9618$$ CH25 09-06-02 15:01:16 PS 359 Quality Management מ25 28 12 22 This value is 28 מ (מ25) or 53. Since this number is in ten-thousandths of an inch the correct answer is .0053. 33. Answer: a To calculate the value for R bar, we take the value for R for each day and find the mean or average value. Value for R for each day is: Day1 2 3 4 5 6 7 8 910 R 21 52 20 68 86 77 62 31 81 53 The sum of the values is 551, which is 55.1 when divided by 10. Since this number is in ten-thousandths of an inch, the correct answer is .00551. 34. Answer: a In sampling inspection the ideal operating characteristic curve would correctly pass or reject all lots that were below or above the AQL point. Any lot that truly had more than the allowed AQL would be rejected, and any lot that had less than or equal to the AQL would be accepted. 35. Answer: a When sampling inspection is used, it will discover lots that are above the AQL. These lots are then returned for 100% inspection. When the 100% inspection is done, the defective parts are removed, and the acceptable ones are sent to the customer. As the number of defective parts increases, more lots will have to be inspected 100%. Initially, the quality delivered to the customer will fall, but because of the added work of the 100% inspection, the quality will then im- prove. 36. Answer: d Five years. 37. Answer: c In the Shewhart and Deming cycle, an idea is first identified and planned for implementation. Then an experiment is performed to see if the idea will work. The results are checked, and then evaluated. If the evaluation is positive, the idea is fully implemented, and the next idea is planned. 9618$$ CH25 09-06-02 15:01:17 PS 360 Preparing for the Project Management Professional Certification Exam 38. Answer: a The Demming cycle refers to the process of making continuous improvements: Plan, Do, Check, Act. In the Demming cycle we plan an improvement, and then we attempt the new process with the change on an experimental level. We check the results and then act to make the permanent improvement. 39. Answer: b Because the parts are attribute inspected, we do not have data other than the parts failed to pass a Go–No Go gauge. We only know that an unacceptable number of parts were either above or below the allowed dimension. It is possi- ble that the average for the rejected parts is 2.000 inches. The only thing we know for sure is that the part diameters are greater than 0.000, or they would not exist. 9618$$ CH26 09-06-02 15:01:22 PS CONTRACTS AND PROCUREMENT 1. Answer: b A statement of work is the description of what the project is about and what will be delivered. The project plan is complete and contains the detailed work that the project will do, complete with task descriptions and schedule, cost, and scope baselines containing a real schedule and budget. An exception report describes items that are not as planned, and a Pareto analysis is a quality man- agement tool used to prioritize defects into the most frequently occurring. 2. Answer: a In a fixed price contract the supplier is obligated to deliver the contracted-for item at a fixed price. The supplier is aware of the risk and will put an allowance for the risk in the contracted price. This often means that the project team will pay the supplier for the cost of the risk regardless of whether the risk occurs. 3. Answer: c The project manager should make every effort to make sure that the supplier is aware of the risk before the contract is signed. The project manager is obligated ethically to reveal the information to the supplier before the contract is signed. 4. Answer: b The make or buy decision is not a contract or purchase order type. Make or buy refers to the decision process that is used to decide whether or not work should be done in our own facility or contracted out to a supplier. 5. Answer: c The project charter is one of the first things that must be done in any project. The project charter according to the Guide to the PMBOK 2000 is: ‘‘A docu- ment issued by senior management that provides the project manager with the authority to apply organizational resources to project activities.’’ 6. Answer: d Although it is not to the letter of the contract, the buyer is going to have much more trouble if the seller cannot make the payroll and cannot complete the 361 9618$$ CH26 09-06-02 15:01:22 PS TEAMFLY Team-Fly ® 362 Preparing for the Project Management Professional Certification Exam contract because their employees will not work without pay. The best thing would be to change the contract in some way that is mutually beneficial. 7. Answer: d In a blanket order, a long term order is placed with the seller. The price is based on the goods or services that will be sold over the period of the blanket order. The seller has a long term order from the buyer and can invest in the means of production. The buyer has a stable price for the period of the blanket order. If the buyer does not buy all the goods or services that were promised, the price per unit is adjusted at the end of the contract. Since the inventory is delivered as needed, the inventory carrying cost is of no consequence to the buyer. 8. Answer: c Forward buying is the type of purchasing where the amount of goods required for a long period of time is purchased and delivered at one time. There is a quantity discount for this type of purchase, but it has no effect on capital investment unless it would be to build a place to store the goods. It will decrease transportation cost, increase inventory, prevent the risk of future price increases, and increase the cost associated with obsolescence. 9. Answer: d The marketing function is not part of the procurement process. 10. Answer: d Cost reimbursable contracts are frequently called cost plus contracts. 