Project Selection Methods Overview
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Questions and Answers

What is a portfolio in the context of project management?

  • A sum of all projects managed systematically through portfolio management. (correct)
  • A collection of all completed projects in an organization.
  • A single project that has high financial returns.
  • A temporary collection of projects under one manager.

    • Why is it essential for project organizations to prioritize projects?

  • To manage risks and maximize the value delivered to the company. (correct)
  • To complete more projects in less time.
  • To adhere to government regulations.
  • To simplify resource allocation for individual projects.

    • What can happen if an organization starts more projects than its capacities allow?

  • It will increase human resource satisfaction.
  • It can lead to a simpler project management process.
  • It will ensure higher financial returns.
  • It can jeopardize the survival of the project organization. (correct)

    • Which component is crucial for the sustained success of a project organization?

    <p>Effective controlling and reporting on individual projects.</p> Signup and view all the answers

    What does project and portfolio management need to do in order to be effective?

    <p>Work together to ensure alignment and success.</p> Signup and view all the answers

    What are the consequences of inadequate project resource estimation?

    <p>Challenges in managing project scope and timelines.</p> Signup and view all the answers

    What does successful implementation of project management require from organizations?

    <p>Knowledge and application of portfolio management.</p> Signup and view all the answers

    How can project organizations improve their profit opportunities?

    <p>By implementing as many projects as possible simultaneously.</p> Signup and view all the answers

    What is the key focus of numeric project selection methods?

    <p>Assessing financial benefits from projects</p> Signup and view all the answers

    When establishing weights for selection criteria, what is the maximum total weight allowed?

    <p>100%</p> Signup and view all the answers

    Which project category represents those that require low effort and yield low impact?

    <p>Fill-ins</p> Signup and view all the answers

    What does the Cost-Benefit Ratio formula primarily assess?

    <p>Financial efficiency of projects</p> Signup and view all the answers

    What does Cost-Value Optimization aim to achieve?

    <p>Delivering highest value with the same budget level</p> Signup and view all the answers

    Which of the following factors is NOT considered a selection criterion in project evaluation?

    <p>Team dynamics</p> Signup and view all the answers

    What is the function of resource optimization in project portfolios?

    <p>To ensure balanced utilization of human resources</p> Signup and view all the answers

    Which project is given the first priority during execution based on the weighted grading system described?

    <p>Project B with a grade of 3.3</p> Signup and view all the answers

    What does the Analytical Hierarchy Process combine?

    <p>Both numeric and non-numeric methods</p> Signup and view all the answers

    Which of the following project categories provides the greatest benefits but also involves more challenges?

    <p>Major projects</p> Signup and view all the answers

    In establishing a grading scheme, what does a level 1 grade typically indicate?

    <p>Worst situation for the project organization</p> Signup and view all the answers

    What defines a project in the context of management?

    <p>A collection of interrelated tasks with specific timelines</p> Signup and view all the answers

    What is the role of portfolio management in an organization?

    <p>Grouping projects to achieve strategic objectives</p> Signup and view all the answers

    How are 'quick wins' characterized in project management?

    <p>Needing low effort with high impact</p> Signup and view all the answers

    Which aspect does Supply and Demand optimization primarily focus on?

    <p>Aligning resource availability with project needs</p> Signup and view all the answers

    Which of the following should be a criterion for selecting projects in portfolio management?

    <p>Alignment with the organization's strategic objectives</p> Signup and view all the answers

    What is the primary purpose of portfolio optimization in project management?

    <p>To manage multiple projects under constraints</p> Signup and view all the answers

    What is an example of operations in project management?

    <p>Training users on a newly delivered system</p> Signup and view all the answers

    Which of the following best describes a program in project management?

    <p>Specific projects grouped around common objectives</p> Signup and view all the answers

    During project selection, what is crucial to assess regarding the project’s value?

    <p>The strategic impact it delivers</p> Signup and view all the answers

    How should projects be prioritized according to the principles of project management?

    <p>Using different methods based on specific criteria</p> Signup and view all the answers

    Why might a project organization need to prioritize project proposals?

