TE AM FL Y This Page Intentionally Left Blank GLOSSARY AC Actual Cost See Actual cost Accountability matrix A structure that relates the project organization structure to the work breakdown structure to help ensure that each element of the project’s scope of work is assigned to a responsible individual Activity A unit of work performed as part of a project An activity usually has a duration, a cost, and resource requirements Activities can then be subdivided into tasks Activity definition Identifying the specific activities that must be performed in order to produce the various project deliverables Activity duration estimating Estimating the number of work periods that will be needed to complete individual activities Actual cost In the earned value reporting system, this is the amount of cost accumulated by doing work on the project Only work done on the project should be included in actual cost Formerly, ACWP, Actual Cost of Work Performed ACWP Actual Cost of Work Performed The actual cost that was incurred to complete the work that was actually performed during a given time period The Guide to the PMBOK 2000 has changed this term to AC, Actual Cost AD Activity Description A label used in a network diagram The activity description normally describes the scope of work of the activity ADM Arrow Diagramming Method A network diagramming technique in which activities are 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 information to formalize project completion AF Actual Finish date The actual date that an activity or task was completed Analogous estimate Using the actual cost of a previous, similar project as 383 384 Glossary the basis for estimating the cost of the current project It is frequently used to estimate total project costs when there is a limited amount of detailed information about the current project AOA Activity On Arrow A network diagramming technique in which activities are 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 AON Activity On Node A network diagramming technique in which activities are represented by boxes (or nodes) Activities are linked by precedence relations to show the sequence in which the activities are to be performed Application area A category of projects that have common elements not present in all projects Application areas are usually defined in terms of either the product of the projects (i.e., similar technologies or industry sectors) or the type of customer (e.g., internal versus external, government versus commercial) Application areas often overlap AS Actual Start date The point in time that work actually started on an activity As-of-date The point in time that separates actual data from future data Sometimes called the data date BAC Budget At Completion The estimated total cost of a project when it is completed Backward pass The calculation of late finish dates and late start dates for the uncompleted portions of all network activities Determined by working backwards through the network logic from the project’s end date Bar chart A graphic display of schedule-related information In the typical bar chart, activities of other project elements are listed down the left side of the chart, dates are shown across the top, and activity durations are shown as date-placed horizontal bars Baseline The original plan (for a project, a work package, or an activity), plus or minus approved changes Usually used with a modifier (e.g., cost baseline, schedule baseline, performance measurement baseline) Baseline finish date The point in time that work was scheduled to finish on an activity The scheduled finish date is normally within the range of dates delimited by the early finish date and the late finish date Baseline start date The point in time when work was scheduled to start Glossary 385 on an activity The scheduled start date is normally within the range of dates delimited by the early start date and the late start date BCWP Budgeted Cost of Work Performed The sum of the approved cost estimates (including any overhead allocation) for activities (or portions of activities) completed during a given period (usually project-todate) In the Guide to PMBOK 2000 this term has been changed to EV, Earned Value BCWS Budgeted Cost of Work Scheduled The sum of the approved cost estimates (including any overhead allocation) for activities (or portions of activities) scheduled to be performed during a given period (usually project-to-date) In the Guide to the PMBOK 2000, this term has been changed to PV, Planned Value Budget estimate An assessment of the likely quantitative result Usually applied to project costs and durations and should always include some indication of accuracy (e.g., ‫ע‬x percent) Usually used with a modifier (e.g., preliminary, conceptual, feasibility) Some application areas have specific modifiers that imply particular accuracy ranges (e.g., order-ofmagnitude estimate, budget estimate, and definitive estimate in engineering and construction projects) Calendar unit The smallest unit of time used in scheduling the project Calendar units are generally in hours, days, or weeks, but can also be in shift or even in minutes Used primarily in relation to project management software CCB Change Control Board A formally constituted group of stakeholders responsible for approving or rejecting changes to the project baselines Change control A collection of formal, documented procedures that defines the steps by which official project documents may be changed Change in scope Any change to the project scope A scope change almost always requires an adjustment to the project cost or schedule Chart of accounts Any numbering system used to monitor project costs by category (e.g., labor, supplies, materials) The project chart of accounts is usually based upon the corporate chart of accounts of the primary performing organization Charter A document issued by