed and has an estimated duration of eight.
Task 5 has an estimated duration of three and must
take place concurrently with Task 3. It can start after
Tasks 4 and 2. What is the duration of the critical
path of this project?
A. 15.
B. 18.
C. 17.
D. 12.
Calculation of PERT PROBABILITIES
TIME VARIANCE
σ=c–a
V = σ2
6
a = OPTIMISTIC
Te= a + 4b + c
c = PESSIMISTIC 6
b = MOST LIKELY

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108
Normal Distribution
-1σ +1 σ
-2 σ +2 σ
-3σ Te, Project +3 σ

Duration
68.26%
95.46%
99.73%
LCL UCL
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PERT Example
1- Expected Project Duration: 12.17 days
2-VARIANCE
A B =0.67x0.67+0.5x0.5+0.33x0.33=0.8078
3- Standard Deviation of Critical Path: .898
C D Task
Time, Days PERT standard
Activity OptimisticMost Likely Pessimistic Expected deviation
A 2 4 6 4 .67
B 2 3 5 3.17 .5
C 4 7 10 7 1
D 4 5 6 5 .33
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109
PMBOK® Chapter 6
There are 6 major Processes:
1. Activity Definition
2. Activity Sequencing
3. Activity Resource Estimating
4. Activity Duration Estimating
5. Schedule Development
6. Schedule Control
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Time Management
Planning Controlling
6.1 6.2 6.3

Activity Activity Resource
Definition Sequencing Estimating
6.5 6.6
Schedule Schedule
Development Control
6.4
Activity
Duration
Estimating

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111
Activity Definition
Identifying the specific schedule activities

that need to be performed to produce the
various project deliverables.

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Activity Definition
Tools & Techniques
• Decomposition
• Templates
• Rolling Wave Planning
• Expert Judgment
• Planning Component
Inputs
• Enterprise Environmental
Factors Outputs
• Organizational Process • Activity list
Assets • Activity Attributes
• Project Scope Statement • Milestone List
• WBS • Requested Changes
• WBS Dictionary
• Project Management Plan anajjar@pmihouse.org
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Activity Definition Tools &
Techniques
Rolling Wave Planning
:Form of progressive elaboration
planning where the work to be
accomplish in the near future is planned
in detail while the work in the far future
is at higher level of WBS, it is indicating
that planning is an iterative and
ongoing process.

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Activity Sequencing
Identifying and documenting

dependencies among schedule activities.

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113
Activity Sequencing
Tools & Techniques
• Precedence diagramming
method (PDM)
• Arrow diagramming
method (ADM)
• Schedule network templates
• Dependency determination
• Applying leads and lags
Inputs Outputs
• Project Scope Statement • Project Schedule network
• Activity list diagram
• Activity Attributes • Activity list (updates)
• Milestone List • Activity Attributes (updates)
• Approved Requested • Requested Change
Changes anajjar@pmihouse.org
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Tools & Techniques
Precedence diagramming method (PDM)

Nodes represent activities and arrows show
dependencies
A B
Start E Finish
C D
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Finish-to-Start – Activity A must finish before Activity B
can start , the initiation of the work of the successor
depends upon the completion of the work of the
predecessor.
A B
Start-to-Start – Activity A must start before
Activity B can start , the initiation of the work of
the successor depends upon the initiation of the
work of the predecessor.
A B
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Finish-to-Finish – Activity A must finish before Activity
B can finish , the completion of the work of the
successor depends upon the completion of the work of
the predecessor.
A B
Start-to-Finish – Activity A must start before
Activity B can finish , the completion of the
successor is dependent upon the initiation of the
predecessor.
A B
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115
Tools and Techniques (cont.)
Arrow diagramming method (ADM) or
(AOA) – Uses arrows to represent activities
and connecting nodes to show dependencies
Start
A =10d
B=5d
C=20d
D=4d E=2d
Finish
ADM uses finish-to-start dependencies only and uses

dummy activities to show logical relationships
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Tools & Techniques (cont.)

Schedule Network templates – Can include an entire
project or just a portion of it (i.e., subnets and fragnets)
Dependency determination :
-Mandatory dependencies (Hard logic) –
Determined by the qualities of work to be done
-Discretionary dependencies (Soft logic) Defined
by the project management team
-External dependencies – Relationships between
project activities and non-project activities
Applying Leads and Lags
A lead allows an acceleration of the successor activity.
A lag directs a delay in the successor activity.
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116
Estimating the type and quantities

of resources (persons, equipment,
or materiel) required to perform
each schedule activity.

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Tools & Techniques
• Expert judgment
• Alternatives Analysis
• Published Estimating Data
• Project Management Software
• Bottom-up Estimating
Inputs
• Enterprise Environmental Outputs
Factors • Resource requirements
• Organizational Process Assets • Activity Attributes (Updates)
• Activity List • Resource Breakdown Structure
• Activity Attributes • Resource Calendar (Updates)
• Resource Availability • Requested Changes
• Project Management Plan anajjar@pmihouse.org
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The process of estimating schedule activity
durations uses information on schedule
activity scope of work, required resource
types, estimated resource quantities, and
resource calendars with resource availabilities.

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Tools & Techniques
• Expert judgment
• Analogous estimating
• Parametric estimating
• Three-Point Estimates
Inputs • Reserve Analysis
Factors
• Organizational Process
Assets
• Project Scope Statement Outputs
• Activity list • Activity duration estimates
• Activity Attributes • Activity Attributes (Updates)
• Activity Resource requirements
• Resource Calendar
• Project Management Plan
Risk Register anajjar@pmihouse.org
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Activity
Source: Cost
pmbok guide 2004 Estimates.
118
Tools & Techniques
Reserve Analysis: An additional
time frame, called time reserve,
contingency, or buffer, that can be
added to the activity duration or
elsewhere in the schedule as
recognition of schedule risk

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An iterative process, determining the start and

finish dates of project activities

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119
Tools & Techniques
• Schedule Network Analysis
• Critical Path Method
• Schedule Compression
• What-If Scenario Analysis
• Resource Leveling
Inputs •
•
Critical Chain Method
Project Management Software
• Organizational Process Assets • Applying Calendars
• Project Scope Statement • Adjusting Leads and Lags
• Activity List • Schedule Model
• Activity Attributes Outputs
• Project Schedule Network Diagrams • Project schedule
• Activity Resource Requirements • Schedule Model Data
• Resource Calendars • Schedule Baseline
• Activity Duration Estimates • Resource-requirement updates
• Project Management Plan • Activity Attributes (Updates)
Risk Register. • Project Calendar (Updates)
• Requested Changes
• Project Management Plan (Updates)
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Tools & Techniques

Schedule Compression :
Crashing – Analyzing cost and schedule
tradeoffs to determine how to obtain the
greatest amount of compression for the
least incremental cost
Fast tracking – Doing activities in parallel
that would normally be done in sequence

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120
Tools & Techniques
What-if analysis: such as delaying a major component delivery,
extending specific engineering durations, or introducing external
factors, such as a strike or a change in the permitting process.
Resource-leveling (Resource-based method) – Changing the

schedule to accommodate resources
Critical Chain Method: is another schedule network analysis
technique that modifies the project schedule to account for limited
resources.
The critical chain method adds duration buffers that are non-work
schedule activities to maintain focus on the planned activity
durations. Once the buffer schedule activities are determined, the
planned activities are scheduled to their latest possible planned start
and finish dates. Consequently, In lieu of managing the total float of
network paths,
the critical chain method focuses on managing the buffer
activity durations and the resources applied to planned
schedule activities.
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Outputs
Project schedule : includes at least a planned start
date and planned finish date for each schedule activity.
Project schedule network diagrams.
Bar charts.
Milestone charts.
Schedule Model Data
Schedule Baseline : baseline is a specific version of
the project schedule developed
Resource Requirements (Updates)
Activity Attributes (Updates)
Project Calendar (Updates)
Requested Changes
Project Management Plan (Updates)
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Basic Terminology
Total float (Slack) – Amount of time an activity

can be delayed and the project finish date not be
effected
Free Float – Amount of time an activity can be

delayed and the early start of the follow-on
activity not be effected

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Gantt Charts
Bar chart – Displays activity start and

end dates, as well as expected durations
Milestone chart – Displays scheduled

start or completion of major deliverables

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122
Typical Gantt Chart
Activity
Task A
Task B
Task C
Task D
June July Aug Sep Oct Nov
Time Akram Al-Najjar, PMP,PSP

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Typical Milestone Chart

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123
Schedule Control
Schedule control is concerned with:

Determining the current status of the
project schedule
Influencing the factors that create schedule
changes
Determining that the project schedule has
changed
Managing the actual changes as they occur.

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Schedule Control
Tools & Techniques
• Progress Reporting
• Schedule Change Control System
• Performance Measurement
• Variance Analysis
• Schedule Comparison Bar Charts
Outputs
• Schedule Model Data (Updates)
Inputs • Schedule Baseline (Updates)
• Schedule Management Plan • Performance Measurements
• Schedule Baseline • Recommended Corrective Actions
• Performance Reports • Organizational Process Assets (Updates)
• Approved Change Requests • Activity List (Updates)
• Activity Attributes (Updates)
• Project Management PMP,PSP)
Plan (Updates
Akram Al-Najjar,
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124
Tools & Techniques
Progress Reporting: includes information such

as actual start and finish dates, and the
remaining durations for unfinished schedule
activities.
Schedule Change Control System: includes the
paperwork, tracking systems, and approval levels
necessary for authorizing changes.
Performance Measurement: Performance
measurement techniques produce the Schedule
Variance (SV) (Section 7.3.2.2) and Schedule
Performance Index (SPI) (Section 7.3.2.2)
Variance Analysis: Comparing target schedule dates
with the actual/forecast start and finish dates
Schedule Comparison Bar Charts
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Outputs
Schedule Model Data (Updates)
Schedule Baseline (Updates)
Performance Measurements
Requested Changes
Recommended Corrective Actions
Organizational Process Assets (Updates)
Activity List (Updates)
Activity Attributes (Updates)
Project Management Plan (Updates)

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Short Break
Any questions?

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126
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127
PMP
Management

Chapter 7
Project Cost
Management
128
AGENDA
What is Cost Management?

Cost Management Processes
How does the PMBoK® Guide describe
Cost Management?
Discussion

scope statement
Create WBS
Activity sequencing
Acitivity resource
estimating
Activity duration
estimating
Schedule
development
Cost budgeting
Perform quality
Human resource
Communications
Stakeholders
Risk management
Risk identification
Qualitative risk
Quantitative risk
analysis
Risk response
planning
129
Processes involved in planning, estimating,

budgeting, and controlling costs so that the project
can be completed within the approved budget.
Cost Estimating
Cost Budgeting
Cost Control
Gantt Chart
130
Planned Value (PV)
Planned Value (PV)
¾Previously (and still in many places) called

Budgeted Costs for Work Scheduled (BCWS).
¾A monetary representation of how much work
was scheduled to be done at a point in time.
Example: After 4 months, we are scheduled to
complete Activity 1 and 75% of Activity 2
which are budgeted for a total of $32,000. The
total project budget is $100,000. The Planned
Value at 4 months is $32,000.
131
Work Plan Status
PV and EV
132
Earned Value (EV)
¾ Previously (and still in many places) called
Budgeted Costs for Work Performed (BCWP).
¾ A monetary representation of how much work
has been completed, using the baseline cost for
that work, at a point in time.
Example: After 4 months, we have completed
Activity 1 and 50% of activity 2 . The budgeted
cost for this work completed was $24,000. The
total project budget is $100,000. The Earned
Value at 4 months is $24,000.
PV , EV and AC
133
PV , EV and AC
Actual Costs (AC)

¾ Previously (and still in many places) called
Actual Costs for Work Performed (ACWP).
¾ The monetary representation of the costs
incurred at a point in time, regardless of how
much work has been done.
Example: After 4 months, we have completed
Activity 1 and 50% of activity 2. The project
costs at this point in time are $29,000. The total
project budget is $100,000. The Actual Cost at 4
months is $29,000.
134
Schedule Variance (SV)
The project has
New: delivered $8,000
less work at this
SV = EV – PV point in time than
was planned. This
= $24,000 - $32,000 project is behind
schedule. This is a
= ($8,000) great way to depict
ahead or behind on
Old: schedule, even
though it is in
SV = BCWP - BCWS monetary terms!!!
Cost Variance (CV)

New:
The project has
CV = EV – AC cost $5,000 more
to deliver the work
= $24,000 - $29,000 done so far than
was planned. This
= ($5,000) project is over
budget.
Old:
CV = BCWP - ACWP
135
Schedule Performance Index (SPI)
New: The project is
delivering work
slower than
SPI = EV / PV planned. The work
is being done at
= $24,000 / $32,000 75% of the
expected rate.
= 0.75
Old:
SPI = BCWP / BCWS
Cost Performance Index (CPI)

New: The project is
spending money
CPI = EV / AC faster than
planned. Only 83%
= $24,000 / $29,000 of work is being
delivered for the
= 0.83 amount of money
being spent.
Old:
CPI = BCWP / ACWP
136
Case 1
PV = $ 1,860 This is the ideal
situation, where
EV = $ 1,860 everything goes
according to plan.
AC = $ 1,860
Budget At Completion (BAC)
¾This is the baseline cost of the total project.

¾How much we planned to spend by the time we
finished.
¾Example: After 4 months, we have completed
Activity 1 and 50% of Activity 2 The project
costs at this point in time are $29,000. The total
project budget is $100,000. The Budget At
Completion is $100,000.
137
Estimate At Completion (EAC)
Based on where we are now, how much will it

cost when the project is done?
The answer depends on whether your past
performance is a good indicator of expected
future performance… more

(1st of 3 methods)
¾If we know that we can finish the rest of the

work as it was originally planned …
¾Use actual to-date plus budgeted amount for the
rest of the work
¾EAC = AC + BAC – EV
= $29,000 + $100,000 - $24,000
= $105,000
138
(2nd of 3 methods)
¾If the original estimates were flawed,
we should build new estimates for all
the remaining work … Assume this
¾ETC is the Estimate to Complete the was the
total ETC
remaining work. from a
¾EAC = AC + ETC completely
rebuilt
= $29,000 + $120,000 estimate
= $1,49,000

(3rd of 3 methods)
¾If we assume that past performance is a
good indicator of future performance …
¾Use actual to-date plus budgeted amount for
the rest of the work, modified by a
performance factor, such as CPI
¾EAC = BAC/CPI
= $100,000/0.83
¾ = $120,481 (rounded off)
139
EVM Performance Measures
EVM and Basic PM Questions
140
Types Of Costs
Direct Costs- Cost that are directly attributable to the

work on project. Examples are team travel, team wages,
recognition and cost of material used on the project
Indirect costs – Overhead items or costs incurred for the

benefit of more than one project. Examples include taxes,
fringe benefits, and janitorial services.
DEPRECIATION
STRAIGHT LINE DEPRECIATION : the same amount of

depreciation is taken each year, A US $ 1,000 item with a
ten year useful life and no salvage value (how much item
is worth at the end of its life) would be depreciated at US
$100 per year.
ACCELERATED DEPRECIATION – you only need to know:

There are two forms of accelerated depreciation –
Double Declining Balance and Sum of the Years Digits.
They depreciate faster than straight line.
You do not have to know what these two forms means or
do any calculations.
141
LIFE CYCLE COSTING
LIFE CYCLE COSTING : Means that the cost of operation

and maintenance phase to be consider and manage with
the project cost
PROJECT OPERATIONS AND

