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Chapter 18—Project Management
Multiple Choice
1. Which of the following is NOT considered a project?
a.
Writing and implementing a computer program
b.
Introducing a new product
c.
Production of soft drinks
d.
Building a bridge
2. Which of the following is NOT a stage in the project life cycle?
a.
Define
b.
Organize
c.
Improve
d.
Close
3. In which stage of the project life cycle would a project schedule be developed?
a.
Define
b.
Plan
c.
Organize
d.
Control
4. Which one of the following is NOT a major project management decision area?
a.
Revenue
b.
Cost
c.
Time
d.
Resources
5. Which one of the following skills contributes to project success?
a.
Lack of data accuracy and integrity
b.
Clear communication channels
c.
Ill-defined project objectives
d.
Inability to resolve conflicts
Project Management Problem A for Questions #6 to #8
Consider the following project network. Time estimates are in weeks.
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Complete the following table and questions 6, 7, and 8:
Activity
Duration
ES
EF
Slack
On
CP?
A
2
0
2
0
yes
B
4
2
6
0
yes
C
5
6
11
0
yes
D
4
11
15
0
yes
E
6
2
8
7
no
F
7
15
22
0
yes
6. Slack for activity E is:
a. less than 4.
b. between 4 and 6.
c. between 6 and 8.
d. greater than 8.
7. In the previous project network, the critical path activities are:
a. A,B, and C.
b. A,B,C,D, and F.
c. A,B,D, and F.
d. B,C,D, and F.
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8. In the previous project network, the latest finish for activity B is:
a. 5.
b. 6.
c. 7.
d. 8.
Project Management Problem B for Questions #9 to #12
Jude is in charge of the advertising program for the Boston Red Sox baseball team during their
spring training in Fort Myers, Florida. He has defined the advertising program as a project with
the following characteristics. The goal is to fill all stadium seats during the spring training
season or he may not have this job next year—the pressure is on!
Activity
Immediate
Predecessor(s)
Activity Time
in weeks
A
None
1
B
None
1
C
A
4
D
B
5
E
C, D
5
F
E
3
G
F
2
9. The earliest completion time for this project is:
a. 12 weeks.
b. 13 weeks.
c. 14 weeks.
d. 16 weeks.
10. The largest amount of slack that any activity has in this project is:
a. 1 week.
b. 2 weeks.
c. 3 weeks.
d. 4 weeks.
11. If activity C is delayed by 2 weeks, then the revised earliest project completion time is:
a. 13 weeks.
b. 14 weeks.
c. 15 weeks.
d. 17 weeks.
12. The most likely activities to share resources with critical path activities are:
a. Activities A and B.
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b. Activities E and A.
c. Activities A and C.
d. Activities B and D.
13. The county government has decided to redo the street and plans to block the street off
which causes considerable inconvenience to people. The project has three parallel paths defined
as follows: (i) path A-B-C-H to install street lights and electrical wiring that takes 16 days, (ii)
path A-D-E-H to install sidewalks with handicap capabilities that takes 22 days, and (iii) path
A-F-G-H to repave the street including storm drains that takes 30 days. Which one of the
following statements is TRUE?
a.
The expected duration of the project is 30 + 22 + 16 = 68 days.
b.
Path A-B-C-H is the critical path.
c.
Path A-D-E-H has the largest slack time.
d.
Path A-F-G-H is the critical path.
14. The Baker county government has decided to redo the street and plans to block the street off
which causes considerable inconvenience to people. The critical path method (CPM) project
has three sequential (in series, that is “i” is first, then “ii” and finally “iii.”) paths defined as
follows: (i) path A-B-C-H to install street lights and electrical wiring that takes 10 days, (ii)
path G-J-K-L to install sidewalks with handicap capabilities that takes 20 days, and (iii) path U-
V-Z-W to repave the street including storm drains that takes 8 days. Which one of the
following statements is true?
a.
The expected duration of the project is 10 + 20 + 8 = 38 days.
b.
The expected duration of the project is 20 days.
c.
The normal time is inversely related to the crash time.
d.
The three sub-system precedent relationships are in parallel.