senior management that provides the project manager with the authority to apply organizational resources to project activities Code of accounts Any numbering system used to uniquely identify each element of the work breakdown structure 386 Glossary Communications planning Determining the information and communications needs of the project stakeholders: who needs what information, when will they need it, and how it will be given to them Concurrent engineering An approach to project staffing that, in its most general form, calls for implementers to be involved in the design phase Constraint A restriction or limitation set on the start or finish date of an activity Contingencies Plans and funding set aside to take care of anticipated, identified risks Contingency allowance A separately planned quantity used to allow for future situations that may be planned for only in part (sometimes called ‘‘known unknowns’’) For example, rework is certain, the amount of rework is not Contingency allowance may involve cost, schedule, or both Contingency allowances are intended to reduce the impact of missing cost or schedule objectives Contingency allowances are normally included in the project’s cost and schedule baselines Contingency planning The development of a management plan that identifies alternative strategies to be used to ensure project success if specified risk events occur Contingency reserve A separately planned quantity used to allow for furture situations that may be planned for only in part (sometimes called ‘‘known unknowns’’) For example, rework is certain, the amount of rework is not Contingency reserves may involve cost, schedule, or both Contingency reserves are intended to reduce the impact of missing cost or schedule objectives Contingency reserves are normally included in the project’s cost and schedule baselines Contract A contract is a mutually binding agreement that obligates the seller to provide the specified product and obligates the buyer to pay for it Contract administration Managing the relationship with the seller Contract closeout Completion and settlement of the contract, including resolution of all outstanding items Control The process of comparing actual performance with planned performance, analyzing variances, evaluating possible alternatives, and taking appropriate corrective action as needed Control charts Control charts are a graphic display of the results, over time and against established control limits, of a process They are used to determine if the process is ‘‘in control’’ or in need of adjustment Glossary 387 Corrective action Changes made to bring expected future performance of the project in line with the plan Cost The money and resources required to complete an activity Cost budgeting Allocating the cost estimates to individual project components Cost control Controlling changes to the project budget Cost estimating Estimating the cost of the resources needed to complete project activity Cost management The system used to maintain effective financial control of a project throughout its life cycle Cost of quality The costs incurred to ensure quality The cost of quality includes quality planning, quality control, quality assurance, and rework CPFF Cost Plus Fixed Fee contract A type of contract where the buyer reimburses the seller for the seller’s allowable costs (defined by the contract) plus a fixed amount of profit CPI Cost Performance Index The ratio of budgeted costs to actual costs (EV/AC) CPI is often used to predict the magnitude of a possible cost overrun using the following formula: Original cost estimate/CPI‫ס‬Project cost at completion CPIF Cost Plus Incentive Fee contract A type of contract where the buyer reimburses the seller for the seller’s allowable costs (defined by the contract), and the seller earns a fee if the seller meets defined performance criteria CPM Critical Path Method A network analysis technique used to predict project duration by analyzing which sequence of activities (path) has the least amount of float Crashing Taking actions necessary to decrease the total project duration after analyzing the options to determine how to get the maximum compression for the least cost Critical activity Any activity on a critical path Most commonly determined by using the critical path method Although some activities are ‘‘critical’’ in the dictionary sense without being on the critical path, this meaning is seldom used in the project context Critical path In a project network diagram, the series of activities that determine the earliest completion of the project The critical path will generally change from time to time as activities are completed ahead of or behind schedule Although normally calculated for the entire project, the critical path can also be determined for a milestone or subproject 388 Glossary The critical path is usually defined as those activities with float less than or equal to a specified value, often zero Current finish date The current estimate of the point in time when an activity will be completed Current start date The current estimate of the point in time when an activity will begin CV Cost Variance The difference between the EV and the AC DD Data Date The point in time that separates actual data from future data Also called the as-of-date Definitive estimate An assessment of the likely quantitative result Usually applied to project costs and durations and should always include some indication of accuracy (e.g., ‫ע‬x percent) Usually used with a modifier (e.g., preliminary, conceptual, feasibility) Some application areas have specific modifiers that imply particular accuracy ranges (e.g., order-of-magnitude estimate, budget estimate, and definitive estimate in engineering and construction projects) Deliverable Any measurable, tangible, verifiable outcome, result, or item that must be produced to complete a project