Chapter 5
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What is the schedule variance for the project described?

  • Twelve weeks
  • $50,000
  • Three weeks
  • $40,000 (correct)

    • What do a CPI value of 1.25 and an SPI value of 1.33 for a project indicate?

  • The project is making slower progress and is costing more than planned.
  • The project is making slower progress and is costing less than planned.
  • The project is making faster progress and is costing more than planned.
  • The project is making faster progress and is costing less than planned. (correct)

    • Which aspects of a project may be influenced by a budget cut due to economic downturn?

  • Scope, schedule, quality, and resources
  • Scope, schedule, quality, resources, risk, and possibly some other aspects (correct)
  • Scope, schedule, and quality only
  • Scope and schedule only

    • If an influential stakeholder requests to complete the project earlier than planned, which two parameters are most likely to be affected by this change?

    <p>Schedule and deliverables</p> Signup and view all the answers

    Assume that a project manager wants to compress the schedule. Which technique could they utilize to achieve this goal effectively?

    <p>Crashing</p> Signup and view all the answers

    What does a negative schedule variance (SV) indicate?

    <p>The project is behind schedule</p> Signup and view all the answers

    How is the Schedule Performance Index (SPI) calculated?

    <p>EV / PV</p> Signup and view all the answers

    What does a Schedule Performance Index (SPI) of 0.75 imply?

    <p>The project is progressing at 75% of the planned pace</p> Signup and view all the answers

    Why is the Schedule Performance Index (SPI) important in project management?

    <p>To assess how well the project is adhering to the planned schedule</p> Signup and view all the answers

    How can a project manager use the graphical representation of performance variables over time?

    <p>To visualize the project's progress against planned values</p> Signup and view all the answers

    Which of the following is true about the Triple Constraint in project management?

    <p>Scope, schedule, and cost are the three sides of the constraint triangle that cannot all change simultaneously.</p> Signup and view all the answers

    What does the term 'schedule' refer to in project management?

    <p>The work performed over a certain time period</p> Signup and view all the answers

    In a situation where a project is behind schedule with no extra resources available, what must change according to the Triple Constraint?

    <p>Scope, schedule, or cost - at least one of them must change.</p> Signup and view all the answers

    Which of the following parameters are fundamental in Earned Value Management (EVM)?

    <p>Planned value (PV), earned value (EV), actual cost (AC)</p> Signup and view all the answers

    What approach can a project manager take to meet a deadline approaching within a week when the project is behind schedule?

    <p>Modify the scope of the project by prioritizing features to be implemented.</p> Signup and view all the answers

    How does the 'time is money' principle relate to the relationship between cost and schedule?

    <p>It shows that performing a schedule activity incurs a cost</p> Signup and view all the answers

    Which parameter might need to change if a project manager wants to meet a deadline but does not have extra resources available?

    <p>Project scope by reducing the number of planned features.</p> Signup and view all the answers

    What does the Triple Constraint indicate about making changes in project management?

    <p>Changes in one aspect of a project will affect at least one other aspect.</p> Signup and view all the answers

    In the context of a project, what does the term 'triple constraint' refer to?

    <p>The relationship between time, cost, and performance</p> Signup and view all the answers

    Which project management objective does the Earned Value Technique (EVT) help in monitoring?

    <p>Tracking project schedule and cost performance</p> Signup and view all the answers

    In project management, contingency reserves are primarily used for what purpose?

    <p>Dealing with uncertainties in schedule duration and cost estimates</p> Signup and view all the answers

    Which type of estimation is less time-consuming but also less accurate than parametric and bottom-up estimation?

    <p>Analogous estimation</p> Signup and view all the answers

    What formula is used for Cost Performance Analysis in project management?

    <p>CPI = EV / AC</p> Signup and view all the answers

    What formula is used for Schedule Performance Analysis in project management?

    <p>PV = BAC ⫻ (Time passed / Total schedule time)</p> Signup and view all the answers

    When putting contingency reserves into project plans, which of the following statements about contingency reserves is NOT true?