MAINTENANCE PHASE
costs costs
Questions & Answers EV
4. You are a project manager working on a

project that requires 100 widgets to be built
in five weeks. You have just begun week
three, with an overall budget of US $10,000.
To date you have spent US $2,000 with 40
widgets successfully built. What does the
cost variance tell you in this circumstance?
A. The project is proceeding at 100% of the

expected rate
B. The project is $2000 under budget
C. The project is on budget
D. The project is getting $2 of work for every
dollar spent anajjar@pmihouse.org
142
5. You are a project manager for a small

construction project. Your project was
budgeted for US $72,000 over a six week
period. As of today, you've spent US $22,000
of your budget to complete work that you
originally expected would cost US $24,000.
According to your schedule, you should have
spent US $30,000 by this point. Based on
these circumstances, your project could be
BEST described as:
A. Over budget
B. On budget
C. Under budget
D. Not having enough information provided
11. A cost Performance Index (CPI) of 0.89

means:
A. At this time, we expect the total project to cost
89% more than planned.
B. When the project is completed we will have
spent 89% more than planned.
C. The project is only progressing at 89% of that
planned.
D. The project is only getting 89 cents out of
every dollar invested.
143
12. A Schedule Performance Index (SPI) of

0.76 means:
A. We are over budget.
B. We are a head of schedule.
C. We are only progressing at 76% of the rate
originally planned.
D. We are only progressing at 24% of the rate
originally planned.
Processes involved in planning, estimating,

budgeting, and controlling costs so that the project
can be completed within the approved budget.
Cost Estimating
Cost Budgeting
Cost Control
144
145
Cost Management
Planning Controlling
7.2 7.3 7.4

Cost Cost Cost
Estimating Budgeting Control
Cost Estimating
Process of developing an approximation (or estimate)

for the cost of the resources necessary to complete
the project activities
Difference between cost estimating and

pricing:
Cost estimating: Assessing how much it will cost the
organization to provide the product or service
Pricing: Assessing how much the organization will
charge for the product or service
146
Cost Estimating
Tools & Techniques
• Analogous estimating
• Determine Resource Cost Rates
• Bottom-up estimating
• Parametric estimating
Inputs • Vendor Bid Analysis
• Enterprise Environmental Factors • Reserve Analysis
• Organizational Process Assets • Cost of Quality
• Project Scope Statement
• Work Breakdown Structure
• WBS Dictionary Outputs
• Project Management Plan • Activity Cost estimates
Schedule management plan. • Supporting detail
Staffing management plan. • Requested Changes
Risk register. • Cost management plan
Inputs
Enterprise Environmental Factors , considers:
Marketplace conditions.
Commercial databases.
Organizational Process Assets

Cost estimating policies.
Cost estimating templates.
Historical information.
Project files.
Project team knowledge.
Lessons learned.
147
Inputs (cont.)
Project Scope Statement
describes the business need, justification,
requirements, and current boundaries for the
project.
Work Breakdown Structure
WBS provides the relationship among all the

components of the project and the project
deliverables
WBS Dictionary
provide an identification of the deliverables

and a description of the work in each WBS
component required to produce each
deliverable.
Inputs (cont.)
Project Management Plan
Schedule management plan: The type and quantity of
resources and the amount of time those resources
are applied to complete the work of the project is a
major part of determining the project cost.
Staffing management plan.
Project staffing attributes and personnel rates
(Section 9.1.3.3) are necessary components for
developing the schedule cost estimates.
Risk register.
The cost estimator considers information on risk
responses (Section 11.2.3.1) when producing cost
estimates.
148
Tools & Techniques
Analogous estimating (Expert judgment) – Used to

estimate total project costs if there is a limited amount
of detailed information
Determine Resource Cost Rates
Bottom-up estimating – Estimating the cost of

individual work items and then rolling up the costs to
arrive at a project total
Parametric estimating – Using project characteristics

(or parameters) in a mathematical model to predict
costs (e.g., price per square foot)
Project Management Software - PM software and

spreadsheets
Tools & Techniques

Vendor Bid Analysis
Reserve Analysis : Contingency reserves are estimated

costs to be used at the discretion of the project
manager to deal with anticipated, but not certain,
events. These events are “known unknowns” and are
part of the project scope and cost baselines.
Cost of Quality :Cost of quality (Section 8.1.2.4) can also

be used to prepare the schedule activity cost estimate.
149
Outputs
Activity Cost estimates – Quantitative

assessments of the cost of resources (e.g.,
units of currency or staff hours)
Types of estimates
Order of magnitude
Budget estimate
Definitive estimate
Supporting detail
Description of estimated scope of work
Documentation of the basis for the estimate
Documentation of any assumptions made
Range of possible results
Cost Estimating
Outputs (cont.)
Requested Changes
The Cost Estimating process may generate
requested changes that may affect the cost
management plan, activity resource requirements
and other components of the project management
plan. Requested changes are processed for review
and disposition through the Integrated Change
Cost management plan
Describes how cost variances will be
managed
Part of the overall project plan
150
Cost Budgeting
Aggregating the estimated costs of

individual activities or work packages
to establish a cost baseline.
Cost Budgeting
Tools & Techniques

• Cost Aggregation
• Reserve Analysis
• Parametric Estimating
• Funding Limit Reconciliation
Inputs
• Project Scope Statement
• Work Breakdown Structure Outputs
• WBS Dictionary • Cost baseline
• Cost estimates • Project Funding Requirements
• Supporting Detail • Cost Management Plan (Updates)
• Project schedule • Requested Changes
• Resource Calendars
• Contract
• Cost management plan
151
Inputs
Project Scope Statement :
WBS – Identifies the project elements to which

the costs will be allocated
WBS Dictionary
Cost Estimates
Cost Estimate Supporting Detail
Project schedule – Used to assign costs to

project elements for the time period when
costs will be incurred
Resource Calendars
Inputs
Contract
(Section 12.4.3.2) information related to what
products, services, or results have been
purchased — and their costs — are used in
developing the budget.
Cost Management Plan

The cost management plan component of the
project management plan and other subsidiary
plans are considered during cost budgeting.
152
Tools & Techniques
Cost Aggregation
Reserve Analysis :
Management contingency reserves are budgets
reserved for unplanned, but potentially
required, changes to project scope and cost.
Parametric Estimating
Funding Limit Reconciliation
Outputs
Cost baseline – Time phased budget that will

be used to measure and monitor the cost
performance of the project
140
120
100
BCWS ($K)
80
60
40
20
0
Jan Feb Mar Apr May Jun
Reporting Period
153
Outputs
Project Funding Requirements
Cost Management Plan (Updates)
Requested Changes
Cost Control
• Influencing the factors that create changes
to the cost baseline to ensure that changes are agreed upon
• Determining that the cost baseline has changed
• Managing the actual changes when and as they occur
Includes:
Monitoring cost performance to detect variances from the
plan
Ensuring that all appropriate changes are recorded
Preventing incorrect, inappropriate, or unauthorized
changes
Informing the appropriate stakeholders of authorized
changes
Analyzing positive and negative variances and how they
affect the other control processes
154
Cost Control
Tools & Techniques

• Cost change control system
• Performance measurement Analysis
• Forecasting
• Project Performance Reviews
• Variance Management
Outputs
Inputs • Cost Estimates (Update)
• Cost baseline • Cost Baseline (Updates)
• Project Funding Requirements • Performance Measurements
• Performance reports • Forecasted Completion
• Work Performance Information • Requested Changes
• Approved change requests • Recommended Corrective action
• Project management plan • Organizational Process Assets (Updates)
• Project Management Plan (Updates)
Cost Control
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1: You are managing the release of a new drug in the market. Your Role is that of a:
A. Functional Manager, because you have good understanding functional knowledge of the
Pharmaceutical industry
B. Project Manager, because you are creating a unique product within specific time
schedules
C. Operations Manager, because you have to do several repetitive tasks
D. Program Manager, because you have to manage several subprojects to effectively do
your job
2: Which of the following statement related to Standards and Regulations is not correct?
A. Standard is a document established by consensus and approved by a recognized

body
B. Regulations are mandatory but Standards are not mandatory
C. Standards after widespread adoption may become a regulations
D. The influence of standards and regulations for a project is always known
3: In which organization structure does a Project Manager have maximum influence?
A. Functional Organization
B. Weak Matrix
C. Strong Matrix
D. Projectized Organization
4: Matrix organizations exhibit features of both projectized and functional organizations.

In a Weak Matrix organization, the role of a project manager is that of a:
A. coordinator and expediter

B. project manager with considerable authority
C. support person
D. functional manager
5: Collectively, project phases are also referred to as "Project Life Cycle". All the
following statements about project life cycles are correct EXCEPT:
A. All project life cycles are usually identical

B. The level of risk is highest at the start of the project, and decreases as the project
progresses.
C. Ability of the stakeholders to influence the final characteristics is highest at the
start, and gets progressively lower as the project continues.
D. Cost and staffing requirements usually peak during the intermediate phases
157
6: As a project manager, you realize that handling Project Stakeholder expectations is an
important priority. Which statement regarding project stakeholders is not correct?
A. Negative stakeholders must be ignored if the project has to be brought to successful

completion.
B. Stakeholders have varying levels of responsibility and authority when participating
on a project and these can change over the project life cycle
C. Some key stakeholders include Project Manager, Performing organization, Project
team members, Customer and Sponsor
D. Stakeholder expectations may be difficult to manage because stakeholders often
have conflicting objectives.
7: You have been managing a project to complete a flyover over Interstate 10. You have
divided the project into phases to provide better management control. Which of the
following is a characteristic of a project phase?
A. Project phase may be completed without any deliverables.

B. project phase can be closed without the decision to initiate any other phases
C. Even in complex projects, it is advisable not to divide project phases into sub-phases
because it makes project management more difficult.
D. All deliverables in the project phase should correspond to project management
process.
8: Which of the following is an output from the Monitoring and Controlling Process?
A. Recommended corrective actions

B. Project Management Plan
C. Contract closure procedure
D. None of the above
9: Project Management is the application of knowledge, skills, tools and techniques to

project activities to meet project requirements. As a project manager, you will often have
to contend with conflicting stakeholder demands and not well-defined or changing
requirements. Balancing the different factors
Which affect a project is going to be critical in determining how successful you are as a
project manager. When managing competing project requirements, you should be aware
of the "triple constraint" - which of the following is not a factor in the triple constraint?
A. Scope
B. Time
C. Integration
D. Cost
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10: All the following statements related to Progressive Elaboration of projects are true
except:
A. Scope of the project can change when product characteristics are progressively
elaborated, and project manager must plan for such scope changes.
B. Because the product of each project is unique, characteristics that distinguish the
product or service must be progressively elaborated.
C. Requirements are made more explicit as the project team develops a better and
more complete understanding of the project
D. Progressive Elaboration is a characteristic of projects that integrates the concept of
temporary and unique.
11: As a project manager, you must formalize acceptance of the project scope and keep
The project focused on the business need that it was undertaken to address. This
Should be done:
A. At the beginning of the project

B. At the end of the project
C. When required by the Business Sponsor
D. After each phase of the project
12: All the following statements about Work Breakdown Structure (WBS) is correct
EXCEPT:
A. It is a hierarchical decomposition of work

B. Planned work contained in lowest level WBS components are also called WBS
dictionaries
C. WBS subdivides the project work into smaller, more manageable pieces of work
D. Organizes and defines the total scope of work of the project.
13: There has been a change to the scope of your project, which may adversely impact the
project schedules and cost. You have updated the technical and planning documents - all
the requested changes and recommended corrective action will now be processed through:
A. Impact Request Statements

B. Stakeholders who have been notified
C. Integrated Change Control process
D. Changes to the Risk Management Plan
159
14: One of your tasks as a project manager is to prepare a Scope Statement for your
project. The scope statement provides:
A. Authorization to the project manager to use organizational resources for project

activities.
B. Documentation of how the project scope will be managed and how scope changes
will be integrated into the project.
C. Definition for Work Breakdown structure
D. A documented basis for making future project decisions and for confirming or
developing common understanding of the project scope among stakeholders.
15 :Projects are usually chartered and authorized external to the project organization by
an enterprise, a government agency, a company, a program organization, or a portfolio
organization as a result of any of the following EXCEPT:
A. Keeping the project team busy

B. Market Demand
C. Technological Advance
D. Legal requirement
16: Creating Work Breakdown Structures (WBS) is very helpful in managing the project.
The first step in creating a WBS is:
A. Identifying the deliverables and related work

B. Determining the constituent components of the WBS.
C. Assigning responsibility for each task in the WBS.
D. Creating the cost and time estimates for each activity in the project.
17: All the following are inputs for Scope Planning EXCEPT:
A. Enterprise environmental factors

B. Organizational Process Assets
C. Project Management Plan
D. Approved Change Requests
18: Preparation of a detailed project scope statement is done as part of :
A. Scope Planning
B. WBS creation
C. Scope Elaboration
D. Scope Definition
160
19: Scope Verification is essential for:
A. Project Selection
B. Creating Work Breakdown Structures
C. Providing acceptance of project scope
D. Mitigating project risks
20: In Project Initiation, Expert Judgment will often be required to assess the inputs to
the process. This can be provided by all the following except:
A. Professional and Technical associations

B. Competitors
C. Consultants
D. Units within the performing organization
21: Please refer to the diagram given below: (all units are in days)
What is the project float if management wants to do this project within 10 days?
A. 0 days
B. - 4 days
C. 2 days
D. Cannot be determined because information in the question is inconsistent
22: Your project will most likely be completed in 10 weeks. Worst case scenario, the
project will require 19 weeks, and if everything goes well the project will be completed in
7 weeks. What is the PERT estimate for the task?
A. 10 weeks
B. Cannot be determined with the information provided
C. 9 weeks
D. 11 weeks
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23: You are the project manager of a construction company. You know that after pouring
the cement, you will have to wait for 3 days before you can start painting. This waiting
time can also be referred to as:
A. Lag
B. Lead time
C. Project Float
D. Constraint
24: As a project manager, you are responsible for meeting the project schedule deadlines.
If there is some delay in the project schedule, you should:
A. Increase the timeline for the project

B. Fast track or Crash the project, and let management know about the impacts of
these actions
C. Ask resources to work overtime and extra hours to meet the project deadlines.
25: Which of the following are inputs to schedule development?
A. Organizational Process Assets, Project Scope Statement and Activity List

B. Schedule network analysis, Resource Calendars, Activity attributes
C. Project Calendar, Requested Changes, Schedule model data
D. Schedule management plan, Schedule baseline, Performance reports
26: While creating a project schedule, what is the duration you will provide to a
milestone?
A. Duration equal to the phase of the project

B. 0 duration
C. Duration equal to the total time required for the activity or task
D. Duration of the complete project till the milestone date
27: Dummy activities have zero duration and are used to show a
logical relationship between tasks. They can be used in all these diagrams except:
A. CPM
B. PERT
C. ADM (Arrow Diagramming Method)
D. PDM (Precedence Diagrammatic Method)
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28: In your project, you prefer Milestone charts over project network diagrams for the
purpose of:
A. Making presentations to senior management

B. Determining the Critical Path of the project
C. Determine the start and finish dates for each activity
29: An Activity has an Optimistic estimate of 10 days, pessimistic estimate of 16 days,

most likely estimate of 13 days. Assuming a Normal Distribution, what is the probability
that the task will be completed within 10 -16 days?
A. 99.99 %
B. 99.73 %
C. 95.46 %
D. 68.26%
30: Please refer to the diagram below:
What is the slack for task 2?
A. 3
B. 2
C. 4
D. -4
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31: In your company, Payback period is primarily used as the decision criteria for project
selection. Payback period is the:
A. Number of years for a company to get back the invested amount