or part of a project Often used more narrowly in reference to an external deliverable, which is a deliverable that is subject to approval by the project sponsor or customer Dependencies In a project, the relationships between tasks For example, a task may not begin until another task is complete DU Duration The number of work periods (not including holidays or other nonworking periods) required to complete an activity or other project element Usually expressed as workdays or work weeks Sometimes incorrectly equated with elapsed time Should not be confused with effort Dummy activity An activity with zero duration used to show a logical relationship in the arrow diagramming method Dummy activities are used when logical relationships cannot be completely or correctly described with regular activity arrows Dummies are shown graphically as a broken line headed by an arrow Duration compression Shortening the project schedule without reducing the project scope Duration compression is not always possible and often requires an increase in project cost EAC Estimate At Completion The expected total cost of an activity, a group of activities, or the project when the defined scope of work has been completed Most techniques for forecasting EAC include some Glossary 389 adjustment of the original cost estimate based on project performance to date Often shown as: EAC ‫ ס‬Actuals-to-date ‫ ם‬ETC Earned value analysis A method for measuring project performance It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule performance is as planned EF Early Finish date In the critical path method, the earliest possible point in time on which the uncompleted portions of an activity (or the project) can finish based on the network logic and any schedule constraints Early finish dates can change as the project progresses and changes are made to the project plan Effort The number of labor units necessary to complete an activity or other project element Effort is usually expressed in hours, days, or weeks and should not be confused with duration ES Early Start date In the critical path method, the earliest possible point in time on which an activity (or the project) can finish based on the network logic and any schedule constraints Early start dates can change as the project progresses and changes are made to the project plan Estimate An assessment of the likely quantitative result Usually applied to project costs and durations and should always include some indication of accuracy (e.g., ‫ע‬x percent) Usually used with a modifier (e.g., preliminary, conceptual, feasibility) Some application areas have specific modifiers that imply particular accuracy ranges (e.g., order-of-magnitude estimate, budget estimate, and definitive estimate in engineering and construction projects) ETC Estimate (or estimated) To Complete (or completion) The expected additional cost needed to complete an activity, a group of activities, or the project Most techniques for forecasting ETC include some adjustment to the original estimate based on project performance to date EV Earned Value A method for measuring project performance It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule performance are as planned Event-on-node A network diagramming technique in which events are represented by boxes (or nodes) connected by arrows to show the sequence in which the events are to occur Exception report Document that includes only major variations from plan (rather than all variations) Expected monetary value The product of an event’s probability of occur- 390 Glossary rence and the gain or loss that will result For example, if there is a 50 percent probability that it will rain, and rain will result in a $100 loss, the expected monetary value of the rain event is $50 (.5 ‫.)001$ ן‬ Fast tracking Compressing the project schedule by overlapping activities that would normally be done in sequence, such as design and construction FF (1) Free Float The amount of time an activity can be delayed without delaying the early start of any immediately following activities (2) Finish-to-Finish A dependency between two activities, where one activity must finish before the other activity can finish FFP Firm Fixed Price contract A type of contract where the buyer pays the seller a set amount (defined by the contract) regardless of the seller’s cost Finish date A point in time associated with an activity’s completion Usually qualified by one of the following: actual, planned, estimated, scheduled, early, late, baseline, target, or current Fixed price contract A type of contract where the buyer pays the seller a set amount (defined by the contract) regardless of the seller’s cost Float The amount of time that an activity may be delayed from its early start without delaying the project finish date Float is a mathematical calculation and can change as the project progresses and changes are made to the project plan Also called slack Forecast final cost The expected total cost of an activity, a group of activities, or the project when the defined scope of work has been completed Same as Estimate At Completion (EAC) Most techniques for forecasting final cost include some adjustment of the original cost estimate based on project performance to date Often shown as EAC ‫ ס‬Actualsto-date ‫ ם‬ETC Forward pass The calculation of the early start and early finish dates for the uncompleted portions of all network activities FPIF Fixed Price Incentive Fee contract A type of contract where the buyer pays the seller a set amount (defined by the contract), and the seller can earn an additional amount if the seller meets defined performance criteria FS Finish-to-Start The dependency between two activities where one activity must finish before the other activity can start Functional manager A manager responsible for activities in a specialized department or function (e.g., engineering, manufacturing, marketing) Functional organization An organization structure in which staff are Glossary 391 grouped hierarchically by specialty (e.g., production, marketing, engineering, and accounting at the top level, with engineering, further divided into mechanical, electrical, and others) Gantt chart A graphic display of schedule-related information In the typical bar chart, activities of other project elements are listed down the left side of the chart, dates are shown across the top, and activity durations are shown as date-placed horizontal bars GERT Graphical Evaluation and Review Technique A network analysis technique that allows for conditional and probabilistic treatment of logical relationships (i.e., some activities may not be performed) Grade A category or rank used to distinguish items that have the same functional use (e.g., ‘‘hammer’’) but not share the same requirements for quality (e.g., different hammers may need to withstand different amounts of force) Hammock An aggregate or summary activity (a group of related activities is shown as one and reported at a summary level) A hammock may or may not have an internal sequence Hanger An unintended break in a network path Hangers are usually caused by missing activities or missing logical relationships IFB Invitation For Bid Generally, this term is equivalent to request for proposal However, in some application areas it may have a narrower or more specific meaning Information distribution Making needed information available to project stakeholders in a timely manner Initiation Committing the organization to begin a project phase Integrated cost/schedule reporting A method for measuring project performance It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule performance is as planned Key event schedule A summary-level schedule that identifies the major activities and key milestones Lag A modification of a logical relationship that directs a delay in the successor task For example, in a finish-to-start dependency with a tenday lag, the successor activity cannot start until ten days after the predecessor has finished Lead A modification of a logical relationship that allows an acceleration of the successor task For example, in a finish-to-start dependency with a ten-day lead, the successor activity can start ten days before the predecessor has finished Glossary 397 nication among stakeholders, and to document approved scope, cost, and schedule baselines A project plan may be a summary or detailed Project plan development Taking the results of other planning processes and putting them into a consistent, coherent document Project plan execution Carrying out the project plan by performing the activities included therein Project planning The development and maintenance of the project plan Project procurement management A subset of project management that includes the processes required to acquire goods and services from outside the performing organization It consists of procurement planning, solicitation planning, solicitation, source selection, contract administration, and contract closeout Project quality management A subset of project management that includes the processes required to ensure that the project will satisfy the needs for which it was undertaken It consists of quality planning, quality assurance, and quality control Project risk management A subset of project management that includes the processes concerned with identifying, analyzing, and responding to project risk It consists of risk identification, risk quantification, risk response development, and risk response control Project schedule The planned dates for performing activities, and the planned dates for meeting milestones Project scope management A subset of project management that includes the processes required to ensure that the project includes all of the work required, and only the work required, to complete the project successfully It consists of initiation, scope planning, scope definition, scope verification, and scope change control Project team members The people who report either directly or indirectly to the project manager Project time management A subset of project management that includes the processes required to ensure timely completion of the project It consists of activity definition, activity sequencing, activity duration estimating, schedule development, and schedule control Projectized organization Any organizational structure in which the project manager has full authority to assign priorities and to direct the work of individuals assigned to the project PS Planned Start date The point in time work is scheduled to start on an activity PV See Planned Value 398 Glossary QA Quality Assurance (1) The process of evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards (2) The organizational unit that is assigned responsibility for quality assurance QC Quality Control (1) The process of monitoring specific project results to determine if they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance (2) The organizational unit that is assigned responsibility for quality control Quality planning Identifying which quality standards are relevant to the project and determining how to satisfy them RAM Responsibility Assignment Matrix A structure that relates the project organization structure to the work breakdown structure to help ensure that each element of the project’s scope of work is assigned to a responsible individual RDU Remaining Duration The time needed to complete an activity Reserve A provision in the project plan to mitigate cost and/or schedule risk Often used with a modifier (e.g., management reserve, contingency reserve) to provide further detail on what types of risk are meant to be mitigated The specified meaning of the modified term varies by application area Resource leveling Any form of network analysis in which