    <p>Due to capacity constraints in implementing all proposals</p> Signup and view all the answers

    Which of the following is NOT a function of project portfolio management?

    <p>Conducting daily operational tasks</p> Signup and view all the answers

    What differentiates a portfolio from a project?

    <p>Portfolios are broader in scope, grouping multiple projects</p> Signup and view all the answers

    Which factor is considered a constraint during the project selection process?

    <p>Availability of resources</p> Signup and view all the answers

    What is the primary objective of a software development program in project management?

    <p>To group specific projects by development area</p> Signup and view all the answers

    Which of these describes why external projects differ in their objectives compared to internal projects?

    <p>Internal projects usually aim for internal improvements</p> Signup and view all the answers

    What should happen to projects that do not meet the predetermined threshold value in the selection process?

    <p>They should not be considered for implementation</p> Signup and view all the answers

    What does a Cost Variance (CV) of zero indicate?

    <p>The project is on budget.</p> Signup and view all the answers

    Which equation is used to calculate the Schedule Performance Index (SPI)?

    <p>SPI = Earned Value ÷ Planned Value</p> Signup and view all the answers

    If the Schedule Variance (SV) is negative, what does this signify?

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

    What is the purpose of calculating Estimate at Completion (EAC)?

    <p>To assess whether the project will stay within the initial budget.</p> Signup and view all the answers

    How are the Cost Performance Index (CPI) and Cost Variance (CV) related?

    <p>CPI provides a ratio of Earned Value to Actual Costs, while CV is the difference between these two.</p> Signup and view all the answers

    Which of the following would indicate that a project is likely to require more budget than initially planned?

    <p>Estimate at Completion (EAC) is greater than Budget at Completion (BAC).</p> Signup and view all the answers

    What does an Earned Value (EV) greater than Planned Value (PV) indicate?

    <p>More work has been completed than was planned.</p> Signup and view all the answers

    Which of the following components makes up the Budget at Completion (BAC)?

    <p>Total planned value for costs.</p> Signup and view all the answers

    If a project shows a Cost Performance Index (CPI) less than 1, what should be inferred?

    <p>The project is overspending compared to the work completed.</p> Signup and view all the answers

    To calculate the cumulative actual costs (AC) up to a certain point in a project, what should be included?

    <p>All expenses from the project to date.</p> Signup and view all the answers

    What is the primary focus of schedule optimization in project management?

    <p>Managing task dependencies</p> Signup and view all the answers

    Which estimation technique involves reaching a consensus among several experts?

    <p>Delphi technique</p> Signup and view all the answers

    What is considered the largest cost component in IT projects?

    <p>Human resources costs</p> Signup and view all the answers

    Which of the following techniques uses historical data from previous projects for estimation?

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

    In the Three-Point Estimating technique, what two distributions can be used for cost estimation?

    <p>Triangular and Beta</p> Signup and view all the answers

    Why is cost estimation for IT projects challenging?

    <p>Projects are usually based on the agile approach with many unknowns.</p> Signup and view all the answers

    Which method is typically used to measure the size of software in IT projects?

    <p>Lines of Code (LoC)</p> Signup and view all the answers

    What does project creep refer to in project management?

    <p>The deviation of the project from the original plan</p> Signup and view all the answers

    What is a fundamental input needed to estimate software development costs?

    <p>Hourly rate of programming</p> Signup and view all the answers

    In effort estimation, which of the following techniques is considered moderated expert judgment?

    <p>Delphi technique</p> Signup and view all the answers

    Which of the following is NOT a step in the estimation process for IT projects?

    <p>Establishing a project team</p> Signup and view all the answers

    What does the term 'effort' typically refer to in the context of IT project management?

    <p>Man-hours or man-days required for tasks</p> Signup and view all the answers

    Which of the following best describes 'parametric estimating'?

    <p>Estimates based on specific algorithms for similar characteristics</p> Signup and view all the answers

    What aspect is crucial for accurate effort estimation in software development?

    <p>Understanding programmer productivity levels</p> Signup and view all the answers

    What is the primary characteristic of scope creep?