    <p>Contingency reserves are meant solely for stakeholder expectations</p> Signup and view all the answers

    What is the purpose of controlling costs in project management?

    <p>To keep cost overruns within planned acceptable limits.</p> Signup and view all the answers

    Which document describes how the cost will be monitored and controlled in a project?

    <p>Cost management plan</p> Signup and view all the answers

    What is the purpose of the cost performance baseline in project management?

    <p>To compare actual performance with planned cost</p> Signup and view all the answers

    Why must any change to the budget be approved before implementation?

    <p>To prevent unapproved changes from occurring</p> Signup and view all the answers

    What are the input items to the Control Cost process in project management?

    <p>Cost management plan and work performance information</p> Signup and view all the answers

    What is planned value (PV) in project management?

    <p>The value that was planned to create in the time spent so far</p> Signup and view all the answers

    How is planned value (PV) calculated in project management?

    <p>$600,000 ⫻ (4 weeks / 12 weeks)</p> Signup and view all the answers

    What does PV represent in project management?

    <p>The planned schedule in terms of cost</p> Signup and view all the answers

    Which formula is used to calculate the planned value for a project?

    <p>$600,000 ⫻ (time passed / total schedule time)</p> Signup and view all the answers

    What does schedule variance (SV) measure in project management?

    <p>The difference between earned value and planned value</p> Signup and view all the answers

    Why is it important to calculate planned value (PV) in project management?

    <p>To determine if the project is on track in terms of cost and schedule</p> Signup and view all the answers

    How does planned value relate to budget at completion (BAC) in project management?

    <p>Planned value is equal to BAC at any given stage of the project</p> Signup and view all the answers

    What is the main purpose of calculating schedule variance (SV) in project management?

    <p>To measure the difference between earned value and planned value</p> Signup and view all the answers

    From the provided text, what does Planned Value represent in terms of cost?

    <p>The planned schedule in terms of cost</p> Signup and view all the answers

    Variance analysis is not a technique used to assess the magnitude of variation in the value of a variable from the baseline.

    <p>False</p> Signup and view all the answers

    The earned value technique (EVT) is commonly used to measure only the scope and schedule performance of a project.

    <p>False</p> Signup and view all the answers

    In earned value management (EVM), the budgeted cost of work scheduled is compared with the actual cost of work performed.

    <p>True</p> Signup and view all the answers

    The project cost and project schedule are unrelated to each other according to earned value management principles.

    <p>False</p> Signup and view all the answers

    Variance analysis is primarily focused on assessing deviations in project parameters such as quality and risk.

    <p>False</p> Signup and view all the answers

    Schedule Variance (SV) is calculated as EV minus PV in Earned Value Management.

    <p>True</p> Signup and view all the answers

    A negative Schedule Variance (SV) indicates that the project is ahead of schedule.

    <p>False</p> Signup and view all the answers

    Schedule Performance Index (SPI) is calculated by dividing EV by PV in Earned Value Management.

    <p>True</p> Signup and view all the answers

    An SPI value of 0.75 indicates that the project is progressing faster than planned.

    <p>False</p> Signup and view all the answers

    All performance variables in Earned Value Management, except BAC, are calculated at different points in time as the project progresses.

    <p>True</p> Signup and view all the answers

    Cost variance (CV) is calculated by subtracting the actual cost (AC) from the planned value (PV).

    <p>False</p> Signup and view all the answers

    The total planned value (PV) of a project is equal to the budget at completion (BAC).

    <p>True</p> Signup and view all the answers

    The reserves are included in the cost baseline for projects.

    <p>False</p> Signup and view all the answers

    Schedule variance (SV) and the schedule performance index (SPI) are calculated in terms of cost using actual cost (AC).

    <p>False</p> Signup and view all the answers

    Earned value analysis is primarily based on planned value (PV), earned value (EV), and actual cost (AC).

    <p>True</p> Signup and view all the answers

    The cost baseline is developed during the process of determining the budget for a project.

    <p>False</p> Signup and view all the answers

    In earned value management, the earned value of a project at a certain point indicates the budgeted cost of work performed.