scheduling decisions (start and finish dates) are driven by resource management concerns (e.g., limited resource availability or difficult-to-manage changes in resource levels) Resource-limited schedule A project schedule whose start and finish dates reflect expected resource availability The final project schedule should always be resource limited Resource planning Determining what resources (people, equipment, materials) are needed in what quantities to perform project activities Responsibility chart A structure that relates the project organization structure to the work breakdown structure to help ensure that each element of the project’s scope of work is assigned to a responsible individual Responsibility matrix A structure that relates the project organization structure to the work breakdown structure to help ensure that each element of the project’s scope of work is assigned to a responsible individual Glossary 399 Retainage A portion of a contract payment that is held until contract completion in order to ensure full performance of the contract terms RFP Request For Proposal A type of bid document used to solicit proposals from prospective sellers of products or services RFQ Request For Quotation Generally, this term is equivalent to request for proposal However, in some application areas it may have a narrower or more specific meaning Risk event A discrete occurrence that may affect the project for better or worse Risk identification Determining which risk events are likely to affect the project Risk quantification Evaluating the probability of risk event occurrence and effect Risk response control Executing the risk management plan in order to respond to risk events over the course of the project Risk response development Defining enhancement steps for opportunities and mitigation steps for threats S-curve Graphic display of cumulative costs, labor hours, or other quantities plotted against time The name derives from the S-like shape of the curve (flatter at the beginning and end, steeper in the middle) produced on a project that starts slowly, accelerates, and then trails off Schedule The planned dates for performing activities and the planned dates for meeting milestones Schedule analysis The process of identifying early and late start and finish dates for the uncompleted portions of project activities Schedule compression Shortening the project schedule without reducing the project scope Duration compression is not always possible and often requires an increase in project cost Schedule control Influencing the factors that create schedule changes to ensure that changes are beneficial, determining that the schedule has changed, and managing the actual changes when and as they occur Schedule development Analyzing activity sequences, activity durations, and resource requirements to create the project schedule Scope The work that must be done in order to deliver a product with the specified features and functions, and the features and functions that are to be included in a product or service Scope baseline The original plan (for a project, a work package, or an activity), plus or minus approved changes 400 Glossary Scope change Any change to the project scope A scope change almost always requires an adjustment to the project cost or schedule Scope change control Influencing the factors that create scope changes to ensure that changes are beneficial, determining that a scope change has occurred, and managing the actual changes when and if they occur Scope definition Decomposing the major deliverables into smaller, more manageable components to provide better control Scope planning Developing a written scope statement that includes the project justification, the major deliverables, and the project objectives Scope verification Ensuring that all identified project deliverables have been completed satisfactorily SF (1) Scheduled Finish date The point in time when work is scheduled to finish on an activity (2) Start-to-Finish, indicating that the ‘‘from’’ activity must start before the ‘‘to’’ activity can finish Should-cost estimate An estimate of the cost of a product or service used to provide an assessment of the reasonableness of a prospective contractor’s proposed cost Slack Term used in PERT for float Solicitation Obtaining quotations, bids, offers, or proposals as appropriate Solicitation planning Documenting product requirements and identifying potential sources Source selection Choosing from among potential contractors SOW Statement Of Work A narrative description of products or services to be supplied under contract SPI Scheduled Performance Index The ratio of work performed to work scheduled (EV/PV) SS (1) Scheduled Start date The point in time work is scheduled to start on an activity (2) Start-to-Start A type of dependency relationship where the ‘‘from’’ activity has to start before the ‘‘to’’ activity can start Staff acquisition Getting the human resources needed assigned to and working on the project Stakeholders Individuals and organizations who are involved in or may be affected by project activities Start date A point in time associated with an activity’s start Subnetwork A subdivision of a project network diagram usually representing some form of subproject Successor activity (1) In the arrow diagramming method, the activity Glossary 401 that departs a node (2) In the precedence diagramming method, the ‘‘to’’ activity SV Schedule Variance (1) Any difference between the scheduled completion of an activity and the actual completion of that activity (2) In earned value, EV less PV Target schedule The original plan (for a project, a work package, or an activity), plus or minus approved changes Task A unit of work performed as part of a project A task usually has a duration, a cost, and resource requirements Tasks may be subdivisions of activities TC Target Completion date An