15. The critical path method (CPM) work breakdown structure consists of all of the following
EXCEPT:
a. the number and definition of each project activity.
b. the normal time to complete each activity.
c. the immediate predecessors (i.e., the precedent relationships).
d. the probabilities of completing each activity.
16. A project has three parallel paths. A-B-C has a length of 25 days. A-D-C has a length of 15
days. Finally, A-E-C has a length of 20 days. Which one of the following statements is TRUE?
a. A-D-C is the critical path.
b. A-B-C has the most slack.
c. The expected duration of this project is 25 days.
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d. The expected duration of this project is 25 + 15 + 20 = 60 days.
17. Slack in an activity is computed as:
a.
ES – LS.
b.
EF – LF.
c.
LS – ES.
d.
LS – EF.
18. A Gantt chart is:
a.
a useful tool for depicting a schedule graphically.
b.
a chart that enables the project manager to know what activities should be performed at a
given time.
c.
a chart that can be used to monitor daily progress of a project so that corrective action can
be taken when necessary.
d.
All of the above
19. _____ is the sequence of activities that takes the longest time and defines the total project
completion time.
a.
Project Evaluation and Review Technique
b.
The critical path
c.
The crash time
d.
Project nodes network
Project Management Problem C for Questions #20 to #23
Shea is in charge of the “advertising program” for the Boston Red Sox baseball team during
their spring training in Fort Myers, Florida. She has defined the advertising program as a
project with the following characteristics. The goal is to fill all stadium seats during the spring
training season or she may not have the same job next year—the pressure is on!
Activity
Immediate
Predecessor(s)
Activity Time
in weeks
A
None
1
B
A
2
C
A
3
D
A, B
4
E
C, D
3
F
D, E
2
20. The earliest completion time for this project is:
a. 9 weeks.
b. 10 weeks.
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c. 11 weeks.
d. 12 weeks.
21. The largest amount of slack that any activity has in this project is:
a. 1 week.
b. 2 weeks.
c. 3 weeks.
d. 4 weeks.
22. If activity C is delayed by three weeks, the revised earliest project completion time is:
a. 9 weeks.
b. 10 weeks.
c. 11 weeks.
d. 12 weeks.
23. For the original critical path method problem, the minimum number of activities that would
have to be crashed in order to reduce the project’s earliest completion time by two weeks
assuming all activity crash costs per week are the same and all activities can be crashed is:
a. one activity.
b. two activities.
c. three activities.
d. four activities.
24. Which of the following is NOT an assumption of the critical path method?
a.
Activities are independent of one another.
b.
Activity time estimates are stable.
c.
Activity times are characterized by a beta probability distribution.
d.
Once an activity is started, it continues uninterrupted until completion.
25. Which is NOT true of the critical path?
a.
The activities on the critical path take the shortest time to complete.
b.
The activities on the critical path define the total project completion time.
c.
It is the project path with zero slack.
d.
The delays in critical path activities will delay the project.
26. Which of the following statements is TRUE of the activities not on the critical path?
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a.
These activities usually cannot be delayed.
b.
These activities have less slack than activities on the critical path.
c.
These activities can become part of the critical path if delayed long enough.
d.
These activities have uncertain times.
27. Which one of the following statements about the critical path method (CPM) is TRUE?
a.
The activity time estimates are accurate and stable.
b.
Activities are dependent on each other.
c.
Activities can be interrupted before completion.
d.
The project schedule defines a correct sequence of work in terms of technology and
workflow.
28. Which of the following is true of project scheduling using the critical path method?
a.
Activity crash time is greater than normal time.
b.
Crash cost per time period is assumed to be non-linear.
c.
Gantt charts are built using activity ES, EF, LS, and LF times.
d.
Gantt charts assume a beta probability distribution.
29. Which one of the following statements about critical path method (CPM) is TRUE?
a.
Crashing an activity refers to increasing its normal time.
b.
Crashing an activity refers to decreasing its normal time possibly up to its limit.
c.
Crashing a project requires revised immediate predecessor relationships.
d.
Crashing a project is a tradeoff between revenue and costs.
