MAN 4583 EXAM 1 QUESTIONS AND VERIFIED
ANSWERS
What is a project? - Answers - Temporary endeavor: beginning and end
Creates a unique product
Not a continuous operation!
What is a project manager? - Answers - Assigned to achieve project objectives
Leads project team
Organizes project resources
Can manage project at varying levels of complexity
Can manage projects in different industries
What are stakeholders? - Answers - persons or organizations
actively involved in the project
have interests that may be positively or negatively affected
may influence the project and its deliverables
What is a sponsor? - Answers - Person or group
Provides financial resources
High interest in project success
Could be internal or external
What are team members? - Answers - Persons
Report to project manager
Perform the work
Must be assigned specific and clear roles and responsibilities based on their skills and
qualifications
Must be rewarded and recognized!
What is a project? - Answers - A non-routine, one-time effort limited by time, budget,
resources, and performance specifications designed to meet customer needs.
What are the major characteristics of a project? - Answers - established objective >
scope, deliverables
defined life span > duration
across-the-organizational participation > human resources
never been done before > unique, non-routine
specific time, cost, and performance requirements > constraints
How do you keep track of projects? - Answers - Programs
Portfolios
,What does the project management office (PMO) provide? - Answers - overview of all
project management activities
big picture of how organizational resources are used
tracking of risks and performance metrics
What are some problems that result from the uncoordinated PM systems? - Answers -
Projects that do not support the organization's strategic plan
Independent managerial decisions that create imbalances, conflicts, and confusion
Failure to prioritize projects results in waste of resources
What is the product life cycle? - Answers - Introduction, growth, mature, decline
What is the project life cycle? - Answers - Example: Research > Design > Code > Test
> Release
What is the project management process? - Answers - Initiation > Planning > Executing
> Monitoring and Controlling > Closing
What are the three project constraints? - Answers - Time, Cost, Performance
What are the different knowledge areas? - Answers - Integration, scope, time, cost,
quality, human resources, communications, risk, procurement, stakeholders
What do internal projects do? - Answers - Internal projects help companies implement
internal initiatives that serve their strategy and don't directly make money
What do external projects do? - Answers - External projects serve clients and should be
treated as profit centers
What are the functions of portfolio management? - Answers - Oversee project selection.
Monitor aggregate resource levels and skills.
Encourage use of best practices.
Balance projects in the portfolio in order to represent a risk level appropriate to the
organization.
Improve communication among all stakeholders.
Create a total organization perspective that goes beyond silo thinking.
Improve overall management of projects over time.
Why do project managers need to understand strategy? - Answers - Because those
who don't:
Focus on low-priority or immediate problems or solutions and miss big picture
Waste resources on things no one else cares about
What can a project priority system help you avoid? - Answers - The implementation gap
(by clarifying communication)
, Organization politics (by using objective project selection and assessment systems)
Conflicts in shared resources (by allocating resources based on project priority)
What is involved in the portfolio management system? - Answers - Project Classification
Selection Criteria
Sourcing/Solicitation of proposals
Evaluating proposals
Managing the portfolio of projects
What is involved with project classification? - Answers - Compliance (must do) projects
Strategic projects
Operational projects
What can the selection criteria be based off of? - Answers - Financial criteria (payback,
NPV, IRR)
Non-financial criteria (projects of strategic importance to the firm)
Multi-weighted scoring models
What is the net present value (NPV) model? - Answers - Uses management's minimum
desired rate-of-return (discount rate) to compute the present value of all net cash
inflows.
+ NPV: project is eligible for further consideration
- NPV: reject
What is the internal rate of return (IRR) model? - Answers - The discount rate at which a
project's NET cash flows equal 0
The higher, the better
Remember: the discount rate here is the rate of return management expects to receive
from a given project
What is the payback period model? - Answers - The time the project cash flows will take
to recover
the project investment
The shorter, the better
What are the nonfinancial criteria? - Answers - To capture larger market share
To make it difficult for competitors to enter the market
To develop an enabler product, which by its introduction will increase sales in more
profitable products
To develop core technology that will be used in next-generation products
To reduce dependency on unreliable suppliers
To prevent government intervention and regulation
To restore corporate image or enhance brand recognition
To demonstrate its commitment to corporate citizenship and support for community
development.