imposed date that constrains or otherwise modifies the network analysis Team development Developing individual and group skills to enhance project performance Team members The people who report either directly or indirectly to the project manager TF (1) Total Float The total amount of float available to an activity (2) Target Finish date The date work on an activity is planned (targeted) to finish Time-scaled network diagram Any project network diagram drawn in such a way that the positioning and length of the activity represents its duration Essentially, it is a bar chart that includes network logic TQM Total Quality Management A common approach to implementing a quality improvement program within an organization TS Target Start date The date work is planned (targeted) to start on an activity WBS Work Breakdown Structure A deliverable-oriented grouping of project elements that organizes and defines the total scope of the project Each descending level represents an increasingly detailed definition of a project component Project components may be products or services Work item An element of work performed during the course of a project Work package A deliverable at the lowest level of the work breakdown structure A work package may be divided into activities Workaround A response to a negative risk event Distinguished from a contingency plan in that a workaround is not planned in advance of the occurrence of the risk event TE AM FL Y This Page Intentionally Left Blank BIBLIOGRAPHY Bach, George Leland 1968 Economics: An Introduction to Analysis and Policy 6th ed Englewood Cliffs, NJ: Prentice-Hall Cleland, David I.; Bursic, Karen M.; Puerzer, Richard; and Vlasak, A Yaroslav, Eds 1998 Project Management Casebook Newtown Square, PA: Project Management Institute Eckes, George 2001 The Six Sigma Revolution: How General Electric and Others Turned Process into Profits New York: Wiley Ferraro, Gary P 1998 The Cultural Dimension of International Business Upper Saddle River, NJ: Prentice-Hall Frame, J Davidson 1995 Managing Projects in Organizations Rev ed San Francisco, CA: Jossey-Bass Goldratt, Eliyahu M 1994 It’s Not Luck Great Barrington, MA: The North River Press Grant, Eugene L., and Leavenworth, Richard S 1980 Statistical Quality Control 5th ed New York: McGraw-Hill Hamburg, Morris, 1983 Statistical Analysis for Decision Making 3rd ed New York: Harcourt Brace Jovanovich Hampton, David R.; Summer, Charles E.; and Webber, Ross A 1982 Organizational Behavior and the Practice of Management 4th ed Glenview, IL: Scott, Foresman Hellriegel, Don, and Slocum, Jr., John W 1982 Management 3rd ed Reading, MA: Addison Wesley Hendrick, Thomas E., and Moore, Franklin G 1985 Production/Operations Management 9th ed Homewood, IL: Richard D Irwin Imai, Masaaki 1986 Kaizen: The Key to Japan’s Competitive Success New York: McGraw-Hill Ishikawa, Kaoru 1980 Guide to Quality Control Tokyo: JUSE Press, Ltd Kerzner, Harold 1984 Project Management: A Systems Approach to Planning, Scheduling, and Controlling 2nd ed New York: Van Nostrand Reinhold Lewis, James P 1991 Project Planning, Scheduling and Control Chicago, IL: Probus Lial, Margaret L., and Miller, Charles D 1979 Mathematics with Applica403 404 Bibliography tions in the Management, Natural, and Social Sciences 2nd ed Glenview, IL: Scott, Foresman Meredith, Jack R., and Mantel, Jr., Samuel J 1995 Project Management: A Managerial Approach 3rd ed New York: Wiley Morrison, Terri; Conaway, Wayne A.; and Borden, George A 1994 Kiss, Bow or Shake Hands Holbrook, MA: Adams Media Corp Newbold, Paul 1986 Principles of Management Science Englewood Cliffs, NJ: Prentice-Hall Project Management Institute 2000 Project Management Professional (PMP) Role Delineation Study Newtown Square, PA: Project Management Institute Project Management Institute Standards Committee 2000 A Guide to the Project Management Body of Knowledge Upper Darby, PA: Project Management Institute Sashkin, Marshall, and Sashkin, Molly G 1994 The New Teamwork New York: AMA Membership Publications Division Scholtes, Peter R et al 1995 The Team Handbook Madison, WI: Joiner Associates Tenner, Arthur R., and DeToro, Irving J 1992 Total Quality Management Reading, MA: Addison-Wesley Timms, Howard L 1966 The Production Function in Business Homewood, IL: Richard D Irwin Wetherill, G Barrie 1977 Sampling Inspection and Quality Control 2nd ed London: Chapman and Hall Ltd Williams, Terry M., Ed 1996 Proceedings of the NATO Advanced Research Workshop on Managing and Modelling Complex Projects Dordrecht, The Netherlands, and Kiev, Ukraine: Kluwer Academic Pub INDEX accelerated depreciation, 101–102 acceptable quality level (AQL), 171 acceptance, of risks, 160–161 activity, definition of, 46–47 activity duration, 56–57 estimating, 46 span vs., 56–57 activity level of work package, 27–28 activity on arrow diagramming (AOA), 47–49 activity sequencing, 46, 47 actual cost (AC), 87 actual cost of work performed (ACWP), 87 addition rule, 145–147 affinity diagramming, 158 analogous estimates, 80–81 analogy techniques, for risk management, 138, 140 AQL (acceptable quality level), 171 assets, 96 attribute inspections, 169–170 average rate of return on investment, 34 avoidance, 159 award process, 185 balanced matrix organizations, 108–109 balance sheets, 96–98 baselines cost, 83, 132 schedule, 132 scope, 23–25, 132 benchmarking, 179 benefit cost ratios, 94 best case/worst case situations, 151 bidding, 20–23 bill of material (BOM), 30 blanket orders, 192–193 bottom up cost estimates, 80 brainstorming, 135, 139 breakdown structures, 30 see also work breakdown structure (WBS) break even charts, 32–33 break even point, 32 budget at completion (BAC), 90–91 budgeted cost of work performed (BCWP), 87 budgeted cost of work scheduled (BCWS), 86–87 budget estimates, 80 buffering schedules, 63–67 cash flow analysis, 31–32, 35, 41–43 cause and