B. Discount Rate on an investment that makes present value of all cash inflows =
present value of all cash outflows
C. The duration in which the project gets completed
D. Number of years for a company to make profits equal to the amount invested
32: You were talking with your finance manager who mentioned that for accounting
purposes, your property depreciates by the same amount every year. This is also called:
A. Sum of the Year Digits

B. Accelerated Depreciation
C. Straight Line Depreciation
D. Double Declining Balance
33: All the following statements about Cost Baseline are correct EXCEPT:
A. It is a time phased budget

B. To measure disbursements, a spending plan can be used as a cost baseline
C. It is used to measure and monitor project performance
D. All projects have one cost baseline
34: In your project, there have been several changes in the cost and schedule estimates
and the original estimating assumptions are no longer valid. What is the Estimate at
Complete for your project?
* BAC = $ 300,000
* AC = $ 100,000
* EV = $ 150,000
* CPI = $ 1.2
* ETC = $ 120,000
A. $ 250,000
B. $ 220,000
C. $ 280,000
D. $ 300,000
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35: If cost variance is negative, but schedule variance is positive, then this indicates:
A. Cost and schedule are not dependent on each other

B. The project is over budget and ahead of schedule
C. The project is under budget and behind schedule
D. Crashing may be recommended to make the cost variance positive
36: There are three projects:

* Project A has a payback period of 3 years and NPV of $ 300,000
* Project B has a payback period of 2 years and NPV of $ 200,000
* Project C has a payback period of 1 years and NPV of $ 100,000
Which project should be selected?
A. Project A
B. Project B
C. Project C
D. Project A, B or C can be selected because all of them have equal value
37: Activity Cost Estimate Supporting Detail includes: (please select the best answer)
A. Complete picture of how cost estimate was derived

B. Documentation of constraints
C. Indication of range of possible estimates
D. All of the above
38: The ability to influence cost of a project is:
A. Greatest at early stages of the project

B. Greatest at the middle of the project
C. Greatest at the project closure stage
D. Dependent on the type of the project selected
39: A project was expected to cost $ 6 million for 3 months. At the end of 1 month, you use
Earned Value as a performance management tool and get the following information:
* BCWP = $ 1.5 million
* BCWS = $ 2.5 million
* ACWP = $ 2.2 million
What is the Schedule Variance?
A. 0.3 Million
B. -1 Million
C. 1 Million
D. 0.7 Million
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40:Earned Value Technique(EVT) is a tool and technique to measure project
performance. In EVT, BCWP refers to:
A. Physical work actually accomplished, including the estimated value of this work
B. Physical work scheduled to be performed, including the estimated value of this
work
C. Actual cost incurred to accomplish the earned value
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PMP
Management

Chapter 8
Project Quality
Management

168
AGENDA
Quality Definition & Concept

Quality Management Processes
What is Quality Management?
Quality Management?
Discussion

What is Quality ?
Which is superior quality ?
VW
or
Rolls Royce
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Project Quality Management
Quality:
The Quality is the degree to which a set of inherent characteristics
fulfill requirements. (American Society for Quality, 2000.)
Grade:
Grade is a category assigned to products or services having the same
functional use but different technical characteristics.
a software product can be of high quality (no obvious defects,
readable manual) and low grade (a limited number of features),
or of low quality (many defects, poorly organized user
documentation) and high grade (numerous features).


The Development of Quality Management
Quality
Management
Quality is defined,
Quality assurance planned and
Quality develops supervised
during the companywide
Quality Control
production process
Quality is Commitment of
separating good Inspections shifted management
from bad parts into the production participation of
without feedback to process, employees, step by
the production prevention, process step improvement
process orientation
Final inspection
1950 1960 1970 1980 1990 2000

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Modern Quality Management

Customer satisfaction
Understanding, managing, and influencing needs so that customer
expectations are met
Prevention over inspection

The cost of avoiding mistakes is much less than the cost of
correcting them
Management responsibility
Success requires participation of all members of the team, but it
is the responsibility of management to provide resources needed
Continuous improvement.
Plan/Do/Check/Act cycle

Approaches to Quality Management

1. International Organization for Standardization (ISO)
2. Total quality Management (TQM)

3. Quality Gurus
Deming
Juran
Crosby

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1. ISO 9000
A quality system standard that is applicable

internationally to any product or service.
It is a system for quality assurance
It includes three-part, never-ending cycle
including:
Planning
Controlling
Documentation

2. Total quality Management (TQM)

A common approach to implementing a quality improvement
program within an organization.
Total quality management focuses on:
1. Effectiveness (meeting our objectives, goals &
expectations)
2. Efficiency (the maximum use of resources)
3. Reengineering
4. Restructuring
5. Business process:
Downsizing (firing people)
Rightsizing (reallocation)

172
3. Quality Gurus
A - Deming
Continuous improvement ( PDCA ) (Plan – Do – Check – Act)
Top down support ( top management support )
B – Crosby
Performance standard is “Zero defect “
Cost of quality is measured by cost of non-conformance
Conformance to requirements
Quality comes from Prevention
C – Juran
Fitness for use
Technical / Statistical focus
Juran’s Trilogy :
Quality improvement, Quality planning and Quality Control

Who is Responsible for Quality ?

173
Quality Team for a project
Senior
Management
Customer Regulatory
Authorities
Project
Manager
Vendors and Subcontractors

Suppliers
Project staff

Quality Management
Processes necessary to ensure that the

project will satisfy the need for which it
was undertaken.

174
Process Orientation
Planning
8.1 Quality Planning
Execution
8.2 Perform Quality Assurance
Monitoring & Controlling

8.3 Perform Quality Control

Quality Process Difference
Quality Quality Quality

Planning Assurance Control
Planning Implementation Control
Determine Determine if the Perform the

which quality quality measurement
standards are measurement is and compare
relevant and relevant to the plan
how to measure
them

175
176
Quality Planning
Identifying the quality standards that

are relevant to the project and
determining how to meet them
It is one of the Key processes during the project
planning.
Should be performed regularly and parallel with
the other project planning processes

8.1 Quality Planning

INPUTS PROCESS OUTPUTS
Enterprise environmental Quality management
“identifying which quality
factors plan
standards are relevant to the
Organizational process Quality metrics
project and determining how to
assets Quality checklists
satisfy them”
Project scope management Process improvement
Project management plan plan
Quality baseline
TOOLS & TECHNIQUES Project management
Cost-benefit analysis plan (updates)
Benchmarking
Design of experiments
Cost of quality (COQ)
Additional quality planning tools

177
Quality Planning, Tools & Techniques

1. cost / Benefit analysis:
Cost and benefit tradeoffs of meeting quality requirements.
benefit = less rework , higher productivity, lower costs, and
increased stakeholder satisfaction.
cost =expense associated with Project Quality Management
activities
2. Benchmarking:
Comparing actual or planned project practices to other projects,

in order to generate ideas for improvement and to provide a
standard against which to measure performance

3. Design of experiments:
Is a statistical method that helps identify which factors
might influence specific variables. example is where an
organization can use DOE to reduce the sensitivity of
product performance to sources of variations caused by
environmental or manufacturing differences.
For example, automotive designers use this technique to
determine which combination of suspension and tires
will produce the most desirable ride characteristics at
a reasonable cost
The technique is applied to the product of the project and the
project management issues.
4. Additional Quality Planning Tools:

Brainstorming,, matrix diagrams, flowcharts …………….

178
5. Cost of Quality:
Cost of quality refers to the total cost of all
efforts to achieve product/service quality, and
includes all the work to ensure conformance to
requirements, as well as all work resulting from
non-conformance to requirements.

Cost of Quality
Cost of conformance:
Prevention
Appraisal
Cost of Nonconformance:
Internal failures (in house) ( under control)
External failures (customer / field)

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Cost of Quality
Cost of Conformance
1. Prevention cost:
Quality training
Quality auditing
Survey of vendors / suppliers
Survey of subcontractors
Cost of Quality
Cost of Conformance
2. Appraisal Cost:
Inspection and testing of the products
Maintenance of inspection and test equipment
Cost to process and report inspection data
Laboratory testing
Internal design review and walk through

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Cost of Quality
Cost of Nonconformance
1. Internal Failure Cost:
Scrap and rework
Charges related to late payment of bills
Inventory costs
Engineering change cost related to correcting a
design error
Correcting documentation

Cost of Quality
Cost of Nonconformance
2. External Failure Cost:
Complaints
Warranty cost: cost of repair or replacement.
Product rejected and returned.
Concessions ‫ﺗﺮﺧﻴﺺ‬
Future business losses.
Product recall costs
Product liability
181
The Cost of Quality before & after TQM
Saving 50%
of the total
in 3 years
Failure Cost
%75
Failure Cost
Appraisal Cost Appraisal Cost
23% 10 – 15%
Prevention cost Prevention cost

2% max. 10 – 15%
Cost of Poor Quality

Perform Quality Assurance (QA)

Evaluating overall project performance on a regular
basis to provide confidence that the project will
satisfy the relevant quality standards
It is a system for prevention.
It should be performed throughout the project.
It is often provided by a Quality Assurance Department
It may be:
Internal: provided to the performing organization.
External: provided to the customers and others not involved
in the work of the project.

182
8.2 Perform Quality Assurance
Quality management plan “application of planned, Requested changes
Quality metrics systematic quality activities to Recommended corrective
Process improvement plan ensure that the project will actions
Work performance employ all processes needed to Organizational process
information meet requirements” assets (updates)
Approved change requests Project management plan
Quality control measure- (updates)
ments TOOLS & TECHNIQUES
Implemented change Quality planning tools and tech-
requests nique
Implemented corrective Quality audits
actions Process analysis
Implemented defect repair Quality control tools and techni-
Implemented preventive ques
actions

Perform Quality Assurance, Tools & Tech.
2. Quality Audit:
A quality audit is a structured review of the
management activities. It is used to:
Determine whether quality activities and related results comply
with the planned arrangements.
Determine whether the arrangements are implements effectively
and are suitable to achieve objectives
Identify lessons learned that can improve performance
May be scheduled or random
Carried out by trained in-house auditors or by third parties such
as registration agencies

183


how to measure
them

Perform Quality Control (QC)
Monitoring results to determine if they

comply with relevant quality standards and
identifying ways to eliminate causes of
unsatisfactory.
Focuses on: measuring correction
It should be performed throughout the project
Performed by a quality control department
Project results are deliverables and management results,
such as cost and schedule performance

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Perform Quality Control
Prevention:
Keeping errors out of the process
Inspection:
Keeping the errors out of the hands of the customer
Attribute sampling:
The result conforms or it does not
Variables sampling:
The result is rated on a continuous scale that measures
the degree of conformity
Tolerances:
The result is acceptable if it falls with the range
specified by the tolerance
Control Limits:
The process is in control if the result falls within the
control limits (upper limit & lower limit).

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(Random ) Common Cause Variations

Include poor lots of raw material, poor product
design, work conditions being unsuitable, and
equipment that cannot meet design tolerances.
These causes are beyond the control of workers on

the floor.
For improvement, Management actions are required.

Assignable (special) causes:

Include lack of knowledge by workers, workers
mistakes, or workers not paying attention during
production.
These causes can be identified by workers on the

shop floor and corrected.
Workers can eliminate only special cause variability

186
8.3 Perform Quality Control
“monitoring specific project
Quality management plan Quality control measurements
results to determine if they
Quality metrics Validated defect repair
comply with relevant quality
Quality checklists Quality baseline (updates)
standards and identifying ways to
Organizational process Recommended corrective
eliminate causes of unsatisfactory
assets actions
results”
Work performance informa- Recommended preventive
tion actions
Approved change requests TOOLS & TECHNIQUES Requested changes
Deliverables Cause and effect diagram Recommended defect repair
Control charts Organization process assets
Flowcharting (updates)
Histogram Validated deliverables
Pareto chart Project management plan
Run chart (updates)
Scatter diagram
Statistical sampling
Inspection
Defect repair review

Perform Quality Control, Tools & Tech.
Cause and Effect Diagram - Ishikawa
People organization information materials
Major
Defect
Policy methods equipment environment
Causes Effect

187
Control Charts
Graphic displays of the results, over time, of a process;
used to assess whether the process is in control
Identify the allowable range of variation for

particular product characteristic
The process average is the mean of the averages for

the samples taken over a long period of time

Control Charts
1. Upper & lower control limit
2. Assignable cause
3. The process is out of control
4. Rule of seven
5. Specification limits
3 2
5
1
4
1
5

188
Quality Control
Using Standard Deviation

• Mean (μ) – Average
• Variance – Sum of squared differences between mean

and each value, (x- μ)2, divided by number of samples
less one or (9-1=8)
• Standard deviation – Square root of the variance
• Upper control limit (UCL) = (μ) +Three standard

deviations
• Lower control limit (LCL) = (μ) -Three standard

deviations
Normal Distribution
-1σ +1 σ
-2 σ +2 σ
-3σ μ +3 σ
68.26%
95.46%
99.73%
LCL UCL
189
Quality Control
Example of Standard Deviation

Item Weight (x) (x-μ)2
1 4.9 0.02778
2 5.0 0.00444
3 5.1 0.00111
4 5.2 0.01778
5 5.3 0.05444
6 5.5 0.18778
7 4.7 0.13444
8 4.8 0.07111
9 5.1 0.00111
Total 45.6 0.50000
• Mean (μ) = 45.6 / 9 = 5.066; (rounded to 5.07)

• Variance – Sum of squared differences between mean and each value, (x- μ)2,
divided by number of samples less one or (9-1=8); thus 0.5 / 8 = 0.0625
•
• Standard deviation – Square root of the variance;
thus 0.0625 = 0.25 Akram Al-Najjar, PMP,PSP
Quality Control
Example of Standard Deviation

• Mean (μ) = 45.6 / 9 = 5.066; (rounded to 5.07)
• Variance – Sum of squared differences between mean

and each value, (x- μ)2, divided by number of samples
less one or (9-1=8); thus 0.5 / 8 = 0.0625
• Standard deviation – Square root of the variance;

thus 0.0625 = 0.25
• Upper control limit (UCL) = Three standard

deviations; thus 3(0.25) + μ (or 5.07) = 5.82.
– The lower control limit (LCL) equals 5.07 - 3(0.25)=
4.32
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Flowcharting

Pareto Diagram
Histogram, ordered by frequency of occurrence, that
shows how many results were generated by type or
category of identified cause
Pareto's Law
A relatively small number of causes will typically
produce a large majority of the problems or defects
(80/20) principle, where 80 % of the problems are
due to 20 % of the causes.

191

Pareto Diagram
40 100
Percentage of Defective Cases

Number of Defective Cases
30 Cumulative 75
Percentage
20 50
Frequency by
10 cause 25
0 A B C D E F 0


Run Chart
Shows the history and pattern of variation.
Trend Analysis:
Using mathematical techniques to forecast future
outcomes based on historical results
Technical performance
How many errors or defects have been identified,
how man remain uncorrected?
Cost and schedule performance
How many activities per period were completed with
significant variances?

192
Statistical sampling
Choosing part of a population of interest for
inspection.
Inspection
Measuring, examining, and testing to
determine whether results conform with
requirements



how to measure
them

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PMP
Management

Chapter 9
Project
Human Resource
Management
195
AGENDA
Some term to be familiar with !

Human Resource Management Processes
What is Human Resource Management?
Human Resource Management?
Discussion

Human Resource Management includes the
processes required to make the most effective
use of the people involved with the project.
includes all the project stakeholders:
sponsors
customers
individual contributors
others
196
includes general HR topics such as:
Leadership
Delegation
Motivation
Organizational Behavior
Performance Measurement &

Appraisal
Mentoring & Coaching
etc. etc. etc.