    <p>It includes changes that are uncontrolled and unexpected.</p> Signup and view all the answers

    What is the purpose of establishing Key Performance Indicators (KPIs) in project management?

    <p>To evaluate the success of a project with quantifiable measures.</p> Signup and view all the answers

    Which of the following best describes feature creep, also known as Gold Plating?

    <p>Adding features without customer approval, believing it will add value.</p> Signup and view all the answers

    What is the role of scope validation in project management?

    <p>To validate changes through formal acceptance by the customer.</p> Signup and view all the answers

    What does a Gantt chart typically represent in project management?

    <p>The planned schedule and progress of specific tasks.</p> Signup and view all the answers

    What information does Earned Value Management (EVM) primarily help to monitor?

    <p>Scope, schedule, and costs of the project.</p> Signup and view all the answers

    What does the term 'Actual Costs (AC)' refer to in project management?

    <p>The costs incurred for the work that has been completed.</p> Signup and view all the answers

    How are Key Performance Indicators (KPIs) ideally formulated?

    <p>SMART: Specific, Meaningful, Achievable, Relevant, Timely.</p> Signup and view all the answers

    What kind of tool is a project dashboard considered to be?

    <p>An informative visual for tracking project performance indicators.</p> Signup and view all the answers

    What is the significance of milestones in a project schedule?

    <p>They indicate points in the project where progress is evaluated.</p> Signup and view all the answers

    Which of the following reflects the scope baseline in Earned Value Management?

    <p>The total amount of work defined through the Work Breakdown Structure.</p> Signup and view all the answers

    What does a project manager typically assess for controlling project progress?

    <p>Deviations from planned and actual performances.</p> Signup and view all the answers

    In which scenario is scope creep more likely to occur?

    <p>When the project team is unaware of changes and lacks agreements.</p> Signup and view all the answers

    Study Notes

    Unit Overview

    • Key goals include using tools for IT project selection, estimating resources and effort, developing project budgets, and applying controlling tools.

    Portfolio Management

    • A portfolio encompasses all projects managed systematically within an organization.
    • Portfolio management aids in maximizing profit potential while mitigating risks associated with multiple simultaneous projects.
    • Successful project organizations must align project selection and prioritization with company value.

    Prioritization in Project Management

    • Project and portfolio management are interconnected; portfolio management oversees a collection of projects to achieve strategic objectives.
    • Projects must be selected based on their strategic alignment and potential value, informed by rigorous evaluation techniques.
    • Selection methods include both numeric (like NPV, IRR) and non-numeric methods (like Qsort Method).

    Project Definition

    • Portfolio: All ongoing projects in a company.
    • Program: Grouped projects focused on a specific criteria or objective.
    • Project: A set of interrelated tasks with defined start and end dates aimed at delivering a unique product/service.
    • Operations: Routine tasks supporting the organization's strategic goals.

    Strategic Alignment

    • Projects should support organizational strategies, such as market expansion, regulatory compliance, improved profitability, and enhanced customer satisfaction.
    • The selection process involves aligning projects with strategic objectives and assessing their potential impact.

    Project Selection Criteria

    • Essential criteria for project selection include profitability, risk level, technical complexity, execution duration, and resource requirements.
    • Criteria are often weighted according to their importance to the organization, with specific grading schemes used to assess project suitability.

    Cost-Benefit Analysis

    • Cost-benefit ratio is crucial for prioritizing projects, where higher ratios indicate superior project rankings.
    • Projects are typically categorized based on their effort and impact using an action priority matrix, optimizing resource allocation.

    Portfolio Optimization

    • Portfolio optimization enhances the effectiveness of project execution while considering constraints (financial, human, material).
    • Key optimization types include:
      • Cost-Value Optimization: Maximizing project value within a budget.
      • Work Type Optimization: Defining investment ranges for projects.
      • Resource Optimization: Ensuring balanced resource utilization.
      • Supply and Demand Optimization: Timing resource availability accurately.
      • Schedule Optimization: Managing task dependencies for efficiency.

