Quiz 6 - Project Management

A project manager must have some work done by an external supplier. This work has a great deal of risk associated with it, and it has become very difficult to find a contractor willing to take on the job. Which of the following types of contract would offer the greatest incentive to the supplier?

• Firm fixed price
• Cost plus fixed fee
• Cost plus percentage of cost as an award fee
• Time & Materials

Purchasing insurance is considered an example of risk:

• mitigation
• transfer
• acceptance
• avoidance

A cost performance index CPI of 0.89 means:

• at this time, we expect the total project to cost 89 percent MORE than planned.
• when the project is completed we will have spent 89 percent MORE than planned.
• the project is only progressing at 89 percent of that planned.
• the project is only getting 89 cents out of every dollar invested.

Your program manager has come to you, the project manager, for help with a bid for her newest project for a new customer. You want to protect your company from financial risk. You have limited scope definition and don't want to disclose your cost structure to your customer. What is the BEST type of contract to choose?

• Fixed price (FP)
• Cost plus percent of cost (CPPC)
• Time and material (T&M)
• Cost plus fixed fee (CPFF)

A schedule performance index SPI of 0.76 means:

• you are over budget
• you are ahead of schedule.
• you are only progressing at 76 percent of the rate originally planned.
• you are only progressing at 24 percent of the rate originally planned.

What type of contract do you not want to use if you do not have enough labor to audit invoices?

• Cost plus fixed fee (CPFF)
• Time & material (T&M)
• Fixed price (FP)
• Fixed price incentive fee (FPIF)

Answer explanation

CPFF would involve auditing invoices presented by the vendor to account for the costs incurred.

Which of the following is NOT an advantage of a fixed price contract?

• Less work for buyer to manage
• Seller has a strong incentive to control costs
• Buyer knows the total price at project starts
• Final cost may be more than a cost reimbursable contract because contractors have to increase the price to cover their risk

Project performance reviews using earned value management would typically incorporate information from all the following EXCEPT?

• Variance Analysis
• Cost Benefit Analysis
• Trend Analysis
• Earned Value Analysis

A project manager wants to measure project performance against the project baseline. Which of the following techniques would be MOST helpful?

• Variance Analysis
• Earned Value Analysis
• Work Performance Information
• Reserve Analysis

A project manager is in the process of predicting future performance based on the performance to date. Which activity is he performing?

• Variance Analysis
• Trend Analysis
• Design of Experiments
• Benchmarking