Keys to Managing People
Psychologists and management theorists
have devoted much research and
thought to the field of managing people
at work
Important areas related to project
management include
motivation
influence and power
effectiveness
197
Motivation
Abraham Maslow developed a hierarchy
of needs to illustrate his theory that
people’s behaviors are guided by a
sequence of needs
Maslow argued that humans possess
unique qualities that enable them to
make independent choices, thus giving
them control of their destiny
Team Development
Maslow’s Hierarchy of Needs

Self-Actualization – Need to grow and use
abilities to the fullest and most creative extent
Higher Order Needs
Esteem - Need for respect, prestige, recognition,
sense of competence
Social – Need for love, affection, sense of
belonging
Lower Order Needs
Safety – Need for security, protection and
stability
Physiological – Need for biological
maintenance (food, water etc.)
198
Team Development
Maslow’s Hierarchy of Needs
Team Development
McGregor’s Theory
Douglas McGregor popularized the human relations
approach to management in the 1960s
Theory X: assumes workers dislike and avoid work, so
managers must use threats and various control
schemes to get workers to meet objectives
Theory Y: assumes individuals consider work as

natural as play or rest and enjoy the satisfaction of
esteem and self-actualization needs
Theory Z: introduced in 1981 and is based on the

Japanese approach to motivating workers, emphasizing
trust, quality, collective decision making, and cultural
values
199
Team Development
Hertzberg’s Motivation Theory
Hygiene
Pay; working conditions; boss’s attitude
Poor hygiene factors negatively impact
motivation
Good hygiene factors increase motivation
Motivators
Positive motivation leads to achievement and
self-actualization
Workers have a sense of personal growth and
responsibility

Power
Power is the potential ability to
influence behavior to get people
to do things they would not
otherwise do
200
Sources of Authority and Control: (Power)
• The PM must deal with upper management,
subordinates, functional managers, interface
personnel, and people outside the firm.
• The degree to which the PM can influence each of

these groups will have a bearing on the success or
failure of the project.
• The PM must exert some type of power so that the

necessary concessions or cooperation can be
obtained.

Sources of Authority and Control: (Power)
Formal:
A legitimate (or positional) form of power.
Based on a person's formal position in the company.
Reward:
Refers to positive consequences or outcomes that a person can offer.
Coercive (Penalty):
Refers to negative consequences that a person can inflict on others. (firing, docking,
reprimand, etc.)
Referent:
A form of personal power.
Refers to earned power when people admire a person and want to follow that person as a
role model. Also called charisma.
Expert:
A form of personal power.
Refers to earned power that a person acquires based on his/her technical knowledge, skill, or
expertise on some topic or issue.
201
Reward and Recognition Systems
Team-based reward and recognition

systems can promote teamwork
Focus on rewarding teams for achieving
specific goals
Allow time for team members to mentor
and help each other to meet project
goals and develop human resources
Leadership Styles!
Managing can be described as “consistently
producing key results expected by
stakeholders” while leading involves:
Establishing direction
Aligning people
Motivating and inspiring
Leadership must be demonstrated at all
levels of the project (project leadership,
technical leadership, and team leadership).
202
Leadership Styles (Cont’d)!
Leadership styles can come in several forms.
The most common names for these are:
Autocratic: Making decisions without taking time to

process input from others
Directing: Giving instructions; close supervision
Coaching: Giving instructions and explanations;
solicits input from others
Facilitating: Coordinating
Supporting: Providing assistance

Conflict Management
• The PM must carefully select the method of managing
conflict appropriate for his/her organization so that an
atmosphere conducive to constructive results is
developed.
• Five methods of managing conflict:

Withdrawal
Smoothing
Compromising
Forcing
Problem Solving (confrontation)
203
Seven Sources Of Conflict
• Schedules
• Project Priorities
• Resources
• Technical opinions
• Administrative Procedures
• Cost
• Personality
The exam may ask for the top sources of conflict. So it would be useful to
know the top four. Since many project managers think that number 1 is
personality conflict. You can expect the exam to include questions with that
choice.

Conflict Management
Withdrawal:
• Retreating from actual or potential disagreements and conflict
situations.
• A temporary tactic: does not resolve the conflict, only delays it.
Smoothing:
Keeps the atmosphere friendly.
A temporary tactic: does not resolve the conflict, only delays it.
Should be used in conjunction with another method.
Compromising:
• Considers various issues and searches for solutions which bring
some degree of satisfaction to the conflicting parties.
• This method is considered to be a lose-lose. Both parties must
give up something that is important to them; however, this
method usually provides some acceptable form of resolution.
204
Conflict Management
Forcing:
• Pushing one viewpoint at the expense of another party.
• This method provides resolution but is considered to be a win-lose.
Problem Solving: (confrontation)
• Directly addresses disagreements.
• Conflict is treated as a problem. The problem is defined; information is
collected; alternatives are identified and analyzed, and the most
appropriate alternative is selected.
• Theoretically considered the best because both parties can be satisfied if
they work together to solve the problem.
• Both parties must want to solve the problem and be willing to work
together.
•This method is considered to be a win-win.
Project Human Resource

Management
Includes the processes that organize and
manage the project team to make most
effective use of the people involved with
the project.
1. Human Resource Planning

2. Acquire Project Team
3. Develop Project Team
4. Manage Project Team
205
206
Source: pmbok guide 2000 Slide 1

Human Resource Management
Planning Executing Mon. & Control
9.2 9.3 9.4

9.1
Human
Acquire Develop Manage
Project project project
Resource
Team
Planning team Team
Source: pmbok guide 2000 Slide 23 +20105394312
Human Resource Planning
Determines project roles, responsibilities,

,reporting relationships and creates the
staffing management plan.
Individuals and groups may be part of the

organization performing the project or
may be external to it.
Internal groups are often associated with a
specific functional department, such as
engineering, marketing, or accounting
207
1. Tools & Techniques
2. Organization Charts &
Position Descriptions
3. Networking
4. Organizational theory
Inputs 1. Outputs
1. Enterprise Environmental 2. Roles and responsibilities
Factors 3. Project Organization Charts
2. Organizational Process Assets 4. Staffing management plan
Inputs
Enterprise Environmental Factors:
Project interfaces: Formal and informal relationships
among the various organizational units, technical
disciplines ,and individuals involved with the project work ,
Logistical & Political
constraints: Organizational structure, collective barging
agreements and competencies of expected staff that may
impact organizational planning
Organizational Process Assets:
Templates : Boilerplates or models that can be
modified or used as is, to document roles and
responsibilities and reporting relationships from
previous or similar.
Project Management Plan– The skills required to do
the project and when those skills are required
description of project management activities.
208
Tools & Techniques

Organization Charts and Position :Documentation of roles
and responsibilities
Networking– Informal interaction with others in an
organization or industry is a constructive way to understand
political and interpersonal factors that will impact the
effectiveness of various staffing management options.
Documenting requirements to ensure needs rereading
organizational planning are met. Often performed using
networking.
HR practices – Variety of policies, guidelines, and procedures

used as human resources planning aid
Organizational theory – Body of literature describing how an

organization can, and should, be structured
Outputs
Roles and responsibilities –
Roles (who does what , Examples of project roles are civil
engineer) and responsibilities (who decides what , The work
that a project team member is expected to perform in order
to complete the project’s activities.) assigned to the
appropriate stakeholder
Authority The right to apply project resources, make

decisions, and sign approvals
Competency: The skill and capacity required to complete

project activity
209
Outputs
Outputs (cont.)
Organization Chart – Graphic display of project reporting
relationships. (OBS) indicates which organizational unit is
responsible for which work items
Staffing Management Plan – Describes when and how human

resources will be brought onto, and taken off, of the project team
Staff acquisition - when planning resources
Timetable – optimizing the use of people on the project
Release criteria – method and timetable for release
Training needs – training plan
Recognition and rewards – incentives to meet milestones and deliverables
Compliance – with regulation , union or standard should stipulated I the plan
Safety
210
Resource Histogram
300
Senior Designers
275
250
225
Resource Usage
200
175
150
125
100
75
50
25
0
9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22
Jan Feb Mar Apr May
Resource Usage Staff Hours anajjar@pmihouse.org

Acquire Project Team
Acquire Project is the process of

obtaining the human resources
needed to complete the project.
211
Tools & Techniques
1. Pre-assignment
2. Negotiations
3. Acquisition
4. Virtual teams
Inputs
factors Outputs
2. Organizational process 1. Project staff assignment
assets 2. Resource availability
3. Roles and responsibilities 3. Staffing management plan
4. Project organization charts (updates)
5. Staffing management plan
Inputs
1. Enterprise environmental factors
Availability -
Ability What - competencies do people possess?
Experience
interests
Cost
2. Organizational Process Assets

policies, guidelines, or procedures governing staff
assignments. resource departments also can assist with
recruitment, hiring and orientation of project team members.
212
Tools & Techniques

Pre-assignment
Staff have been assigned because they were promised in the
proposal or were defined in the project charter
Negotiations
Acquisition
People outside the organization obtained to perform project
activities
Virtual teams
A group of People with a shared goal who fulfill their role
with little or no time spent meeting face to face.
Output
Project staff assignment
The assignment of people who will work on the
project, full-time, part time, or as needed
Resource availability
A schedule of time team members can spend
working on the project
Staffing management plan (update)
Due to promotions, retirements, illnesses,
performance issue, workloads, and expertise
213
Develop Project Team
Develop project team improve the
competencies and interaction of
team members to enhance project
performance.
Objectives:-
Improve skills of team members.
Improve feelings of trust and cohesiveness among
team members in order to raise productivity
through greater teamwork.
The four stages of development new project team:

Forming - It’s the beginning stage of team formation
when all the members are brought together,
introduced, and told the objectives of the project.
This is where team members learn why they’re
working together. During this stage, team
members tend to be formal and reserved and take
on an “all business” approach.
Storming - This stage is where the action begins.
Team members become confrontational with each
other as they’re vying for position and control
during this stage. They’re working through who is
going to be the top dog and jockeying for status.
214
The four stages of development new project team:

Norming - In this stage, team members confront the
project concerns and problems instead of each
other. Decisions are made jointly at this stage,
and team members exhibit affection and
familiarity with one another.
Performing - This stage is where the team is
productive and effective. The level of trust among
team members is high, and great things are
achieved. This is the mature development stage.
Different teams progress through these stages at
different rates.

Tools & Techniques
1. General management skills
2. Training
3. Team-building activities
4. Ground rules
5. Co-location
6. Recognition and rewards
Inputs
1. Project Staff
Outputs
assignments
1. Team performance
2. Staffing management
assessment
plan
3. Resource availability
215
Tools & Techniques

General management skills - Soft skills which can help project manager to prevent
and/or resolve team issues, leadership , communication , delegating ….etc
Training
Team-building activities
Include management and individual actions taken to improve team performance
(Five-minute agenda item in a status review meeting to an off-site)
Ground rules
Rules describing clear expectation as to the expected code of conduct from team
members.
Co-Location – Establishment off a common physical location for a project team in War
room
Rewards and recognition system
A formal method used to reinforce behaviours or performance
Output
Team performance assessment
The informal and formal assessments of the project team’s

effectiveness.
The evaluation of the project team’s effectiveness can include
indicators such as:
a) Improvements in skills ---> more effectiveness
b) Improvements in competencies and sentiment- ---> perform
better as group
c) Reduce staff turnover rate.
216
Manage Project Team
Manage project team involves tracking

team member performance, providing
feedback, resolving issues and
coordinating changes to enhance
project performance.
Manage Project Team

Tools & Techniques
1. Observation and conversation
2. Project performance appraisals
3. Conflict management
4. Issue log
Inputs Outputs
1. Organization process 1. Requested changes
assets 2. Recommended corrective
2. Project staff assignments actions
3. Roles and responsibilities 3. Recommended preventive
4. Project organization chart actions
5. Staff management plan 4. Organization process assets
6. Team performance (updates)
assessment 5. Project management plan
7. Work performance (updates)
information
8. Performance reports anajjar@pmihouse.org
217
Manage Project Team
Tools & Techniques

Observation and conversation
Are used to stay in touch with the work and attitudes of project team
members.
Project performance appraisals , Objectives for conducting
performance appraisals during the course of a project can include
re-clarification of roles and responsibilities,
Evaluation information can be gathered from:
The people who supervise their project work and who interact with
project team members by using 360 degree feedback principle .
Issue log
A written log can document persons responsible for resolving specific
issue by a target date.
Conflict management
Manage Project Team
Output
Organization process assets (updates)
Inputs to organizational performance appraisals
Lesson learned documentation
Project organization charts, position descriptions, and
staff management plan.
Ground rules, conflict management techniques.
Procedures for virtual teams, co-location, negotiation
and training
218
Project Human Resource Management

?
219
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220
PMP
Management
Akram Alnajjar , PMP , PSP
Effect of poor communication
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221
Chapter 10
Project
Communication
Management
+20105394312
AGENDA

What is Communication Management?
Communication Management Processes
Communication Management?
Discussion
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222
Transmission of information and meaning
from one person to another or to a group
Introduction of people
I know that you

believe you
understand what
you think I said, But
I am sure that you
realize that what you
heard is NOT what I
meant
Information must be
properly interpreted
Effect of poor communication
223
Why Communication is
Important
90% of Project Manager’s time is spent
communicating
Introduction
Main function of the Project Manager is to:

¾ Manage the information needs of project
stakeholders
¾ Ensure the information is properly interpreted
Information is power – need to use

properly to achieve project goals
Proper information management is a major
key to project success
Misunderstandings from communication are
a major source of conflict
+20105394312
Basic Elements of
Communication
Sender Originator of an idea
Introduction
Encoding Translating ideas into words
Medium Method used to

communicate the message
Receiver Person who receives the

message
Decoding Translating the words into

ideas (meaning)
Feedback Report to the sender on the

message anajjar@pmihouse.org
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224
The Communication Model
Sender Receiver
The sender or source thinks Decode the message

and then encodes his/her Medium and turn it into an idea
Introduction
idea and turns it to a

message
S/he determines the Confirm that the
appropriate method Verbal message is
(formal/informal) or understood
Written
Send the message Give feedback
Confirm that the message is

understood
Feedback
Barriers to Communication
Amount of information
¾ Follow KISS principle (keep it simple, short)
Introduction
Equal knowledge on subject

Cultural differences
Filtering
Perceptions
Message competition
Project jargon, technical
Method of sending message
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Communication
Medium
Methods of communication
Introduction
Telephone calls
Voice mail
Email
Fax
Informal visits
Formal meetings
Formal presentations
Hand written notes
Formal correspondence
Formal reports anajjar@pmihouse.org
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Listening Model
Factors which impact listening
Message
Introduction
Sender >>> Channel >>> Receiver
The Environment
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Active Listening
Pay attention to the speaker

Be patient
Focus on the content not the delivery
Take notes
Listen for hidden messages
Listen to understand
Show the speaker that you are listening
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Meetings
An efficient way to share information

Clarify directions and ambiguities
Introduction
Coordinate project team efforts

Obtain immediate feedback on project
issues
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227
Meetings
Managing meetings effectively

Introduction
Before the meeting:

¾ Determine the purpose of the meeting
¾ Set rules for discussion
¾ Determine who needs to attend and invite
them, don’t invite others
¾ Advise participants well before the meeting of
the purpose, location, and time
¾ Distribute the agenda before the meeting
+20105394312
Project Communications
Management
Processes required to ensure timely and
appropriate generation , collection, dissemination,
storage, and, ultimately disposition of project
information
Communications Planning
Information Distribution
Performance Reporting
Manage Stakeholders
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229
Communication Management
Planning Executing Controlling
10.1
Communications 10.3
Planning Performance
Reporting
10.2
Information
Distribution 10.4
Manage
Stakeholders
+20105394312
Determining the information and

communications needs of the stakeholders:
who needs what information, when they will
need it, and how it will be given to them
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230
Tools & Techniques
• Communications
requirements Analysis
• Communication technology
Inputs
Factors
• Organizational Process Outputs
Assets • Communication
• Project Scope Statement management plan
Constrains & Assumption anajjar@pmihouse.org
+20105394312
Inputs
Enterprise Environmental Factors
All the factors described in Section 4.1.1.3 are used as inputs for
this process.