Project Management Problem D for Questions #30 to #34
You are responsible for managing a project with the following activities (times are given in
weeks):
Immediate
Normal Time
Crash Time
Normal
Crash
Activity
Predecessor
(Weeks)
(Weeks)
Cost ($)
Cost ($)
A
none
3
2
$14,000
$16,500
B
none
6
6
$5,500
$5,500
C
none
2
1
$6,000
$8,000
D
A
5
3
$7,500
$14,500
E
C
2
1
$9,000
$10,500
F
A
7
6
$15,000
$18,000
G
B, D, E, F
4
3
$8,400
$10,000
30. What is the critical path and expected completion time for this project?
a. B-D-G; 12 weeks
b. A-D-G; 12 weeks
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c. B-G; 10 weeks
d. A-F-G; 14 weeks
31. Which of the following activities has the largest amount of slack?
a. Activity A
b. Activity B
c. Activity C
d. Activity D
32. If activity D is delayed by 2 weeks, which one of the following statements is TRUE?
a. There are now two critical paths in the network.
b. The slack time for activity D changes to 1 week.
c. The project completion time is still 12 weeks.
d. The project completion time becomes 16 weeks.
33. What activity should one crash to reduce the project completion time by two weeks at
minimum crash costs?
a. A and F.
b. A and G.
c. A and E.
d. G and F.
34. What is the total project (normal plus crash) cost?
a.
Less than or equal to $60,000
b.
Greater than $60,000 but less than or equal to $65,000
c.
Greater than $65,000 but less than or equal to $70,000
d.
Greater than $70,000
35. Brian is assigned his first project. If things go well, he should get promoted. The CEO is
aware of this project, so he has a chance for high visibility. His first task is to define the work
break down structure by interviewing project activity managers, and the firm’s friendly, yet
boring accountants, to get “good estimates” of project activity times and costs.
For Activity Z, the crash cost per week is _____, given the following data: normal time = 5
weeks, crash time = 2, normal cost = $7,560, and crash cost = $17,365.
a. less than or equal to $1,000 per week
b. more than $1,000 but less than or equal to $2,500
c. more than $2,500 but less than or equal to $3,000
d. more than $3,000 but less than or equal to $3,500
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Project Management Problem E for Questions #36 to #41
You are responsible for managing an advertising project with the following activities (times are
given in weeks).
Immediate
Normal Time
Crash Time
Normal
Crash
Activity
Predecessor
(Weeks)
(Weeks)
Cost ($)
Cost ($)
A
none
3
2
$14,000
$16,500
B
none
6
6
$5,500
$5,500
C
none
2
1
$6,000
$8,000
D
A, B
5
3
$7,500
$14,500
E
C
2
1
$9,000
$10,500
F
A
7
6
$15,000
$18,000
G
D, E, F
4
3
$8,400
$10,000
Draw the project network here. BLANK SPACES
36. What is the critical path for this project?
a. A-D-G
b. A-F-G
c. B-D-G
d. C-E-G
37. Which of the following activities has the largest amount of slack?
a. Activity A
b. Activity B
c. Activity C
d. Activity D
38. The project completion time is _____.
a. 12 weeks
b. 13 weeks
c. 14 weeks
d. 15 weeks
39. If activity D is delayed by 2 weeks, which one of the following statements is TRUE?
a. There are now two critical paths in the network.
b. The slack time for activity D changes to 1 week.
c. The project completion time is still 14 weeks.
d. The project completion time becomes 18 weeks.
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40. What activity should one crash to reduce the project completion time by two weeks at
minimum crash costs?
a. A and F, each by one week
b. A and D, each by one week
c. C and D, each by one week
d. D and G, each by one week
41. What is the total project (normal plus crash) cost?
a.
Less than or equal to $60,000
b.
Greater than $60,000 but less than or equal to $65,000
c.
Greater than $65,000 but less than or equal to $70,000
d.
Greater than $70,000
42. Which of the following is NOT true of time/cost trade-offs?
a.
The relationship between time and cost is proportional and assumed to be linear.
b.
Some activities cannot be crashed.
c.
Crash time is less than normal time.
d.
Crashing priority is based on the amount of uncertainty in activity times.
Project Management Problem F for Questions #43 to #49
Rose is in charge of the advertising program for Proctor & Gamble’s new laundry detergent.
She has defined the advertising program as a project with the following characteristics. The goal
is to complete the project on time and within budget, or she may not have this job next year—the
pressure is on!