effect diagrams, 172 chain networks, 205 change management, 30–31 checklists, 138, 139 for quality control, 178 circular networks, 205 clients, see stakeholders closing project domain, of PMI exam, 222–223 coercive power, 121–122 commodities, 190–192 communications barriers to, 198–199 formal, 201 free and open model of, 206–207 general model of, 195–197 improving, 199 informal, 201–202 405 406 communications (continued) networks for, 204–207 verbal, 200 see also listening; networking communications management, 195 comparative ranking, of risks, 156–157 compromise type of conflict resolution, 126 conduct, code of professional, 216–217 conflict resolution, 124–127 compromise type of, 126 forcing style of, 125 problem solving method of, 126–127 smoothing style of, 126 withdrawal type of, 127 contracting process, 185 contracting risks, 160 contracts, 181 definition of, 182 life cycle process for, 183–185 types of, 185–190 contractual WBS (CWBS), 30 control charts, 175–178 controlling project domain, of PMI exam, 222 cost, and relationship with price, 19–20 cost baseline, 83, 132 cost budgeting, 83 cost control, 85 see also earned value reporting systems cost estimates analogous, 80–81 bottom up, 80 definition of, 79 definitive, 81–83, 84 parametric, 81 top down, 80 types of, 79–83 cost management definition of, 77 reasons for needing, 77–78 cost performance index (CPI), 91 Index cost plus contracts, 188–190 award fee, 190 fixed fee, 189–190 incentive fee, 190 cost variance (CV), 91–92 CPM (critical path method), 60–61 crashing, 61–62 Crawford slip technique, 19, 137, 139 critical path method (CPM), 60–61, 67–68 customers, see stakeholders danglers, 56 decision trees, 151–155 defects, costs of, 168 definitive estimates, 81–83, 84 deliverables, 24–25 Delphi technique, 135–136, 139 Demming, Edward, 167–169 fourteen points of, 169 depreciation, 100 accelerated, 101–102 double declining balances method, 102 straight line, 100–101 sum of the years’ digits method, 101–102 diagramming, 55–56 activity on arrow method of, 47–49 logical precedence, 56 precedence method of, 49–50 for quality control, 172 techniques of, 138, 140 distance conferencing, 201 ‘‘divide and conquer’’ principle, 26 documentation reviews, 135 double declining balances method of depreciation, 102 duration, 56–57 estimating, 46 early finish date, 58 earned value (EV), 87 Index earned value reporting systems, 85 calculated values for, 90–94 cumulative reporting and, 85–86 data collection difficulties for, 87–89 depreciation for, 100–102 examples of, 89–90 financial measures for, 94–100 measurements needed for, 86–87 reporting work completed for, 89 economic value added (EVA), 99–100 effort, 56 80–20 rule, 172 e-mail, 200 estimate at completion (EAC), 92–93 estimates, see cost estimates estimate to complete (ETC), 994 evaluations, personal, see performance reviews events finish, 56 probability for, 144 start, 56 executing project domain, of PMI exam, 221–222 expectancy theory, 113–115 expected values, 150–151 expert interviews, 137–138, 139 expert power, 123 fast tracking, 61–62 50–50 rule, 89 finish dates, 58 finish events, 56 finish-finish (FF) relationships, 53 finish-start (FS) relationships, 50–52 fishbone diagram, 172 fixed price contracts, 186–188 firm, 186–187 plus economic adjustment, 187–188 plus incentive, 188 float, 60 flowcharts, for quality control, 172 407 forcing style of conflict resolution, 125 Ford, Henry, 9, 111 formal communications, 201 forward buying, 192 fourteen points, Deming’s, 169 free and open model of communication, 206–207 free float, 68 Gantt chart, 85 grade, vs quality, 165–166 Guide to the Project Management Body of Knowledge (PMBOK), Herzberg, Fredrick, 117–118 hierarchy of needs concept of motivation, 115–117 histograms, resource, 66–67 hygiene factors, 117–118 impact analysis, 149–155 income statements, 96–97 indexes, 92 individual pieces of work, 78–79 informal communications, 201–202 initiating project domain, of PMI exam, 219–220 inspections, for quality control, 169–170 internal rate of return on investment, 39–44 International Organization for Standardization (ISO), Ishikawa, Kaoru, 172 job design, 118–121 job enlargement, 119–120 job enrichment, 120–121 justifications, project, 31–44 Kaizen method, for quality control, 179 known risks, 162 408 lags, 54–55 leads, 54–55 learning curve theory, 111–112 legitimate power, 122 liabilities, 96 life cycle costing, 94 listening skills, improving, 202–204 see also communications logical relationships diagramming, 55–56 finish-finish (FF), 53 finish-start (FS), 5052 start-finish (SF), 53–54 start-start (SS), 52–53 McGregor, Douglas, 123–124 make or buy decisions, 182–183 management by walking around, 207–209 Maslow, Abraham, 115–117 matrix organizations, 10–12 balanced, 108–109 performance reviews in, 209–210 project managers in, 105–110 strong, 106–107 weak, 106–108 measurement inspections, 169–170 meetings, managing, 127–130 mitigation, of risks, 161 Monte Carlo simulation, 73–75 motivation in Depression era, 112 expectancy theory of, 113–115 hierarchy of needs concept of, 115–117 in Industrial Revolution, 110 learning curve theory and, 111–112 motivation/hygiene theory of, 117–118 in post–World War II, 112 scientific management and, 111, 113–114 in World War II, 112 multiplication rule, 147–149 Index needs, hierarchy of, 115–117 net operating profit after taxes (NOPAT), 97–98, 99, 101 net profit, 97–98 network diagrams, building, 57–63 networking, 204–207 see also communications networks, communication chain, 205 circular, 205 free and open, 206–207 wheel, 205–206 nodes, 55–56 nominal group technique, 136–137, 139 order of magnitude estimates, 79–80 organizational breakdown structure (OBS), 30 organizations matrix, 10–12, 106–109, 209–210 project, 7–8 traditional, 8–10 overbidding, 20–23 owners equity, 96 parametric cost estimates, 81 Pareto, Vilfredo, 