lessons learned and historical information are of particular
importance.
Project Scope Statement : (Section 5.2.3.1)
Project Management Plan : Constraints and
Assumptions
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231
Tools & Techniques

Communications requirements Analysis –
The sum of the information requirements of
the project stakeholders and defined by:
- Combining - “Type and Format” with: “Analysis of the Value ”
Communication requirement includes:
- Project Organization chart, stakeholder Responsibility relationships
- Disciplines, departments, specialties involved
-Logistics (number of, where) How many individuals and locations
-Internal information needs
- External needs - Media
Requirement
+20105394312
Tools & Techniques

Communication technology – Used to
transfer information back and forth among
project elements
-Conversations
-documents Expected Project Staffing
Availability of -on-line schedules
Technology -databases
-etc..
Length of the Project

Urgency of the need
project environment. +20105394312
232
Outputs
Communication management plan – provides:
Collection and filing structure – Methods used to
gather, update, and store various types of information
Distribution structure – Specifies to whom
information will flow and what method will be used to
distribute various types of information.
Description of information to be distributed –
Includes format, content, level of detail, and
conventions and definitions to be used
Production schedules – Showing when each type of
communication will be produced
Methods for accessing information
Method of updating and refining the
communication management plan as the project
progresses
+20105394312
Outputs
Sample attributes of a communications management plan can
include:
Communications item. The information that will be distributed to
stakeholders.
Purpose. The reason for the distribution of that information.
Frequency. How often that information will be distributed.
Start/end dates. The time frame for the distribution of the
information.
Format/medium. The layout of the information and the method of
transmission.
Responsibility. The team member charged with the distribution of
information.
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233
Create list of stakeholders

Determine each of their information needs
Example ¾ What information they need, how often, what method
Stakeholder Information Frequency Method
Need
Owner Status Every month E-mails
reports
Environmental Impacts to Once a year Public
Groups environment meetings
Contractor Approvals, Every week Site meetings

changes
Adjacent Impact on At Newsletter
Residents them milestones
Municipality Permits At On-site
milestones reviews +20105394312
Exercise #1
You are assigned as the project manager on a

new project .
In your groups, discuss and record on the flip
chart the communication plan for your project
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234
Making needed information available to project

stakeholders in a timely manner
• Includes implementing the communications

management plan, as well as responding to
unexpected requests for information
+20105394312
Figure 10-1. The Impact of the Number of People on

Communications Channels
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235
Tools & Techniques
• Communications skills
• Information-retrieval
systems
• Information-distribution
methods
• Lesson Learned Process
Inputs
• Communication Outputs
management plan • Organizational Process
assets (updates)
+20105394312
Tools & Techniques

Communications skills – Skills for
exchanging information
Written, oral, listening, and speaking
Internal and external communication
Formal (reports, briefings) and informal
(memos, ad-hoc conversations)
Vertically, (up and down the organization),
and horizontally, (with peers)
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236
Tools & Techniques (cont.)

Information-retrieval systems – Information can be shared
by team members and stakeholders through a variety of
methods including
Manual filing systems, electronic-text databases, project
management software, and systems which allow access to
such technical documentation as engineering drawings
• Manual Filing
• Electronic Database
• P.M. Software
• Drawings
Information-distribution Methods – Methods such as project
meetings, hard-copy document distribution, shared access to
networked electronic databases, fax, electronic mail, voice mail, and
video conferencing
Lessons Learned Process

A lessons learned session focuses on
identifying project successes and project
failures, and includes recommendations to
improve future performance on projects.anajjar@pmihouse.org
+20105394312
Outputs
Project Records – Organized storage and
maintenance of correspondence, memos, reports, and
documents describing the project
Project reports – Formal project reports on project

status and/or issues
Project presentations – Provide information formal

or informally to any or all of the project stakeholders
Feed back from stakeholder and stakeholder notifications
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237
Collecting and disseminating performance
information to provide stakeholders with
information about how resources are being
used to achieve project objectives
This includes status reporting (describing where the

project now stand) , progress reporting (describing
what the project team has accomplished) , and
forecasting reporting (predicting future project status
and progress )
Provides information on scope, schedule, cost, and
quality, and possibly on risk and procurement
+20105394312
Tools & Techniques
• Information Presentation Tools
• Performance Information
Gathering and Compilation
• Status Review Meetings
• Time Reporting Systems
• Cost Reporting Systems
Outputs
• Performance reports
Inputs • Forecasts
• Work Performance Information
• Requested Changes
• Performance Measurements
• Recommended Corrective Actions
• Forecasted Completion
• Quality Control Measurements • Organizational Process Assets (Updates))
• Approved Change Requests
• Deliverables
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238
Performance Reporting, Inputs
• Deliverables
Are any unique and verifiable or product, or
result to perform a services that must be
product to complete a process, phase or project
+20105394312
Performance Reporting, Tools and Techniques

Performance Information Gathering and Compilation: Information can
be gathered and compiled from a variety of media including manual
filing systems, electronic databases, project management software, and
systems that allow access to technical documentation, such as
engineering drawings, design specifications and test plans, to produce
forecasts as well as performance, status and progress reports.
Status Review Meetings: Status review meetings are regularly scheduled
events to exchange information about the project. On most projects,
status review meetings will be held at various frequencies and on
different levels. For example, the project management team can meet
weekly by itself and monthly with the customer.
Time Reporting Systems : Time reporting systems record and provide time
expended for the project.
Cost Reporting Systems : Cost reporting systems record and provide the
cost expended for the project.
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239
Outputs
Performance report – Organizes and
summarizes the information gathered and
presents the results of any analysis. Reports
should provide the kinds of information and
the level of detail required by various
stakeholders and documented in the
communications management plan
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Outputs
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240
Earned-value analysis – Integrating scope, cost,

and schedule measures to assess project
performance
Planned
planned value = BCWS
Actual
Actual costs = ACWP
Earned Value
Earned value = BCWP
BCWP
Task A, which I was supposed to complete today, is
scheduled to cost $1000. I am only 85% done on
this task. So, I have done $850 worth of work…
which is my earned value (BCWP) anajjar@pmihouse.org
+20105394312
Case 2 In this Case, without

Earned Value
measurements, it
PV = $ 1,900 appears we’re in good
shape. Expenditures
AC = $ 1,700 are less than planned.
Spending Variance =- $ 200
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241
Case 2
But with EV measurements,
we see...$400 worth of work
PV = $ 1,900 is behind schedule in being
completed; i.e., we are 21
percent behind where we
EV = $ 1,500 planned to be.
AC = $ 1,700
SV = EV – PV =- $ 400
SV % = SV / PV x 100 =- 21 %
+20105394312
Outputs
Performance report
8.E+07
7.E+07
Value .
6.E+07
5.E+07
4.E+07
3.E+07
2.E+07
1.E+07
0.E+00
2
2
2
02
02
l-0
-0
-0
-0
n-
planned value
p
ay
ar
ov
Ju
Se
Ja
Earned value
Time +20105394312
Actual Cost
242
Manage Stakeholders
Stakeholder management refers to managing

communications to satisfy the needs of, and
resolve issues with, project stakeholders.
+20105394312
Manage Stakeholders
Tools & Techniques
• Communications Methods
• Issue Logs
Outputs
Inputs • Resolved Issues
• Communications • Approved Change Requests
Management Plan • Approved Corrective Actions
• Organizational • Organizational Process
Process Assets Assets (Updates)
• Project Management
Plan (Updates)
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243
Manage Stakeholders
Tools and Techniques

Communications Methods :
Face-to-face meetings
Telephone Calls
Electronic Mail
Issue Logs
Is a tool that can be used to document and monitor
the resolution of issues. Issues do not usually rise to
the importance of becoming a project or activity, but
are usually addressed in order to maintain good,
constructive
working relationships among various stakeholders,
including team members.
+20105394312
Manage Stakeholders
Output
Resolved Issues
As stakeholder requirements are identified and
resolved, the issues log will document concerns that
have been addressed and closed. examples include:
Customer agree to a follow on contract
More staff is added to the project
Negotiation with function managers
Issues raised by board members
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Any questions
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Chapter 11
Project Risk
Management

Source: pmbok guide 2004 Slide 1 anajjar@pmihouse.org +20105394312
Risk
A risk is an uncertain event that either a positive or negative effect on the

project.
Its primary components are a measure of probability that a risk occur and
the impact of the risk on a project.

247
Risks Tolerance
Risk tolerance address the level of risk a project manager or key stakeholder
is willing to take when money at stake is compared to the potential payoff.
It’s measured in terms of the amount of satisfaction or pleasure the
individual receives from payoff.
Risk tolerance can be classified as risk-averter , risk-seeker , and risk-neutral
Risk averter : Not likely to take a risk that is considered a high risk
Risk seeker : Prefers an uncertain outcome and may be willing to pay a

penalty to take a high risk.
Risk neutral : Tolerance to risk is proportional to the amount of money at

stake
Project Risk Management

Project Risk Management includes the processes concerned with conducting
Risk management planning, identification, analysis, responses, and
monitoring and control on a project; most of these processes are updated
throughout the project.
The objectives of Project Risk Management are to increase the probability
and impact of positive events, and decrease the probability and impact of
events adverse to the project.
11.1 Risk Management Planning
11.2 Risk Identification
11.3 Qualitative Risk Analysis
11.4 Quantitative Risk Analysis
11.5 Risk Response Planning
11.6 Risk Monitoring & Control

248
249
Risk Management
Planning
Risk management planning is the process of deciding how to approach and

plan the risk management activities for a project ,
•First , we identify project charter , current policies , roles , risk tolerance ,

the project management plan , and any templates for risk management.
•Then we perform an analysis on inputs.
•Finally , we output the risk management plan.

Risk Management Planning

Tools & Techniques
• Planning Meetings &
analysis
Inputs
9 Enterprise environmental factors
9 Organizations process assets Outputs
9 Project scope statement
¾ Risk Management Plan
9 Project management plan

250
Output: Risk Management Plan
Describes how risk management will be

structured and performed on the project
Timing
Methodology
Budgeting
Categories
Roles and
Responsibilities
Reporting Probability & Tracking
Formats Impact Matrix
Revised
stakeholders’
tolerances Akram Al-Najjar, PMP,PSP
Risk Management Planning

Output
Risk categories
Risks that may affect the project for better or worse can be
identified and organized into categories (RBS)
Macro Project Managerial

Environment Target Team
Market Design Control
Political Procurement Funding
Financial Technical Contractual
Social Job Site
Act of God

251
Risk Management Planning Output
Templates for scoring and interpretation

Risk Management Planning Output

252
Risk Management Plan
Describes how risk management will be

structured and performed on the project
Timing
Methodology
Budgeting
Categories
Roles and
Responsibilities
Reporting Probability & Tracking
Formats Impact Matrix
Revised
stakeholders’
tolerances Akram Al-Najjar, PMP,PSP
253
Risk Identification
•Risk Identification is the process of identifying and

documenting the characteristics of project risks.
•First , you review the Risk management plan , project planning output
, risk categories, and any historical information.
•You then perform analysis using such tools as documentation reviews

, checklist , information gathering , assumption analysis, and
diagramming techniques.
•Finally , you output the risk register. Initial risk identification may be
done at the macro level
Risk Identification
Tools & Techniques
• Documentation reviews
• Information-gathering
techniques
• Checklists analysis
• Assumptions analysis
• Diagramming technique
Inputs
9 Enterprise Environmental
Factors
9 Organizational Process Assets Outputs
9 Project Scope Statement ¾ Risk Register
9 Risk Management Plan
9 Project Management Plan
254
Information-Gathering Techniques
Interviewing ( Nominal Group Technique)

Information-Gathering Techniques
Delphi Technique

255
Project Risk Identification
Tools and Technique
Documentation review: Structured review of project plans and related
documents at both the total project and detailed scope level.
Information gathering technique :methods used to collect data that will

assist the project team in identifying risks :
-Brainstorming , Delphi technique , interviewing and SWOT analysis
Checklists : developed bases on historical information and provide a quick ,

simple , and standardizes way to identify risk.
Assumption analysis : technique used to explore the validity of project

assumptions.
Diagramming technique : Cause and effect diagram , System or process

flow charts, Influences diagram
Risk Categories
Divisions into which project risks can be grouped to reflect
common sources of risk for a specific project, industry, or
application area.
Risk Categories
Technical, quality, or performance risks
Project management risks (time , resources , and cost
estimate )
Organizational risks (funding , conflicts and management
support )
External risks ( Union , security issues …etc)

256
Project Risk Identification
Output
Risk register
List of identified risk
List of potential responses
Root causes of risk
Update risk categories


257
Risk Identification
Exercise #1
You are the project manager on the case study

project. As a team, outline some potential risk
on the project, using the following template.
Risk Category

Qualitative Risk Analysis

It is the process of assessing the probability and
impact of the identified risks and prioritizing them
according to their effect on project objectives.
Initially , you gather the risk management plan, risk register,
and any relevant project documentation .
Then , you analyze each risk using such tools as risk

probability and impact , probability / impact risk rating matrix
, project assumption testing , data precision ranking , and
urgency.
Finally , you enter any alterations into the risk register.

258
Tools & Techniques
Risk probability & impact assessment
Probability & impact matrix
Risk data quality assessment
Risk categorization
Risk urgency assessment
Inputs
9 Organizations process assets Outputs
¾ Risk Register
update
9 Risk register

Output
Risk categories
Risks that may affect the project for better or worse can be
identified and organized into categories (RBS) and Ranked
Macro Project Managerial
2.5 3 3.5
Environment Target Team
Market Design Control
Political Procurement Funding
Financial Technical Contractual
Social Job Site
Act of God

259
Output
Risk register (updates)

Relative ranking or priority list of project risks.
Risks grouped by categories.
List of risks requiring response in the near-term.
List of risks for additional analysis and response.
Watch lists of low priority risks.
Trends in qualitative risk analysis results.


260

261
Risk Analysis
Exercise #2
You are the project manager on the case study

project. The team has identified possible risks
on the project.
Conduct a Probability and Impact Matrix

of risks using the previous concept and record
on the flip chart.

Quantitative Risk Analysis

It is the process of numerically assessing the
probability and impact of each risk and
determining the extent of the overall project
risk.
Initially , you gather previous document indicating risk
planning, project scope , as well as the risk register.
Then , you analyze each risk using such tools as
interviewing , probability distributions , sensitivity analysis
expert judgement expected monetary value analysis ,
decision tree analysis and simulation.
Finally , you enter any alterations into the risk register.

262
Tools & Techniques
• Data gathering and
representation techniques
• Quantitative risk analysis and
modeling techniques
Inputs
9 Organizations process assets
9 Risk register Outputs
9 Project management plan ¾ Risk Register
-Project schedule management update
plan
-Project cost management plan

Tools and Technique
Data gathering and representation
techniques
Interviewing
Expert judgment

263
Quantitative Analysis Methods
Sensitivity Analysis
Expected Monetary Value
Decision Tree Analysis
Modeling and Simulation

Sensitivity analysis Æ which risks

have the most impact on the project
It is a method of assessing the relative impact of changing a
variable in a project to gain insight of the possible outcome of
one or more potential courses of action, Sensitivity analysis
places a value on the effect of changing a SINGLE VARIABLE
within a project by analyzing the effect on the project plan.
1. Begin with your original time or cost estimate.
2. Break out the components of the estimate into manageable
chunks.
3. Determine the variable to investigate and identify its likely
range of variation.
4. Calculate and assess the impact of changing the range of
results on the overall project estimate for each value in the
range.