11. Answer: c Work is frequently done after delivery if it is to both the seller’s and the buyer’s mutual benefit. The cost of doing the work is charged back to the seller, thus back charged. 12. Answer: d Contract negotiations take place after the vendor has been selected. This is true even in a bid situation. The seller and the buyer negotiate over the specific terms and conditions of the contract and can even adjust the pricing. Care must be taken here lest the unsuccessful bidders protest the adjustments and force a rebid of the contract. 9618$$ CH26 09-06-02 15:01:23 PS 363 Contracts and Procurement 13. Answer: c A request for proposal is a device used to solicit seller proposals. In an RFP the seller makes proposals as to how the needs of the buyer can be satisfied. The buyer may accept the proposal from the seller even if it is more costly than the lowest proposal. 14. Answer: c The request for proposal process is the most effective means of obtaining the best seller. It puts the burden of offering the best solution to the problem on the seller, but it creates a problem for the buyer in that the proposals will require careful evaluation by the buyer’s team. 15. Answer: d Our seller’s competitor’s method of outsourcing is not relevant to the make or buy decision. 16. Answer: c The terms ‘‘bid’’ and ‘‘quotation’’ are generally used when the source selection decision will be price driven (as when buying commercial items), while the term ‘‘proposal’’ is generally used when nonfinancial considerations such as technical skills or approach are paramount (as when buying professional ser- vices). 17. Answer: b It is better to try to save a contract that is nearly completed than to start all over with another vendor. There are problems in this work, and it seems likely that the work is not clearly defined. 18. Answer: b Existing lists of potential sellers can often be expanded by placing advertise- ments in general circulation publications such as newspapers or in specialty publications such as professional journals. Some government jurisdictions re- quire public advertising of certain types of procurement items; most govern- ment jurisdictions require public advertising of subcontracts on a government contract. 19. Answer: a Of the contracts listed, the cost plus percentage of cost as an award fee is the greatest risk for the buyer and the least risk for the contractor performing the 9618$$ CH26 09-06-02 15:01:24 PS 364 Preparing for the Project Management Professional Certification Exam work. Not only do costs go up if there are problems but the fee increases with additional cost as well. Generally speaking, buyers prefer the fixed price con- tract, which places more risk on the seller, and sellers prefer cost contracts, which place more risk on the buyer. 20. Answer: b The concept of warranty is based upon one party’s assurance to the other that the goods will meet certain standards of quality, including condition, reliability, description, function, or performance. This assurance may be expressed or im- plied. Recognizing the principal function of a warranty is to establish a level of quality (and title—not discussed herein); it thus gives a source of remedy for loss due to a defect in the quality of the goods. The contract may and should establish a level of quality, and if it does, it is an expressed warranty recognized under Section 2-313 (1) (a) of the Uniform Commercial Code. 21. Answer: b The person or organization responsible for contract administration should pro- vide the seller with formal written notice that the contract has been completed. Requirements for formal acceptance and closure are usually defined in the con- tract. 22. Answer: b Fixed price or lump sum contracts—this category of contract involves a fixed total price for a well-defined product. To the extent that the product is not well-defined, both the buyer and seller are at risk—the buyer may not receive the desired product or the seller may need to incur additional costs in order to provide it. Fixed price contracts may also include incentives for meeting or exceeding selected project objectives such as schedule targets. 23. Answer: b The first thing that should be done is to issue a purchase order to the contractor and find out how much the change is going to cost. It is important in managing changes that work on changes does not take place until the cost of doing the change is clearly understood. 24. Answer: b Security is a consideration in making a make-or-buy decision. In this situation it might be very important to know how well the service bureau will be able to protect your designs from the competition. Make or buy is a general manage- 9618$$ CH26 09-06-02 15:01:25 PS 365 Contracts and Procurement ment technique which can be used to determine whether a particular product can be produced cost-effectively by the performing organization. Both sides of the analysis include indirect as well as direct costs. For example, the ‘‘buy’’ side of the analysis should include both the actual out-of-pocket cost to purchase the product as well as the indirect costs of managing the purchasing process. A make-or-buy analysis must also reflect the perspective of the performing organization as well as the immediate needs of the project. For example, pur- chasing a capital item (anything from a construction crane to a personal com- puter) rather than renting it is seldom cost effective. However, if the performing organization has an ongoing need for the item, the portion of the purchase cost allocated to the project may be less than the cost of the rental. 25. Answer: b In the procurement process, the solicitation process is the process whereby po- tential vendors are notified of an impending contract procurement. 26. Answer: c This is the formal and legal definition of a contract. 