172 Pareto charts, 172–175 payback period, 32 performance reviews, 109–110, 209–210 PERT (program evaluation and review technique), 68–73 planned value (PV), 86–87 planning project domain, of PMI exam, 220–221 power coercive, 121–122 definition of, 121 expert, 123 legitimate, 122 Index referent, 122–123 representative, 123 reward, 121–122 precedence diagramming method (PDM), 49–51 presentations, 201 present value of money, 34–39 prevention, costs of, 168 price, and relationship with cost, 19–20 probability analysis, 143–145 addition rule in, 145–147 multiplication rule in, 147–149 problem solving method of conflict resolution, 126–127 procurement management blanket orders for, 192–193 for commodities, 190–191 forward buying and, 192 splitting orders and, 193 for unique products and services, 192 professional conduct, code of, 216–217 professional responsibility, project managers and, 211–216, 223–224 program evaluation and review technique (PERT), 68–73 programs, definition of, 2–3 project charters, 17–18 project cost, 78 project desirability, 94 project life cycle, 78 project management, advantages of, 6–7 definition of, organizing for, 7–12 power of, 27 stakeholders and, 4–5 Project Management Institute (PMI), Project Management Institute (PMI) examination, 218–219 closing project domain of, 222–223 controlling project domain of, 222 executing project domain of, 221–222 409 initiating project domain of, 219–220 planning project domain of, 220–221 professional responsibility domain of, 223–224 project management office, 12 project managers in balanced matrix organizations, 108–109 code of professional conduct for, 216–217 professional responsibilities of, 211–216 roles and responsibilities of, 104–105 in strong matrix organizations, 106–107 successful projects and, 13 in weak matrix organizations, 106–108 project office, 12–13 project organizations, 7–8 projects characteristics of, constraints/assumptions of, 18 definition of, 2–4 identifying key stakeholders of, 18–19 initiating, 17–23 justification of, 31–44 life cycles of, 14 processes of, 14–15 scope baseline of, 23–25 quality cost of, 167–169 vs grade, 165–166 management of, 165–166 planning for, 166–167 quality assurance, 166, 167 quality circles, 120 quality control, 166 attribute inspections for, 169–170 410 quality control (continued) benchmarking for, 179 cause and effect diagrams for, 172 checklists for, 178 control charts for, 175–178 flowcharting for, 172 Kaizen method for, 178 measurement inspections for, 169–170 Pareto charts for, 172–175 sampling inspections for, 169–172 referent power, 122–123 relationships, see diagramming; logical relationships representative power, 123 requirement process, 183–184 requisition process, 184–185 resource availability, 66 resource breakdown structure (RBS), 30 resource histogram, 66–67 resource leveling function, 66 resource requirement, 66 return on assets (ROA), 98–99 return on investment (ROI) average rate of, 34 internal rate of, 39–44 return on sales (ROS), 97–98 reward power, 121–122 risk management components of, 133 process of, 133 risks, 133 affinity diagramming for, 158 budgeting for, 162 comparative ranking of, 156–157 evaluating, 140–149 grouping, 157–158 impacts of, 149–155 known, 162 monitoring/controlling, 162–163 as opportunities, 161 Index quantification of, 155–158 recording, 138–140 response planning for, 158–161 techniques for identifying, 134–140 tolerances for, 141–143 unknown, 162 risk strategies, 159 rule of seven, 177–178 sampling inspections, 169–172 schedule control, 46 schedule development, 46 schedule performance index (SPI), 91–92 schedules buffering, 63–67 sequence for developing, 57–62 schedule variance (SV), 91–92 scientific management, 9, 111, 113–114 scope baselines, project, 23–25, 132 scope definition, 16–17 self-actualization, 117 seven, rule of, 177–178 slack, 60 smoothing style of conflict resolution, 126 solicitation process, 185 span vs duration, of activities, 56–57 split activity, 57 split orders, 193 sponsors, see stakeholders stakeholders, identifying key, 18–19 project management and, 4–5 scope definition and, 16–17 start dates, 58 start events, 55–56 start-finish (SF) relationships, 53–54 start-start (SS) relationships, 52–53 straight line depreciation, 100–101 strong matrix organizations, 106–107 sum of the years’ digits method of depreciation, 101–102 Index sunk costs, 96 systems management, 29 task/activity level of work package, 27–28 Taylor, Frederick, 9, 111 Theory X/Theory Y managers, 123–124 time management definition of, 46 processes required for proper, 46 top down cost estimates, 80 traditional organizations, 8–10 transferring risks, 159–160 20–80 rule, 89 underbidding, 20–23 unknown risks, 162 variance cost, 91–92 schedule, 91–92 verbal communications, 200 411 walking around, management by, 207–209 WBS, see work breakdown structure (WBS) weak matrix organizations, 106–108 wheel networks, 205–206 withdrawal style of conflict resolution, 127 work breakdown structure (WBS), 25– 28, 78–79 creating, 26 definition of, 26 systems approach to, 28–31 work package level of, 26–28 work calendar, 65–66 work design, 118–121 work package level, 26–28 worst case/best case situations, 151 written communications, 200 zero float, 61 0–100 rule, 89 ... 218 ? ?219 closing project domain of, 222–223 controlling project domain of, 222 executing project domain of, 221? ??222 409 initiating project domain of, 219 –220 planning project domain of, 220– 221. .. of the project team who are directly involved in project management activities On some smaller projects, the project management team may include virtually all of the project team members Project. .. Principles of Management Science Englewood Cliffs, NJ: Prentice-Hall Project Management Institute 2000 Project Management Professional (PMP) Role Delineation Study Newtown Square, PA: Project Management