264
Quantitative Risk Analysis,
Tools & Tech.
Expected Monetary Value (EMV) is a method of calculating the
average out come when the future is uncertain.
Probability
Status Payoff
%
Good Market – Good Quality 80,000 15
Good Market – Poor Quality 50,000 45
Poor Market – Good Quality 20,000 25
Poor Market – Poor Quality -20,000 15
Expected Payoff for good market = 80,000*0.15 + 50,000*0.45 = LE 34,500
Expected Payoff for good quality = 80,000*0.15 + 20,000*0.25 = LE 17,000
EMV = 80,000*0.15 + 50,000*0.45 +20,000*0.25 + (-20,000)*0.15 = LE 36,500

Decision Tree
265
Quantitative Risk Analysis, Tools &
Tech.
Modeling & Simulation

Establish a model
Use the model to study the uncertainties
specified at a detailed level using impact on
project objectives
Monte Carlo technique
Cost Risk Analysis use WBS as Model
Schedule Risk Analysis use PDM, AON as Model

Quantitative Risk Analysis, Tools &

Tech.

266
Quantitative Risk Analysis, Tools & Tech.
Cost Risk Simulation Total project Cost

Cumulative Chart
1.000
Mean 46.67
Probability
.750
.500
.250
12%
.000
$ 41 $ 50
30.00 38.75 47.50 56.25 65.00
Cost $


267

268
Quantitative Risk Analysis,
Outputs

Probabilistic analysis of the project.
Probability of achieving cost and
time objectives.
Prioritized list of quantified risks.
Trends in quantitative risk analysis
results.

Risk Response planning

Risk response planning is the process of examining
each risk and corresponding response alternatives ,
determining which response will improve the likelihood of
a positive outcome.
First , you review the risk management plan and risk register ,
which were updated with previous risk management planning
outputs.
Then , you employ an appropriate technique for each risk ,
either avoidance , transference , mitigation , acceptance or
exploitation .
Finally , you enter any alternation into the risk register , risk
response plan or the necessary project documentation.

269
Tools & Techniques 1-
• Strategies for negative risk or

threats
• Strategies for positive risk or
opportunities
• Strategies for both threats and
opportunities
• Contingent response strategy
Outputs
Inputs ¾ Risk register (updates)
9 Risk management plan ¾ Project management
9 Risk register plan (updates)
¾ Risk-related
Contractual agreements
Risk Response Strategies
Mitigation
(Corrective action)
Avoidance Acceptance
(Prevention) (Accept consequences)
Transference
(Shift Responsibility)

270
Tools and Technique
1. Strategies for negative risk or threats
2. Risk Avoidance : it is involves changing the project plan to
prevent a potentially detrimental risk condition or event from
happening. One way to eliminate a risk is to reduce or change
the scope of the project in an attempt to avoid high risk
activities. The scope change could involve the requirements or
specifications , or it can mean changing the approach to
meeting the requirements or specifications.
Example : The product description for an elementary social sciences
education multimedia program references stock video clips of children
riding bikes and roller skating without helmets or knee pads. During
risk identification , the project team reviewed the product description
and identified a potential risk of school administration not buying the
program because it appears to advocate unsafe activities. Viewing
this as a high risk , the team avoided this risk by changing the project
scope so that it did not include the videos.
Strategies for negative risk or threats
2. Risk transference : is involves shifting the impact of a risk

event and ownership of the risk response to a third party. This
strategy typically is used in connection with financial risk
exposure and most often involves payment of a risk premium
to the party assuming the risk.
Example: Risk sharing is a form of risk transference in which only a
portion of the risk is transferred to another party. For instance ,
organization often transfer responsibility for the risk of an employee
getting injured on the job by paying a premium for worker’s
compensation insurance. The insurance company assumes liability of
the risk and is responsible for covering the injured worker’s medical
bills and / or partial wages depending on the circumstances.
Because the initial organization has transferred part of the financial
liability to the insurance company and they now share the risk. This
would be an example of both risk sharing and risk transference.

271
Strategies for negative risk or threats
3. Risk mitigation: Is attempts to reduce the probability or impact

of a potential risk event to an acceptable level. Mitigation may
involve implementing a new courses of action in an effort to
reduce the problem or changing the current conditions so that
the probability of the risk occurring is reduced. Sometimes ,
when reducing the probability is not possible, the focus must
be on reducing the consequences of the risk event.
Example:
An example of risk mitigation is the develop of design model , or
prototype, the earlier this can be done in a project, the lower the risk
, Mock-ups , which are similar to prototypes, can test user interaction
with system or products. The project team can make changes to the
design based on early test result, thereby reducing the probability of
a problem once the product is released to market.

Strategies for Positive risk or

Opportunities
Risk exploitation : This strategy is often used when a project team
wants to make sure that a positive risk is fully realized. This is
often done by hiring the best experts in a field or ensuring the
most technologically advanced resources are available to the
project team.
Risk sharing : This strategy entails partnering up with another
party in an effort to give your team the best chance of seizing
the opportunity, joint ventures are common example of risk
sharing.
Risk enhancement : This strategy attempts to increase the
probability that an opportunity will occur. This is done by
focusing on trigger condition of the opportunity and trying to
optimize their chances for occurrence.

272
Strategies for both threats and
opportunities
Risk Acceptance : Is any decision not to change the project plan to
deal with a risk. It may be chosen for a risk that has an
extremely low possibility of occurrence or for which no suitable
risk response strategy is identified. Risk acceptance is
performed either passively by doing nothing or actively by
creating a contingency plan to deal with the risk.
Example:
You own a business on a hill in an area that floods relatively often.
Because of your location, you decide not to buy flood insurance.
Instead , you set aside money that is earmarked for the repair of
water damage in case of flooding.
In this case, you are employing a risk acceptance strategy by establishing
a contingency reserve for an emergency . Although you aren’t
ignoring the risk , you will spend money only if the risk event actually
occurs.

Strategies for both threats and

opportunities
Contingency plan : Is a strategy developed in advanced for
dealing with the occurrence of identified risk. It’s performed to
construct a strategy before things go wrong. With a good
contingency plan in place, you can react quick and
appropriately to the risk event , reducing its overall impact. A
contingency plan may include a fallback plan for risks with high
impact. The fallback plan is implemented if the initial
contingency plan is ineffective in responding to the risk event.
Contingency reserve : Usually , when risk acceptance is the selected
response strategy , a contingency reserve is established to deal with
unknown risks and accepted known risks. The contingency reserve
may be in the form of additional time , money or resources . It covers
risk events that are not accounted for in the project’s baseline
duration and cost estimates. The amount of the reserve is determined
by the potential impact of the risk, but should include enough to
implement any contingency plans as well as a buffer for dealing with
unidentified risks.
273
Output
Identified Risk
Risk owner
Results from qualitative and quantitative risk analysis processes
Agreed response
Specific action to implement the chosen response strategy
Residual and secondary risk (next slides)
Budget and time of responses
Contingency plan and triggers
Risk related contractual agreements: Insurance , partnerships,

and risk sharing parties will generate language that specifies each
party’s responsibility for different risk


Output
Residual Risk
The risks that remain after avoidance, transfer or
mitigation responses have been taken. Its also
include minor risks that have been accepted.
Secondary Risk
The risks that arise as a direct result of
implementing a risk response.

274

275
Strategies for Negative Risks or
Threats
Exercise #4
You are the project manager on the case study project.

As a team, create a risk response plan using the following
format and record on the flip chart. Use your corporate
experience for reference and possible risks.
Risk Risk Impact Probability Risk Risk

Category Response Owner

Risk Response Strategies
Mitigation
(Corrective action)
Avoidance Acceptance
(Prevention) (Accept consequences)
Transference
(Shift Responsibility)

276
Is the process of responding to identified and
unforeseen risk. It involves tracking identified risk
, identifying new risks , implementing risk
response plans, and monitoring their
effectiveness.


Tools & Techniques
• Risk reassessment
• Risk audits
• Variance and trend
analysis
• Technical performance Outputs
measurement ¾ Risk register updates
• Reserve analysis ¾ Requested changes
¾ Recommended corrective
• Status meeting actions
¾ Recommended preventative
Inputs actions
9 Risk management plan ¾ Organizational process
9 Risk register assets (updates)
9 Approved change requests ¾ Project management plan
9 Work performance information (updates)
9 Performance Reports
277
Project Risk Response Audit
An examination of the effectiveness of risk response plans and
the performance of the risk owner.
May be conducted by a third party, the project’s risk officer, or
other qualified personnel.
Project Risk Response Audit Process

Gather relevant project data regarding work results including
risk database.
Review the risk response plans and implementation of the
plans.
Prepare a report of the findings and distribute to the project
team and key stakeholders.
Workaround Plans
Unplanned responses to emerging risks that were previously
unidentified or expected. Akram Al-Najjar, PMP,PSP
Discussion
Any question?

278
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PMP Preparation Training

Management

Chapter 12
Project Procurement
Management
280
AGENDA
What is Procurement Management?

Procurement Management Processes
Procurement Management?
Contracts - types
Discussion
Project Procurement Management include the processes required to

purchase and acquire products, services, or results needed from
outside the project team to perform the work.
12.1 Plan Purchases and Acquisitions

12.2 Plan Contracting
12.3 Request seller Responses
12.4 Select Sellers
12.5 Contract Administration
12.6 Contract Closure
281
282
Planning Executing Controlling Closing
12.3
12.1 Request
Plan Purchases seller
and Acquisitions Responses
12.6
12.2
12.2 12.4 Contract
Contract
Plan Select Closeout
Administration
Contracting Sellers
Project Procurement Management

Processes and Key Outputs
Plan Purchases Plan Request Select Contract Contract

and Contracting seller Sellers Administration Closeout
Acquisitions Responses
Complete
Make Or Issue Receive Formally
Award Substantial
buy RFP Proposal Close
contract amount of
decision Contract
work
283
Buyer-seller Relationship
Buyer – The customer

Seller – Contractor; vendor; supplier
external to the performing organization
The terms and conditions of the contract
become key inputs to many of the seller’s
processes
Plan Purchases and Acquisitions
It identifies which project needs can best be

met by purchasing or acquiring products,
services, or results outside the project
organization.
Includes consideration of potential subcontracts
284
Plan Purchases and Acquisitions involves

how to procure
what to procure
how much to procure
when to procure
Tools & Techniques

1. Make-or-buy analysis
2. Expert judgment
Inputs 3. Contract types
1. Enterprise environmental factors
2. Organizational process assets
3. Project Scope statement
4. WBS
5. WBS dictionary
6. Project management plan Outputs
• Risk register 1. Procurement management plan
• Risk related contractual agreements 2. Contract Statement of work
• Resource requirements 3. Make or buy decisions
• Project schedule 4. Requested changes
• Activity cost estimates
• Cost baseline anajjar@pmihouse.org
285
Input
Enterprise Environmental Factors– that are considered include
the conditions of the marketplace and what products, services, and
results are available in the marketplace, from whom and under
what terms and conditions.
Organizational Process Assets– provide the existing formal and
informal procurement-related policies, procedures, guidelines, and
management systems that are considered in developing the
procurement management plan and selecting the contract types to
be used.
Project Scope statement–describes the project boundaries,
requirements, constraints, and assumptions related to the project
scope.
W.B.S.
W.B.S. dictionary
Project management Plan

Tools & Technique
Make-or-buy analysis –This is a general management
technique to determine if the product can be produced cost-
effectively by the performing organization .
Example: A project manager requires the use of a sheet metal

stamping machine. Using the information below calculate the
break event point in days where is the leasing and renting are
the same
Cost Categories Renting Cost Leasing Cost
300 days Annual Maintenance $0 $3,000
or 700 days Daily Operation $0 $70
Daily Rental $100 $0
0r 100 days
or 30 days
Expert judgment – Groups or individuals with specialized

knowledge or training
286
Tools & Technique
Contract-type selection
Fixed price – A fixed total price for a well-

defined product. May include incentives for
meeting selected project objectives.
Example : Contract = $ 90,000,000

Tools & Technique
- Cost reimbursable contracts – Payment to

the seller of actual costs , plus typically a fee representing
seller profit .
Direct costs – Cost incurred in implementing the project
Indirect costs -(Overhead) – Costs allocated to the project
by the performing organization, as a cost of doing business.
Cost plus incentive fee (CPIF): the buyer pays the
seller for allowable performance costs plus a
predetermined fee and an incentive bonus
Example : Contract = Cost plus a fee of $100,000.

While for every month the project is completed
sooner than agreed upon, Seller will receive an
additional incentive fess = $10,000 anajjar@pmihouse.org
287
Tools & Technique
Contract-type selection (cont.)

Cost Reimbursable Contracts
Cost plus percentage of costs (CPPC): the

buyer pays the seller for allowable
performance costs plus a predetermined
percentage based on total costs
Example : Contract = Cost plus 10% of cost as

fee

Tools & Technique

Cost Reimbursable Contracts
Cost plus fixed fee (CPFF): the buyer pays the

seller for allowable performance costs plus a
fixed fee payment .
Example : Contract = Cost plus a fee of $

100,000
288
Example
Cost plus incentive fee Calculation
Target cost $210,000
Target Fee $25,000
Target price $235,000
Sharing Ratio 80 / 20
Actual cost $200,000
Fee $210,000 - $200,000 = $10,000x20%=$2,000

$25,000 Target fee + $2,000 = $27,000 fee
Final price $200,000 + $ 27,000 = $ 227,000

Example

Time and Material contract – Seller is
paid a preset amount per unit of service,
and the total value of the contract is a
function of the quantities needed to
complete the work
289
Example

Contract Types Versus Risk

Output
Procurement management plan – Describes how the

remaining procurement processes will be managed for example :
What types of contracts will be used?

If independent estimates will be needed as evaluation criteria,
who will prepare them and when?
If the performing organization has a procurement department,
what actions can the project management team take on its own?
If standardized procurement documents are needed, where can
they be
found?
How will multiple providers be managed?
How will procurement be coordinated with other project aspects,
such as scheduling and performance reporting?
290
Output
Contract Statement of work – Describes the

procurement items in sufficient detail for prospective
sellers to determine if they are capable of providing
the item
Should include a description of any collateral services
required for the procured item
Make-or-Buy Decisions
The documented decisions of what project products,
services, or results will be either be acquired or will be
developed by the project team. This may include decisions
to buy insurance policies or performance bonds contracts to
address some of the identified risks. anajjar@pmihouse.org
Statement of Work (SOW) Template
I.
Statement of Work (SOW) Template
Scope of Work: Describe the work to be done to detail. Specify the hardware and
software involved and the exact nature of the work.
II. Location of Work: Describe where the work must be performed. Specify the
location of hardware and software and where the people must perform the work
III. Period of Performance: Specify when the work is expected to start and end,
working hours, number of hours that can be billed per week, where the work must
be performed, and related schedule information.
IV. Deliverables Schedule: List specific deliverables, describe them in detail, and
specify when they are due.
V. Applicable Standards: Specify any company or industry-specific standards that
are relevant to performing the work.
VI. Acceptance Criteria: Describe how the buyer organization will determine if the
work is acceptable.
VII. Special Requirements: Specify any special requirements such as hardware or
software certifications, minimum degree or experience level of personnel, travel
requirements, and so on.
291
The Plan Contracting
process prepares the documents

needed to support the Request Seller
Responses process and Select Sellers
process.