    Effort Estimation Techniques

    • Estimation is essential for budgeting and resource planning, particularly in IT projects where human resources drive the majority of costs.
    • Common methods include:
      • Expert Judgment: Utilizes insights from subject matter experts.
      • Analogous Estimating: Relies on historical data from similar past projects.
      • Parametric Estimating: Uses algorithms for projects with similar characteristics.
      • Three-Point Estimating: Accounts for optimism, pessimism, and likely scenarios to derive estimates.

    Cost Estimation Process

    • Cost estimation for IT projects can be complex due to uncertainty and evolving project specifications.
    • Common costs include hardware, training, and human resources, calculated in man-hours or man-days.
    • Effective estimation relies on breakdown structures, project scope, and programming productivity levels.

    Project Controlling

    • Project creep refers to deviations from the initial project plan, with scope creep being the most prevalent form.
    • Effective project controlling includes monitoring project alignment with the original plan and adjusting as necessary.### Scope Creep and Feature Creep
    • Scope creep refers to uncontrolled changes in project requirements that exceed initial project boundaries.
    • It is frequently cited as a major cause of software project failure.
    • Occurs when project management or clients are unaware of changes, lack agreements, or do not review change impacts.
    • Feature creep, or Gold Plating, involves adding features without prior customer agreement, potentially leading to customer dissatisfaction.

    Project Control Processes

    • Essential for a project manager to implement controlling procedures.
    • Scope Control: Continuous assessment of actual vs. planned performance.
    • Scope Validation: Inspection conducted by customer for formal project acceptance.
    • Agile projects conduct regular scope validation.

    Project Management Areas and Tools

    • Control areas include schedule, costs, quality, risks, and procurements.
    • Effective project management relies on a solid management plan established during the planning stage.

    Key Performance Indicators (KPIs)

    • KPIs are quantifiable measures that help evaluate project success.
    • Must be defined using SMART criteria: Specific, Measurable, Achievable, Relevant, Timely.
    • Important for measuring outcomes post-project and ensuring alignment between project organization and customer expectations.

    Milestones and Dashboards

    • Milestones are critical checkpoints in project schedules indicating completion of tasks or events.
    • Dashboards provide visual progress updates on multiple KPIs using graphs for easy tracking.

    Gantt Charts and Earned Value Management

    • Gantt Charts visually represent task schedules and progress, showing deviations at a glance.
    • Earned Value Management (EVM) integrates scope, schedule, and cost to monitor project progress.
      • Planned Values (PV): Work defined in hours or days to complete tasks.
      • Schedule Baseline: Predicted task completion timelines.
      • Cost Baseline: Time-phased budget showing estimated spending.

    EVM Metrics and Interpretation

    • Earned Value (EV): Measures completed project work against the scope baseline.
    • Actual Costs (AC): Represents the actual expenditure on the project.
    • Variances provide insights into project status:
      • Cost Variance (CV) = EV - AC indicates budget performance.
      • Schedule Variance (SV) = EV - PV indicates timeline adherence.
    • Performance Indices assess overall project health:
      • Cost Performance Index (CPI) = EV ÷ AC.
      • Schedule Performance Index (SPI) = EV ÷ PV.

    Estimate at Completion (EAC)

    • EAC forecasts total project costs considering current deviations.
    • Calculated as EAC = BAC ÷ CPI where BAC is Budget at Completion.
    • EAC helps anticipate budget needs and identifies financial adjustments early.

    Portfolio Management

    • Managing multiple projects can be challenging; effective portfolio management is crucial.
    • Focus on selecting and optimizing projects to benefit the organization and ensure smooth operation.
    • Estimation techniques are critical, especially in IT projects due to their complexity.
    • Proper controlling processes and tools are vital for achieving project goals and customer satisfaction.

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    Description

    This quiz covers various project selection methods, detailing both financial approaches such as Internal Rate of Return and Net Present Value, as well as non-numeric techniques like the Qsort Method. It emphasizes the categorization proposed by Farahbod & Varzandeh (2021), highlighting the importance of optimizing project portfolios. Test your understanding of these essential concepts in project management.

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