27. Answer: d The contract definition includes the requirement for a contract to be agreed to by competent parties. The person signing the contract was below the legal age for doing so; therefore, the contract is void. 28. Answer: b Commodities are those items that are common and readily available from sev- eral suppliers. They are interchangeable and can be bought on the basis of price alone, since there is little difference between vendors of these products. 29. Answer: b When a procurement is put out for bid the resulting decision to buy from a vendor is based on price alone. If a request for proposal was issued instead, then it would be up to the overall evaluation of the proposal to determine the vendor selected. 30. Answer: b Blanket orders are promises to do business for a period of time. In this case the trucking company has negotiated a blanket order with the tire vendor. The discount price per tire is based on the quantities specified and forecast. If they do not happen, the discount on all the tires sold is adjusted at the end of the contract. 9618$$ CH27 09-06-02 15:01:24 PS COMMUNICATIONS MANAGEMENT 1. Answer: d A communicator can use all three media to communicate. 2. Answer: c The project manager has three main reasons for or interests in having good document control: effective communications, making sure that all necessary information is distributed and received by all those who need it; be able to reconstruct why certain decisions were made and the conditions under which they were made; historical value, so that lessons learned can be used in the future on other projects. 3. Answer: d From the Guide to the PMBOK 2000: ‘‘A communications management plan is a document which provides: • A collection and filing structure which details what methods will be used to gather and store various types of information. Procedures should also cover collecting and disseminating updates and corrections to previously distributed material. • A distribution structure which details to whom information (status reports, data, schedule, technical documentation, etc.) will be used to distribute vari- ous types of information. This structure must be compatible with the respon- sibilities and reporting relationships described by the project organization chart. • A description of the information to be distributed, including format, content, level of detail, and conventions/definitions to be used. • Production schedules showing when each type of communication will be produced. • Methods for accessing information between scheduled communications. • A method for updating and refining the communications management plan as the project progresses and develops.’’ 4. Answer: d 366 9618$$ CH27 09-06-02 15:01:25 PS 367 Communications Management 5. Answer: a The act of communicating involves an exchange of information between two parties. The definition of communications is: An exchange of information be- tween two parties with understanding. 6. Answer: a Brainstorming encourages team building if handled properly. Participants feel that they are part of the decision making process and have a sense of participa- tion. In the evaluation part of brainstorming, the participants’ thinking con- verges to a common agreement. 7. Answer: c The Delphi technique allows participants to be located in different parts of the world. It lends itself to using e-mail. In the process, the participants submit their ideas anonymously. The facilitator receives the ideas, categorizes them, and returns the list to the participants. 8. Answer: d Clairvoyance would be nice to have in many projects, but it is not practical for general use. 9. Answer: c The situation described is a conflict. As applied to human behavior it is a disagreement between individuals, which can vary from a mild disagreement to a win/lose, emotion-packed confrontation. There are two basic, but opposing, views of conflict, the traditional and the modern. The traditional view sees conflict as being primarily negative. In this view, troublemakers cause conflict and it should be avoided. The manager who views conflict in this way avoids admitting that it exists, keeps it under cover, and tries to suppress it. The con- temporary view sees conflict in a more positive light. According to this view, conflict is inevitable. It is a natural result of change and is frequently beneficial to the manager if properly managed. In particular, an atmosphere of tension, and hence conflict, is essential in any organization committed to developing or working with new ideas, for innovation is simply the process of bringing to- gether differing ideas and perspectives into a new and different synthesis. In resolving conflict there are several methods: forcing, withdrawal, smoothing, compromise, and problem solving. Of these, problem solving is the best, because the new facts allow the two disagreeing parties to resolve their differences with factual information and not opinion. 9618$$ CH27 09-06-02 15:01:25 PS 368 Preparing for the Project Management Professional Certification Exam 10. Answer: d Communication involves at least two people who may have very different back- grounds, experience, and education. Many times these individuals come from different cultures, speak different languages, and certainly have different drives. 11. Answer: b Unless there is reason to do so, the communication method used to respond to a communication should be the same form as the original communication. 12. Answer: c The project manager is responsible for the functions of the project team. As such the project manager is responsible for the communications that the team must make. The project manager has a wide range of responsibilities and is responsible for the guidance, motivation, output, planning, and control of the project team. 13. Answer: b Too many innovative ideas are smothered by negative thinking before they are given any chance to prove their worth. It is much easier to think of dozens of reasons why something will not work than to figure out how to make it work. People who are prone to this type of thinking, particularly if they overdo the ‘‘devil’s advocate’’ role, will act as communication blockers and seriously im- pede the process of team building. These people announce their presence by their typical negative responses when something new is suggested. 