Tools & Techniques
1. Standard forms
2. Expert judgment
Inputs
1. Procurement management
Plan
1. Contract statement of work
2. Make or buy decisions
3. Project management plan
• Risk register Outputs
• Risk related contractual 1. Procurement documents
agreements 2. Evaluation criteria
• Resource requirements 3. Contract statement of
• Project schedule work (updates)
• Activity cost estimates
• Cost baseline anajjar@pmihouse.org
292
Tools and Technique
Standard forms – Include standard

contracts, standard descriptions of
procurement items, and standardized
versions of all, or part, of the needed bid
documents
Expert judgment

Output
Procurement documents – Used to solicit
proposals from prospective sellers
Invitation to bid (IFB)
Request for proposal (RFP)
Request for quotation (RFQ)
Invitation for negotiation
Contractor initial response
Procurement documents should include:

The relevant statement of work
Description of the desired form of the response
Required contractual provisions
293
Outline for a Request for
Proposal (RFP)
I. Statement of Work (SOW) Template
Purpose of RFP
II. Organization’s Background
III. Basic Requirements
IV. Hardware and Software Environment
V. Description of RFP Process
VI. Statement of Work and Schedule Information
VII. Possible Appendices
A. Current System Overview
B. System Requirements
C. Volume and Size Data
D. Required Contents of Vendor’s Response to RFP
E. Sample Contract

Output
Evaluation criteria – developed and used to rate or score
proposals. They can be objective (e.g., “The proposed project
manager needs to be a certified Project Management Professional,
PMP®”) or subjective (e.g., “The proposed project manager needs
to have documented previous experience with similar projects”).
Understanding of the need-
Overall or life-cycle cost

Technical capability
Management approach
Financial capacity
Statement of work updates – Modifications to one or more

statements of work may be identified during Plan Purchases and
Acquisitions
294
Proposal Evaluation
Criteria
Request Seller Responses
Obtaining responses (e.g., bids, quotes,

offers) from prospective sellers on how
project requirements can be met
Effort usually expended by the prospective

seller
295
Tools & Techniques

1. Bidder conferences
2. Advertising
3. Develop qualified sellers list
Inputs Outputs
1. Organizational process assets 1. qualified sellers list
2. Procurement management 2. Procurement document
plan package
3. Procurement documents 3. Proposals

Input
Some organizations, as part of their organizational process
assets, maintain lists or files with information on prospective
and previously qualified sellers, sometimes called bidders, who
can be asked to bid, propose, or quote on work. These lists will
generally have information on relevant past experience and
other characteristics of the prospective sellers. Some
organizations maintain preferred sellers lists that include only
sellers already selected through some qualification
methodology.
Procurement management plan

Procurement Documents
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Tools and Technique
Bidders’ conference – Meetings with

prospective sellers prior to preparation of a
proposal
Ensure all prospective sellers have a clear,
common understanding of the procurement
Responses to questions may be incorporated into
the procurement documents as amendments
Advertising – Placing advertisements in

general-circulation publications, such as
newspapers, or in specialty publications,
such as journals

Output
Qualified sellers list

Procurement document package : Is a buyer-
prepared formal request sent to each seller and is
the basis upon which a seller prepares a bid for
the requested products, services, or results that
are defined and described in the procurement
documentation.
Proposals – Seller-prepared documents that
describe the seller’s ability and willingness to
provide the requested product, proposal can be
supplemented with an oral presentation
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Select Seller
The receipt of bids or proposals, and the

application of the evaluation criteria in
order to select a provider
Select Seller
1. Organizational process assets 1. Weighting system
2. Procurement management Plan 2. Independent estimates
3. Evaluation criteria 3. Screening system
4. Procurement document package 4. Contract negotiation
5. Proposals
5. Seller rating system
6. Qualified sellers list
6. Expert judgment
7. Project management plan
• Risk register 7. Proposal evaluation techniques
• Risk related contractual agreements
Outputs
1. Selected sellers 4. Resource availability
2. Contract 5. Requested changes
3. Contract management plan 6. Procurement management plan (updates)
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Select Seller
Input
Organizational Process Assets: Formal or
informal policies that can affect the evaluation of
proposals
Evaluation criteria – May include samples of the

suppliers previously produced products/services for the
purpose of providing a way to evaluate their
capabilities and quality of products
Select Seller
Tools and Technique
Weighting system
Select a single source, who will be asked to
sign a standard contract
Rank and order all proposals to establish a
negotiating sequence
Select a short list of qualified sellers, based

on a preliminary proposals and, then, a
more detailed evaluation of a more detailed
and comprehensive proposal
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Point Rating System
• Request for proposal 33 1/3 %
- Technical 50%
- Company 25%
- Previous experience 25%
Presentation 33 1/3 %
- Team 60%
- Format 40%
Price 33 1/3 %
- Day rates 85%
- Expenses 15%
Overall 100%
Criteria for Weighting Suppliers
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Select Seller
Tools and Technique
Independent estimates : For many procurement items , the
procuring organization may prepare its own independent
estimates as a check on proposed pricing .
Screening System : Involves establishing minimum

requirements of performance for one or more of the evaluation
criteria
Select Seller
Tools and Technique
Contract negotiation – Involves

clarification and mutual agreement on the
structure and requirements of the contract,
prior to the signing of the contract
Final contract language should reflect all

agreements reached
Include responsibilities and authorities, applicable
terms and laws, technical and business
management approaches, contract financing, and
price
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Tactics of Negotiation
Attacks, Personal Insults, Good Guy and bad guy,
Deadline, Lying, Limited Authority, Missing man,
Fair and Reasonable, Delay, Extreme Demands,
Withdrawal, and Fait Accompli
Select Seller
Tools and Technique
Rating Systems : Seller rating systems are
developed by many organizations and use
information such as the seller’s past performance,
quality ratings, delivery performance, and
contractual compliance.
Expert Judgment
Proposal Evaluation Techniques: Many
different techniques can be used to rate and score
proposals, but all will use some expert judgment
and some form of evaluation criteria
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Select Seller
Output
Selected Sellers : are those sellers who have been judged to
be in a competitive range based upon the outcome of the proposal
or bid evaluation, and who have negotiated a draft contract, which
will be the actual contract when an award is made.
Contract – A mutually binding agreement that obligates the seller to
provide the specified product, and obligates the buyer to pay for it
A contract is a legal relationship subject to remedy in the courts
It may be called a contract, an agreement, a subcontract, a

purchase order, or a memorandum of understanding
The review-and-approval process should ensure that the
contract language describes a product or service that will
satisfy the need identified
Select Seller
Output
Contract Management Plan: The plan

covers the contract administration activities
throughout
Resource Availability
Procurement Management Plan
(Updates)
Requested Changes
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Ensuring the seller’s performance meets

contractual requirements
• The legal nature of the contractual relationship

makes it imperative that the project team be
acutely aware of the legal implications of
actions they take during administration of the
contract
• Payment terms should be defined within the

contract and should link progress made with
compensation paid
Applying the appropriate PM processes

to the contractual relationships
Direct and Manage Project Execution – To authorize the

contractor’s work at the appropriate time
Performance reporting – To monitor contractor’s cost,
schedule, and technical performance
Quality control – To inspect and verify the adequacy of the
contractor’s product
Change control – To ensure that changes are properly
approved and that the appropriate stakeholders are made aware
of such changes
Risk Monitoring and Control - to ensure that risks are mitigated.
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1. Contract 1. Contract change control system
2. Contract management plan 2. Buyer conducted performance
3. Selected sellers review
4. Performance reports 3. Inspections & audits
5. Approved change requests 4. Performance reporting
6. Work performance 5. Payment system
information 6. Claims administration
7. Records management system
8. Information technology
Outputs
1. Contract documentation 5. Project management plan (updates)
2. Requested changes - Procurement management plan
3. Recommended corrective actions - Contract management plan
4. Org. process assets (updates)
Input
Approved Change requests –

Modifications to the terms of the contract or
to the description of the product or the
service to be provided. Contested changes
are called claims, disputes, or appeals.
Work performance information – Status
of deliverables, to what extent quality
standards are being met, and costs incurred
or committed are collected as part of the
project plan execution
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Tools and Technique
Contract change control system –

Defines the process by which the contract
may be modified. It includes:
Paperwork
Tracking systems
Dispute-resolution procedures
Approval procedures
Performance reporting
Payment system
Tools and Technique
Buyer-Conducted Performance Review: A procurement performance review is a
structured review of the seller’s progress to deliver project scope and quality, within cost and
on schedule, as compared to the contract.
Inspections and Audits: can be conducted during execution of the project to identify
any weaknesses in the seller’s work processes or deliverables.
Performance Reporting : provides management with information about how effectively
the seller is achieving the contractual objectives.
Payment system – Handled by the accounts payable system of the performing

organization. The system must include the appropriate reviews and approvals by the project
management team.
Claims Administration: Contested changes and constructive changes are those
requested changes where the buyer and seller cannot agree on compensation for the change
changes
Records Management System: is used by the project manager to manage contract
documentation and records. The system is used to maintain an index of contract documents
and correspondence, and assist with retrieving and archiving that documentation.
Information Technology : by automating portions of the records
management system, payment system, claims administration, or performance
reporting and providing electronic data interchange between the buyer and seller.
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Output
Contract documentation :Contract documentation includes, but is
not limited to, the contract along with all supporting schedules, requested
unapproved contract changes, and approved change requests. Contract
documentation also includes any seller-developed technical
documentation and other work performance information, such as
deliverables, seller performance reports, warranties, financial documents
including invoices and payment records, and the results of contract-
related inspections.
Requested Changes.
Recommended Corrective Actions
• Correspondence. Contract terms and conditions often require written
documentation of certain aspects of buyer/seller communications, such as
warnings of unsatisfactory performance and requests for contract changes
or clarifications. This can include the reported results of buyer audits and
inspections that indicate weaknesses the seller needs to correct.
• Payment schedules and requests.
• Seller performance evaluation documentation.
Contract Close Out
Completion and settlement of the contract,

including resolution of any open items
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Contract Close Out
Inputs
1. Procurement management plan Tools & Techniques
2. Contract management plan 1. Procurement audits
3. Contract documentation 2. Records management system
4. Contract closure procedure 4.7.3.2.
Outputs
1. Closed Contracts
2. Organizational process assets (updates)
Contract Close Out

Input
Contract documentation – Includes, but not

limited to:
• Contract
• Supporting schedules
• Requested and approved contract changes
• Seller-developed technical documentation
• Seller performance reports
• Financial documents (e.g., invoices and payment
records)
• Results of any contract-related inspections
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Contract Close Out
Tools and Technique
Procurement audits –Structured reviews

of the procurement process, from
procurement planning through contract
administration, conducted to identify
successes and failures (lessons learned)
Contract Close Out

Output
Closed contracts
The buyer, usually provides the seller with formal written notice that the
contract has been completed.
• Contract file. A complete set of indexed contract documentation, including
the closed contract, is prepared for inclusion with the final project files
• Deliverable acceptance. The buyer, usually through its authorized contract
administrator, provides the seller with formal written notice that the
deliverables have been accepted or rejected. Requirements for formal
deliverable acceptance, and how to address non-conforming deliverables, are
usually defined in the contract.
• Lessons learned documentation. Lessons learned analysis and process
improvement recommendations are developed for future purchasing and
acquisition planning and implementation.
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Project Procurement Management
Processes and Key Outputs
Plan Purchases Plan Request Select Contract Contract

and Contracting seller Sellers Administration Closeout
Acquisitions Responses
Complete
Make Or Issue Receive Formally
Award Substantial
buy RFP Proposal Close
contract amount of
decision Contract
work
Practice Test Procurement Management
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Chapter 4

Includes the processes and activities needed

to identify, define, combine, unify, and
coordinate the various processes and project
management activities within the project
management process groups.

312
Understanding Project Integration
Management
Scope Project
Success
Time
PM Knowledge Areas
Cost t
men
Quality g e
a na
HR M
i on
Comm g rat
I nte
Risk j ect
o
Pr
Procure
Concept Development Implementation Close-out
Project Life Cycle

scope statement
Create WBS
Activity sequencing
Acitivity resource
estimating
Activity duration
estimating
Schedule
development
Cost budgeting
Perform quality
Human resource
Communications
Stakeholders
Risk management
Risk identification
Qualitative risk
Quantitative risk
analysis
Risk response
planning
313
314
Project Integration Management Develop Project Charter

Tools & Techniques
1. Project selection methods
Inputs 2. Project Management methodology
1. Contract (when applicable) 3. Project Management Information
2. Project statement of work System (PMIS)
3. Enterprise environmental 4. Expert judgment
factors
assets
Outputs
1. Project charter

315
Project Integration Management Develop Preliminary Project Scope Statement
Develop Preliminary Project Scope Statement

1. Project charter
1. Project Management methodology
2. Project statement of work
2. Project Management Information
System (PMIS)
factors
3. Expert judgment
assets
Outputs

Develop
Project
Charter
Develop
Preliminary
Project
Scope
PROCESS GROUP

316
Develop Project Management Plan
Tools & Techniques

• Project Management methodology
Inputs • Project Management Information
• Preliminary Project Scope System (PMIS)
Statement • Expert judgment
• Project management
processes
• Enterprise environmental
factors
• Organizational process Outputs
assets

Project Integration Management Planning Process Group
MONITORING
& CONTROLLING
PROCESS
GROUP
Develop Scope Planning Scope Definition

Project
Activity Definition
Management
INITIATION
PROCESS Plan
Create WBS Activity Resource Estimating
GROUP
Activity Duration
Estimating
Cost Estimating
Risk
Management
Planning
Cost Budgeting Activity Sequencing
Risk
Identification H R Planning Schedule Development
EXECUTING
PROCESS
Qualitative Quality Planning GROUP
Risk
Analysis
Communication
Planning
Plan
Quantitative
Purchases
Risk
And
Analysis Plan Contracting CLOSING
Acquisitions PROCESS
GROUP
Risk Response Planning

317
Direct & Manage Project Execution
Tools & Techniques

Inputs • Project Management methodology
• Project management plan • Project Management Information
• Approved corrective System (PMIS)
Actions
• Approved preventive Outputs
actions • Deliverables
• Approved Change requests • Requested change
• Approved defect repair • Implemented change requests
• Validated defect repair • Implemented corrective Actions
• Administrative closure • Implemented preventive actions
procedure • Implemented defect repair
• Work performance information

MONITORING
INITIATION Perform & CONTROLLING
PROCESS Quality Assurance PROCESS
GROUP GROUP
Acquire
Project Team
Direct and
Manage
Project
Execution
Develop Information
Project Team Distribution
CLOSING
PLANNING PROCESS
PROCESS Request Select
GROUP
GROUP Sellers Responses Sellers

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Monitor and Control Project Work

• Project management plan • Project Management methodology
• Work performance • Project Management Information
information System (PMIS)
• Rejected Change requests • Earned value management
• Expert judgment
Outputs
• Recommended corrective Actions
• Recommended preventive actions
• Forecasts
• Recommended defect repair
Integrated Change Control
Outputs
Inputs • Approved change requests
• Project management plan • Rejected change requests
• Requested Changes • Project management plan (updates)
• Work performance information • Project scope statement (updates)
• Recommended preventive actions • Approved corrective Actions
• Recommended corrective actions • Approved preventive actions
• Recommended defect repair • Approved defect repair
• Deliverables • Validated defect repair
• Deliverables
Tools & Techniques

• Project Management methodology
• Project Management Information
System (PMIS)
• Expert judgment
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Monitoring and Controlling Process Group
Scope Verification
INITIATION
PROCESS
GROUP Scope Control
Monitor
Schedule Control
And Control
Project
Work Cost Control
PLANNING Perform Quality Control

PROCESS CLOSING
GROUP PROCESS
Manage Project team GROUP
Integrated
Perform Reporting
Change
Control
Manage Stakeholders
EXECUTING
PROCESS
GROUP

Close Project
Tools & Techniques

Inputs • Project Management methodology
• Project management plan • Project Management Information
• Contract documentation System (PMIS)
• Enterprise environmental • Expert judgment
factors
• Organizational process Outputs
assets • Administrative closure procedure
• Work performance • Contract closure procedure
information • Final product, services or result
• Deliverables • Organizational process assets
(updates)

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Closing Process Group
PLANNING
PROCESS
GROUP
Close
Project
EXECUTING
PROCESS
GROUP
Contract
Closure
MONITORING & CONTROLLING

PROCESS
GROUP

Processes Flow Diagram
Enterprise Environmental Project Initiator 0r

Factors 4.1 Develop Project Charter
Sponsor
Organizational Process
Assets 4.2 Develop Preliminary Project Scope Statement
Scope Definitions
4.3 Develop Project Management Plan

Project Management
Plan Development
4.4 Direct & Manage Project Execution
4.5 Monitoring & Controlling Project Work
Contract
Administration 4.6 Integrated Change Control
Contract Closure
4.7 Close Project
Customer

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Practice Test Project
Integration Management

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Sample Examination Questions
Name ………………………………..
1. Which process is included in Project Integration Management?