ANSWERS
What is a project? - Answers - Temporary endeavor: beginning and end
Creates a unique product
Not a continuous operation!
What is a project manager? - Answers - Assigned to achieve project objectives
Leads project team
Organizes project resources
Can manage project at varying levels of complexity
Can manage projects in different industries
What are stakeholders? - Answers - persons or organizations
actively involved in the project
have interests that may be positively or negatively affected
may influence the project and its deliverables
What is a sponsor? - Answers - Person or group
Provides financial resources
High interest in project success
Could be internal or external
What are team members? - Answers - Persons
Report to project manager
Perform the work
Must be assigned specific and clear roles and responsibilities based on their skills and
qualifications
Must be rewarded and recognized!
What is a project? - Answers - A non-routine, one-time effort limited by time, budget,
resources, and performance specifications designed to meet customer needs.
What are the major characteristics of a project? - Answers - established objective >
scope, deliverables
defined life span > duration
across-the-organizational participation > human resources
never been done before > unique, non-routine
specific time, cost, and performance requirements > constraints
How do you keep track of projects? - Answers - Programs
Portfolios
,What does the project management office (PMO) provide? - Answers - overview of all
project management activities
big picture of how organizational resources are used
tracking of risks and performance metrics
What are some problems that result from the uncoordinated PM systems? - Answers -
Projects that do not support the organization's strategic plan
Independent managerial decisions that create imbalances, conflicts, and confusion
Failure to prioritize projects results in waste of resources
What is the product life cycle? - Answers - Introduction, growth, mature, decline
What is the project life cycle? - Answers - Example: Research > Design > Code > Test
> Release
What is the project management process? - Answers - Initiation > Planning > Executing
> Monitoring and Controlling > Closing
What are the three project constraints? - Answers - Time, Cost, Performance
What are the different knowledge areas? - Answers - Integration, scope, time, cost,
quality, human resources, communications, risk, procurement, stakeholders
What do internal projects do? - Answers - Internal projects help companies implement
internal initiatives that serve their strategy and don't directly make money
What do external projects do? - Answers - External projects serve clients and should be
treated as profit centers
What are the functions of portfolio management? - Answers - Oversee project selection.
Monitor aggregate resource levels and skills.
Encourage use of best practices.
Balance projects in the portfolio in order to represent a risk level appropriate to the
organization.
Improve communication among all stakeholders.
Create a total organization perspective that goes beyond silo thinking.
Improve overall management of projects over time.
Why do project managers need to understand strategy? - Answers - Because those
who don't:
Focus on low-priority or immediate problems or solutions and miss big picture
Waste resources on things no one else cares about
What can a project priority system help you avoid? - Answers - The implementation gap
(by clarifying communication)
, Organization politics (by using objective project selection and assessment systems)
Conflicts in shared resources (by allocating resources based on project priority)
What is involved in the portfolio management system? - Answers - Project Classification
Selection Criteria
Sourcing/Solicitation of proposals
Evaluating proposals
Managing the portfolio of projects
What is involved with project classification? - Answers - Compliance (must do) projects
Strategic projects
Operational projects
What can the selection criteria be based off of? - Answers - Financial criteria (payback,
NPV, IRR)
Non-financial criteria (projects of strategic importance to the firm)
Multi-weighted scoring models
What is the net present value (NPV) model? - Answers - Uses management's minimum
desired rate-of-return (discount rate) to compute the present value of all net cash
inflows.
+ NPV: project is eligible for further consideration
- NPV: reject
What is the internal rate of return (IRR) model? - Answers - The discount rate at which a
project's NET cash flows equal 0
The higher, the better
Remember: the discount rate here is the rate of return management expects to receive
from a given project
What is the payback period model? - Answers - The time the project cash flows will take
to recover
the project investment
The shorter, the better
What are the nonfinancial criteria? - Answers - To capture larger market share
To make it difficult for competitors to enter the market
To develop an enabler product, which by its introduction will increase sales in more
profitable products
To develop core technology that will be used in next-generation products
To reduce dependency on unreliable suppliers
To prevent government intervention and regulation
To restore corporate image or enhance brand recognition
To demonstrate its commitment to corporate citizenship and support for community
development.