14. Answer: d The most effective way to communicate is to use several methods of communi- cating. Each method will make some of the message understood, and if all listed were used the level of understanding would be the highest. 15. Answer: d The project expediter has no directing responsibility for the work that is done on the project. This is left to the functional managers in this environment. Project managers have many responsibilities, one of which is communications. In comparing the roles of the project manager and the project expediter, the expediter’s primary role is communications. 16. Answer: d Past project reviews are not one of the tools and techniques that could be used for performance reporting. Variance analysis, earned value reports, and [...]... speak to the stakeholders, but the project impacts and plan for the correction should come first 6 Answer: c It is usually in the best interest of the project if the project team decides matters of personal time themselves unless there are significant reasons for the project 373 374 Preparing for the Project Management Professional Certification Exam team to be on site at certain hours or because they are... results of the project to formalize the acceptance of the products of the project Adminis­ trative closure should not be delayed until the project is complete Each major phase of the project should be closed to ensure that important information will not be lost Outputs from administrative closure are the project archives, the project closure, and the lessons learned document 19 Answer: b The sender...Communications Management 369 performance reviews are listed in the Guide to the PMBOK as tools and tech­ niques for performance reporting 17 Answer: a The expected project staffing is important to the communications technology since it will be necessary for the project staff to be able to use the communica­ tions tools effectively 18 Answer: a The administrative closure of the project consists of documenting the. .. systems PROFESSIONAL RESPONSIBILITY 1 Answer: c There should be a change procedure in the project to handle changes that might be initiated by customers The change procedure should include the cost for managing the change and the cost of developing the estimate for the effects of the change 2 Answer: c Estimating is just that, an estimating process Perhaps it would have been better for the project. .. ‘‘Communication barriers are the most often discussed condition leading to conflict in matrix and project structures These barriers exist to a great degree if the parties are separated from each other, either physically or by the timing of their contributions to the project In a project environment, functional and project managers frequently physically perform their work many miles apart, with the project manager... that the normal distribu­ tion curve is bell shaped, with a high point in the middle and an everdecreasing slope toward horizontal at the ends One of the important things about the normal distribution is that the formula for calculating it depends on only two factors, the mean value and the standard deviation The mean value locates the middle of the curve, or the peak The standard deviation shows whether... for any point on the horizontal axes and the mean value To use the tables, standardize the values desired by dividing them by the standard deviation In the previous example, the standard deviation was 10, the mean value was 100, and the desired probability was between ‘‘a’’ at 105 and ‘‘b’’ at 120 To use the table we must standardize the values: Z ‫( ס‬x ‫ מ‬mean value) / standard deviation Z for the. .. represented by arrows The tail of the arrow represents the start and the head represents the finish of the activity (the length of the arrow does not represent the expected duration of the activity) Activities are connected at points called nodes (usually drawn as small circles) to illustrate the sequence Administrative closure Generating, gathering, and disseminating infor­ mation to formalize project completion... achieved if there is not harmony and trust • They must recognize that communication is a two-way street The project manager does not just give orders; the project team must understand, partici­ pate, and agree before teamwork is achieved Feedback in both directions is necessary for team building and is vital for a continuing team effort 23 Answer: b There are seven people in the group, including the project. .. Z for the ‘‘a’’ value ‫0.2 ס 01 / 02 ס‬ From this we can find the probability in the Z table for 5 and the value for 2.0 Both of these values are on the same side of the mean, so we 380 Appendix: Probability Distributions must subtract the smaller one from the larger one to show the area we are concerned with (see figure A-4): P(Za) ‫5196 ס‬ P(Zb) ‫2774 ס‬ P (Za ‫ מ‬Zb) ‫%75.82 ס‬ Beta Distribution The . should be the same form as the original communication. 12. Answer: c The project manager is responsible for the functions of the project team. As such the project manager is responsible for the. allowance for the risk in the contracted price. This often means that the project team will pay the supplier for the cost of the risk regardless of whether the risk occurs. 3. Answer: c The project. every effort to make sure that the supplier is aware of the risk before the contract is signed. The project manager is obligated ethically to reveal the information to the supplier before the contract