A. Develop project management plan.
B. Control scope definition.
C. Review scope verification.
D. Conduct procure surveillance
2. Project sponsors have the GREATEST influence on the scope, quality, time, and cost
of the project during the:
A. Concept phase.
B. Development phase.
C. Execution phase.
D. Close-down phase.
3. Ideally, communication between the project manager and the project team members
Should take place:
A. Via daily status reports.
B. Through approved documented forms.
C. By written and oral communication.
D. Through the formal chain of command.
4. A project's payback period ends when:

A. Profit maximum is realized.
B. Unit profit is realized.
C. Monthly revenue exceeds monthly costs.
D. Cumulative revenue equals cumulative costs.
5. A scope statement is important because it:

A. Provides the basis for making future project decisions.
B. Provides a brief summary of the project.
C. Approves the project for the stakeholders.
D. Provides criteria for measuring project cost.
6. A project management professional can compare earned value performance data to all
of the following project management tools EXCEPT:
A. Critical path analysis.
B. Technical performance metrics.
C. Risk mitigation plans.
D. Forecasted final costs and schedule estimates.
7. During the project planning process, the work breakdown structure should be
Developed to:
A. The sub-project level.
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B. The level determined by the project office.
C. A level allowing for adequate estimates.
D. The cost center level.
8. The decomposition process is a technique used to construct a:

A. Precedence network.
B. Critical Path Method Diagram.
C. Variance analysis.
D. Work breakdown structure.
9. A project loses a contractor in the middle of a project. A new project team is formed to
replace the role of the lost contractor and his/her team. As a project manager, what is the
FIRST topic to address to the team in the kick-off meeting?
A. Identify team roles and responsibilities.
B. Review detailed schedule.
C. Discuss cost estimates.
D. Emphasize your authority.
10. Constructive team roles include:

A. Encourager, initiator, and gatekeeper.
B. Information giver, devil’s advocate, and clarifier.
C. Withdrawer, harmonizer, and blocker.
D. Summarizer, recognition seeker, and information seeker.
11. A project schedule completion date will change if:

A. The critical path is reduced.
B. The contingency is no longer available.
C. No float time is available.
D. Project resources are reduced.
12. Your project is behind schedule due to conflict between team members. Having
resolved the conflict, to get the project back on schedule, you should consider:
A. Crashing the schedule.
B. Performing resource leveling.
C. Conducting reverse resource allocation scheduling.
D. Utilizing the critical chair resources.
13. Risk quantification includes:

A. Enumerating sources of internal and external events.
B. Identifying potential events and impact.
C. Evaluating probability and impact.
D. Developing contingency plans and resources.
14. In which project phase do you have the GREATEST influence on project risk?
A. Conceptual
B. Design
C. Execution
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D. Implementation
15. A precise description of a deliverable is called a:

A. Specification.
B. Baseline.
C. Work package.
D. Work breakdown structure element.
16. The objective of fast tracking a project is to:

A. Increase productivity.
B. Reduce project duration.
C. Increase schedule tracking controls.
D. Reduce project risks.
17. When a project manager places a purchase order for a piece of equipment, it
represents which of the following?
A. Commitment
B. Expense
C. Cash out-flow
D. Capital investment
18. The procure audit has all of the following characteristics EXCEPT:
A. It maintains a complete file of contract – related records
B. It is a structured review of the procurement process.
C. It is a review of the various processes from Plan Purchases and Acquisition
through Contract Administration
D. Its objective is to identify successes and failures that warrant recognition
19. You have just taken control of a project in the middle of execution and need to learn
who has approval authority for revisions in scope. Which document provides this
information?
A. Resource assignment matrix
B. Change control plan
C. Project charter
D. Client organization chart
20. Of the following conflict management approaches, which is believed to lead to the
LEAST enduring positive results?
A. Problem solving
B. Avoidance
C. Compromise
D. Forcing
21. Complex projects, involving cross-disciplinary efforts, are MOST effectively

managed by:
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A. Multiple lead project managers.
B. A functional organization.
C. A strong matrix organization.
D. A strong traditional manager.
22. The measure used to forecast project cost at completion is:

A. CPI.
B. SPI.
C. BCWP.
D. ACWP.
23. A contractor’s deliverable has been delayed 30 days. The process of determining how
this event will affect the project schedule is called risk:
A. Identification.
B. Mitigation.
C. Simulation.
D. Assessment.
24. Conflict resolution techniques that may be used on a project include:

A. Withdrawing, compromising, controlling, and forcing.
B. Controlling, forcing, smoothing, and withdrawing.
C. Confronting, compromising, smoothing, and directing.
D. Smoothing, confronting, forcing, and withdrawing.
25. It is critical for your company to offer its products on the Internet to increase its
market share. The company has no previous experience in this area, but it believes that
knowledge is needed rapidly. As you have shown an interest in the Internet, you are
asked to start planning for this project. What is the FIRST step to take as you begin
planning?
A. Identify the risks.
B. Plan the scope.
C. Establish a resource plan.
D. Complete a cost and schedule estimate.
26. Effective stakeholder management includes all of the following project elements
EXCEPT:
A. Clear requirements definition.
B. Scope change control.
C. Timely status information.
D. Frequent cost reports.
27. A likely result of using "compromise" to resolve a two-party conflict is:

A. Lose-lose.
B. Win-lose.
C. Win-win.
D. Lose-win.
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28. As part of the quality audit, the scope statement is checked against the work results to
ensure the conformance to the customer requirements. The results should be documented
and used for:
A. Estimating future projects.
B. Changing the project scope.
C. Defining future project tasks.
D. Validating the quality process.
29. A generally accepted method to confirm accuracy of task progress is through:

A. Earned value.
B. Probability vs. outcome.
C. Maximum ceiling.
D. Work breakdown structure.
30. Which of the following techniques is used to control the project schedule?
A. Pareto diagram
B. Performance measurement
C. Parametric modeling
D. Statistical sampling
31. Pareto analysis, cause and effect, and flow charts are all tools used in quality:
A. Control.
B. Benchmarking.
C. Planning.
D. Verification.
32. Elements of changing a project schedule include all of the following EXCEPT:
A. Obtain the appropriate levels of approval.
B. Submit the appropriate change requests.
C. Evaluate the impact of a change to the schedule.
D. Adjust the project end date to the schedule variance.
33. An individual’s willingness to take a risk can be determined by:

A. Decision tree modeling.
B. Monte Carlo method.
C. Sensitivity analysis.
D. Utility function.
34. All of the following assist in determining the impact of a scope change EXCEPT:
A. Project charter.
B. Baseline.
C. Performance measurement.
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D. Milestones.
35. A project was estimated to cost $1.5 million and scheduled to last six months. After
three months, the earned value analysis shows the following:
BCWP = $650,000
BCWS = $750,000
ACWP = $800,000
What are the schedule and cost variances?
A. SV= +$100,000 / CV= +$150,000
B. SV= +$150,000 / CV= -$100,000
C. SV= -$50,000 / CV= +$150,000
D. SV= -$100,000 / CV= -$150,000
36. Configuration management is a technique for:

A. Overall change control.
B. Project plan execution.
C. Scope planning.
D. Risk quantification.
37. Scope change control MUST be integrated with all of the following control processes
EXCEPT:
A. Schedule.
B. Cost.
C. Procurement.
D. Quality.
38. Reviewing work products and results to ensure that all were completed satisfactorily
and formally accepted is part of:
A. Risk management.
B. Quality control.
C. Change control management.
D. Scope verification.
39. Risk response development is intended to:

A. Create steps to identify project risks.
B. Formulate strategies for dealing with adverse events.
C. Construct a list of previous project risks.
D. Develop measurements to quantify project risks.
40. Due to cuts in funding, your project has been terminated. The scope verification
process:
A. Should be delayed until the project is completed.
B. Should determine the correctness of the work results.
C. Should establish and document the level and extent of completion.
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D. Will form the basis of the project audit.
41. During the contract close-out, the project manager needs to document the:
A. Formal acceptance.
B. Statement of work.
C. Payment schedule.
D. Change control procedure.
42. You've been engaged to manage a project. The estimated cost of the project is
$1,000,000. The project sponsor has approved this amount. Your earned value
calculations indicate that the project will be completed on time and under budget by
$200,000. Based on this calculation, your personal profit will decrease by $2,000.
At the completion of this project, the project manager will document and archive all
project information. This information may be used for future projects in all areas
EXCEPT:
A. Estimating durations.
B. Administering contracts.
C. Resolving conflicts.
D. Allocating resources.
43. A KEY activity in closing out a project is to:

A. Disseminate status reports and risk assessments.
B. Disseminate information to formalize project completion.
C. Monitor the specific project results to determine if they comply with relevant quality
standards.
D. Transfer all the project records to the project owners.
44. You've been engaged to manage a project. The estimated cost of the project is
$1,000,000. The project sponsor has approved this amount. Your earned value
calculations indicate that the project will be completed on time and under budget by
$200,000. Based on this calculation, your personal profit will decrease by $2,000.
Given the estimated decrease in personal profit, what action should you take?
A. Invoice for the full $1,000,000 based on the contract.
B. Add tasks to improve the outcome and increase the actual project cost.
C. Inform the end-user that you can add features to the project in order to use the entire
budget.
D. Communicate the projected financial outcome to the project sponsor.
45. You are building a water treatment facility. Routine tests reveal that there are
contaminants in the water but that they have an extremely low risk for causing any
sickness. As the project manager, you should:
A. Inform the public that a detailed examination has been ordered to determine the
extent to which the problem exists.
B. Do nothing because there is extremely low risk for sickness except for some effects
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on small children and the elderly.
C. Tell the public there is no problem, except for small children and the elderly who
need to boil the water before drinking.
D. Educate the public about the advances on water treatment technology and the industry
efficiency and safety record.
46. A KEY activity for achieving customer satisfaction is to define:
A. The business use.
B. Requirements.
C. Product specificity.
D. Change control.
47. When it appears that a design error will interfere with meeting technical performance
objectives, the PREFERRED response is to:
A. Decrease the performance value to equal the assessed value.
B. Develop alternative solutions to the problem.
C. Increase the specified value to set a new performance goal.
D. Reduce the overall technical complexity of the project.
48. The disorientation experienced by people who suddenly find themselves living and
working in a different environment is known as:
A. Culture shock.
B. Sociocentrism.
C. Temporal shock.
D. Ethnocentrism.
49. What is the MOST effective process to ensure that cultural and ethical differences do
not impede success of your multi-national project?
A. Co-locating
B. Training
C. Forming
D. Teaming
50. Negotiating across international cultures involves mutual interdependence between

parties. The negotiating MUST be conducted in an atmosphere of:
A. Mutual trust and cooperation
B. Generalities and vagueness
C. Sincerity and compassion
D. Uncertainty and caution
331

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Akram Al-Najjar, PMP , PSP

A. Conceptualizing, Initiating, Executing, Monitoring and Controlling, Closing

A. Project management methodology, project management information system, and expert

A. It is a hierarchical decomposition of work

A. Theory Y (McGregor Model)

Question # 8: As a project manager, you examine project results to determine how

Question # 9: As a project manager, you are concerned with determining which

A. Risk Management Planning

PMP® Certification Program

 Two eligibility categories:

Category 2 eligibility criteria &

 Experience Verification Form, provided by PMI

 Provide contact data for all references

 PMI may check the references directly!

 35 Contact Hours of Project Management

 For non-members of PMI:

 Annual PMI membership fee: $119.00

 200 four option, multiple-choice questions, covering the nine

 25 questions are not scored (used for benchmarking the test)

 Passing score: min. 61% (106 of 175 correct answers)

 Passing score may be changed by PMI! anajjar@pmihouse.org

1.1 Purpose of this PMBOK® Guide

 The primary purpose of the PMBOK®

Purpose of this PMBOK® Guide

•Temporary Has a definite beginning and end, not an

 Proceeding in steps, continuing in

 Similarities with Operations:

What Are Projects in Your Company ?

For each project record the following:

 Northwest Airlines developed a new

Samples of Non-IT Projects

 Constructing a new building

What is Project Management

Stakeholders Individuals and organizations involved in or

 The Standard for Project Management of

 Project Management Knowledge Areas

Project Management Processes

Project Integration Management

Project Management Knowledge Areas

Human Resource Management

 The Project Management Body of

Application Area Knowledge,

 Functional departments and supporting disciplines, such as legal,

 International and political environment.

General Management Knowledge and

 Financial management and accounting

 Influencing the organization. The ability to “get things

1.6 Project Management Context

Project Management Office

 A project management office (PMO) is an

 The Project Life Cycle

 Project Management Process group :

Project Management Processes

 Defines the beginning and end of the project

 Divides the project into phases that provide

Characteristics of Life Cycle (cont.)

 Cost and staffing levels are low at the

Cost and Development

Individuals and organizations who

Who is the project sponsor ?

 Sets project objectives

Two eligibility categories:

Experience Verification Form, provided by PMI

Provide contact data for all references

PMI may check the references directly!

35 Contact Hours of Project Management

For non-members of PMI:

Annual PMI membership fee: $119.00

200 four option, multiple-choice questions, covering the nine

25 questions are not scored (used for benchmarking the test)

Passing score: min. 61% (106 of 175 correct answers)

Passing score may be changed by PMI! anajjar@pmihouse.org

The primary purpose of the PMBOK®

Proceeding in steps, continuing in

Similarities with Operations:

Northwest Airlines developed a new

Constructing a new building

The Standard for Project Management of

Project Management Knowledge Areas

The Project Management Body of

Functional departments and supporting disciplines, such as legal,

International and political environment.

Financial management and accounting

Influencing the organization. The ability to “get things

A project management office (PMO) is an

The Project Life Cycle

Project Management Process group :

Defines the beginning and end of the project

Divides the project into phases that provide

Cost and staffing levels are low at the

Sets project objectives

Provides corporate Plans, organizes, and

Reports on progress to Monitors progress and

Provides project approvals Communicates, directs

Reflected in norms, beliefs, and

Functional organization – Hierarchy

Project is initiated as result of one of

Requirements that satisfy stakeholder needs, wants,

Business need, high level product description, or

Project purpose and justification.

Organizational or Company culture and structure

Governmental or industry standards (Regulatory agency, regulations Product,

Infrastructure (facilities & capital equipment)

Existing Human Resources , Personal administration

Company work authorization system , Market place conditions

Stakeholders risk tolerance , Commercial databases

Project Management information system (PMIS)