QUESTION: 65

A project manager should document the escalation path for unresolved project risks in the:

Change control plan
Stakeholder register
Risk log
Communications management plan

Answer(s): D

Explanation:

10.1.3.1 Communications Management Plan
The communications management plan is a component of the project management plan that describes how project communications will be planned, structured, monitored, and controlled. The plan contains the following information:
Stakeholder communication requirements;
Information to be communicated, including language, format, content, and level of detail; Reason for the distribution of that information;
Time frame and frequency for the distribution of required information and receipt of acknowledgment or response, if applicable;
Person responsible for communicating the information;
Person responsible for authorizing release of confidential information; Person or groups who will receive the information;
Methods or technologies used to convey the information, such as memos, e-mail, and/or press releases; Resources allocated for communication activities, including time and budget;
Escalation process identifying time frames and the management chain (names) for escalation of issues that cannot be resolved at a lower staff level;
Method for updating and refining the communications management plan as the project progresses and develops;
Glossary of common terminology;
Flow charts of the information ﬂow in the project, workﬂows with possible sequence of authorization, list of reports, and meeting plans, etc.; and
Communication constraints usually derived from a specific legislation or regulation, technology, and organizational policies, etc.

The communications management plan can also include guidelines and templates for project status meetings, project team meetings, e-meetings, and e-mail messages. The use of a project website and project management software can also be included if these are to be used in the project

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QUESTION: 66

Which process in Project Time Management includes reserve analysis as a tool or technique?

Estimate Activity Resources
Sequence Activities
Estimate Activity Durations
Develop Schedule

Answer(s): C

Explanation:

Process: 6.5 Estimate Activity Durations
Definition: The process of estimating the number of work periods needed to complete individual activities with estimated resources.
Key Benefit: The key benefit of this process is that it provides the amount of time each activity will take to complete, which is a major input into the Develop Schedule process.

Inputs
1. Schedule management plan
2. Activity list
3. Activity attributes
4. Activity resource requirements
5. Resource calendars

6. Project scope statement
7. Risk register
8. Resource breakdown structure
9. Enterprise environmental factors
10. Organizational process assets

Tools & Techniques
1. Expert judgment
2. Analogous estimating
3. Parametric estimating
4. Three-point estimating
5. Group decision-making techniques
6. Reserve analysis

Outputs
1. Activity duration estimates
2. Project documents updates

6.5.2.6 Reserve Analysis
Duration estimates may include contingency reserves, sometimes referred to as time reserves or buffers, into the project schedule to account for schedule uncertainty. Contingency reserves are the estimated duration within the schedule baseline, which is allocated for identified risks that are accepted and for which contingent or mitigation responses are developed. Contingency reserves are associated with the “known-unknowns,” which may be estimated to account for this unknown amount of rework.
As more precise information about the project becomes available, the contingency reserve may be used, reduced, or eliminated. Contingency should be clearly identified in schedule documentation.
[..]
Estimates may also be produced for the amount of management reserve of time for the project. Management reserves are a specified amount of the project duration withheld for management control purposes and are reserved for unforeseen work that is within scope of the project. Management reserves are intended to address the “unknown-unknowns” that can affect a project. Management reserve is not included in the schedule baseline, but it is part of the overall project duration requirements. Depending on contract terms, use of management reserves may require a change to the schedule baseline.

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QUESTION: 67

Which risk management strategy seeks to eliminate the uncertainty associated with a particular upside risk by ensuring that the opportunity is realized?

Enhance
Share
Exploit
Accept

Answer(s): C

Explanation:

11.5.2.2 Strategies for Positive Risks or Opportunities
Three of the four responses are suggested to deal with risks with potentially positive impacts on project objectives.
The fourth strategy, accept, can be used for negative risks or threats as well as positive risks or opportunities. These strategies, described below, are to exploit, share, enhance, and accept.
Exploit. The exploit strategy may be selected for risks with positive impacts where the organization wishes to ensure that the opportunity is realized. This strategy seeks to eliminate the uncertainty associated with a particular upside risk by ensuring the opportunity definitely happens. Examples of directly exploiting responses include assigning an organization’s most talented resources to the project to reduce the time to completion or using new technologies or technology upgrades to reduce cost and duration required to realize project objectives.
Enhance. The enhance strategy is used to increase the probability and/or the positive impacts of an opportunity. Identifying and maximizing key drivers of these positive-impact risks may increase the probability of their occurrence. Examples of enhancing opportunities include adding more resources to an activity to finish early.
Share. Sharing a positive risk involves allocating some or all of the ownership of the opportunity to a third party who is best able to capture the opportunity for the benefit of the project. Examples of sharing actions include forming risk-sharing partnerships, teams, special-purpose companies, or joint ventures, which can be established with the express purpose of taking advantage of the opportunity so that all parties gain from their actions.
Accept. Accepting an opportunity is being willing to take advantage of the opportunity if it arises, but not actively pursuing it.

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QUESTION: 68

Payback period, return on investment, internal rate of return, discounted cash flow, and net present value are all examples of:

Expert judgment.
Analytical techniques.
Earned value management.
Group decision-making techniques.

Answer(s): B

Explanation:

7.1.2.2 Analytical Techniques
Developing the cost management plan may involve choosing strategic options to fund the project such as: self-funding, funding with equity, or funding with debt. The cost management plan may also detail ways to finance project resources such as making, purchasing, renting, or leasing. These decisions, like other financial decisions affecting the project, may affect project schedule and/or risks.
Organizational policies and procedures may influence which financial techniques are employed in these decisions. Techniques may include (but are not limited to): payback period, return on investment, internal rate of return, discounted cash flow, and net present value.

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