    <p>True</p> Signup and view all the answers

    If the planned value of a project is higher than the earned value, it indicates a favorable cost variance.

    <p>False</p> Signup and view all the answers

    Cost variance is calculated by subtracting the earned value from the actual cost of work performed.

    <p>True</p> Signup and view all the answers

    In variance analysis, any deviation in project parameters from the baseline is considered irrelevant to project performance.

    <p>False</p> Signup and view all the answers

    The earned value is calculated using the formula EV = BAC × (work completed/total work required)

    <p>True</p> Signup and view all the answers

    Actual cost (AC) is the total cost actually incurred until a specific point on the timescale in performing the work for a project.

    <p>True</p> Signup and view all the answers

    Cost variance (CV) is calculated by subtracting the actual cost (AC) from the earned value (EV).

    <p>True</p> Signup and view all the answers

    The expected value of CV is always negative because we expect the earned value to be less than the actual cost.

    <p>False</p> Signup and view all the answers

    A positive cost variance indicates better cost performance than expected, while a negative cost variance indicates worse cost performance than expected.

    <p>True</p> Signup and view all the answers

    The Estimate to Complete (ETC) is calculated as the Budget at Completion (BAC) minus Earned Value (EV).

    <p>True</p> Signup and view all the answers

    Cost Performance Index (CPI) is calculated by dividing Earned Value (EV) by Actual Cost (AC).

    <p>True</p> Signup and view all the answers

    Schedule Variance (SV) is calculated as the difference between Earned Value (EV) and Planned Value (PV).

    <p>True</p> Signup and view all the answers

    Planned Value (PV) is calculated as Budget at Completion (BAC) times Time Passed divided by Total Schedule Time.

    <p>False</p> Signup and view all the answers

    The Cost Variance (CV) is calculated as the Actual Cost (AC) minus Earned Value (EV).

    <p>False</p> Signup and view all the answers

    The Budget at Completion (BAC) represents the total budget authorized for performing the project work.

    <p>True</p> Signup and view all the answers

    Earned Value (EV) indicates the value of the actually performed work in terms of the approved budget for a project or project activity.

    <p>True</p> Signup and view all the answers

    The Budget at Completion (BAC) is also known as the Actual Cost (AC).

    <p>False</p> Signup and view all the answers

    Variance analysis primarily focuses on assessing deviations in project parameters such as quality and risk.

    <p>False</p> Signup and view all the answers

    The Performance Measurement Baseline (PMB) includes variables such as BAC, EV, and AC.

    <p>False</p> Signup and view all the answers

    Planned Value (PV) represents the total cost of the project work originally estimated in the project management plan.

    <p>True</p> Signup and view all the answers

    Budget at Completion (BAC) is calculated differently depending on whether it is for the whole project or just a part of it.

    <p>False</p> Signup and view all the answers

    Earned Value (EV) is equivalent to the Budgeted Cost for Work Scheduled (BCWS).

    <p>False</p> Signup and view all the answers

    Cost Performance Analysis focuses on how effectively money is being spent on the project work compared to set expectations.

    <p>True</p> Signup and view all the answers

    The Schedule Performance Index (SPI) is calculated by dividing Earned Value (EV) by Actual Cost (AC).

    <p>False</p> Signup and view all the answers

    Study Notes

    • Schedule refers to performing work over a specific time period, while cost relates to the money spent for the work on a project during a certain timeframe.
    • The relationship between cost and schedule is evident in the understanding that money is required to carry out scheduled activities.
    • Planned value (PV), earned value (EV), and actual cost (AC) are fundamental parameters in Earned Value Management (EVM) that need close monitoring and development.
    • Scope, schedule, and cost are interlinked in the triple constraint of project management, where changing one aspect affects the others.
    • Schedule Variance (SV) is calculated as the difference between EV and PV, indicating if the project is ahead or behind schedule.
    • Schedule Performance Index (SPI) measures the efficiency of the project schedule by comparing EV to PV, showing how the project is progressing compared to the planned pace.
    • Contingency reserves are used to manage uncertainties in schedule duration and cost, and for addressing project objective overruns to meet stakeholder expectations.

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