Activity
Immediate
Predecessor(s)
Normal
Time
in weeks
Crash Time
in weeks
Normal Cost
Crash Cost
A
None
2
2
$15,000
$15,000
B
None
1
1
$12,000
$12,000
C
A, B
5
3
$18,000
$24,000
D
A, B
4
2
$12,000
$16,000
E
C, D
2
1
$22,000
$23,500
F
D
4
3
$32,000
$36,000
G
E, F
3
2
$19,000
$20,000
Draw the project network in the space below if you want. BLANK SPACES
43. The earliest completion time for this project is:
a. 11 weeks.
b. 12 weeks.
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c. 13 weeks.
d. 14 weeks.
44. The largest amount of slack that any activity has in this project is:
a. 1 week.
b. 2 weeks.
c. 3 weeks.
d. 4 weeks.
45. If activity D is delayed by 2 weeks, the revised earliest project completion time is:
a. 11 weeks.
b. 12 weeks.
c. 13 weeks.
d. 15 weeks.
46. The total normal cost of the project is:
a. less than $50,000.
b. more than $50,000 but less than or equal to $75,000.
c. more than $75,000 but less than or equal to $100,000.
d. more than $125,000.
47. Britt is managing this project, and his bossRose gives him $5,000 to speed up the original
completion time (i.e., project improvement dollars). The best action is to:
a. spend it on activity G first.
b. spend it on activity F first.
c. spent it on activity C first.
d. spend one-half of it on activity C and one-half on activity E.
48. Which activity should one crash to complete the project two weeks earlier than the original
project completion time to minimize total crash costs?
a. Activity G by 1 week
b. Activity G by 1 week and activity D by 1 week
c. Activity D by 2 weeks
d. Activity D by 1 week and activity F by 1 week
49. The total minimum crash cost only for the project to achieve a two-week earlier completion
time from the original project completion time is:
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a. less than $1,000.
b. more than $1,000 but less than or equal to $2,000.
c. more than $2,000 but less than or equal to $3,000.
d. more than $3,000 but less than or equal to $4,000.
50. Which of the following forms part of Program Evaluation and Review Technique (PERT)?
a.
Beta distribution
b.
Variance
c.
Most probable time
d.
All of above are related to PERT
51. Which of the following is LEAST relevant to Program Evaluation and Review Technique
(PERT)?
a.
Beta distribution
b.
Variance of activity time
c.
Most probable time
d.
Constant activity time
PERT Problem G for Questions #52 to #55
Ayben is responsible for managing an advertising and promotion project using Program Evaluation
and Review Technique (PERT) with the following activities (times are given in weeks).
Project
Immediate
Optimistic
Most Likely
Pessimistic
Expected
Activity
Activity
Predecessor(s)
Time
Time
Time
Time
Variance
A
none
2
5
14
B
none
8
11
14
C
A
5
7
9
D
A
6
9
12
E
B, C, D
1
3
5
Draw the project network here. BLANK SPACES
PERT Exam Question #52 to #55
Activity
OT
MLT
PT
ET
AV
A
2
5
14
6.00
4.00
B
8
11
14
11.00
1.00
C
5
7
9
7.00
0.44
D
6
9
12
9.00
1.00
E
1
3
5
3.00
0.44
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52. Using the table for the advertising and promotion project, what is the critical path and
expected completion time for this project?
a. A-D-E; 17 weeks
b. A-C-E; 16 weeks
c. B-E; 14 weeks
d. A-D-E; 18 weeks
53. Using the table for the advertising and promotion project, which activity has the largest
slack, and how large is that slack?
a. Activity C; 5 weeks
b. Activity A; 6 weeks
c. Activity B; 4 weeks
d. Activity E; 3 weeks
54. Using the table for the advertising and promotion project, what is the probability percentage
that the project will be completed within 16 weeks?
a. Less than or equal to 20%
b. Greater than 20% but less than or equal to 40%
c. Greater than 40% but less than or equal to 60%
d. Greater than 60%
55. Using the table for the advertising and promotion project, if the expected time (not the most
likely time) for activity B is changed to 18 weeks, by how many weeks will the project’s
expected completion time increase?
a. It will not change.
b. It will increase by 1 week.
c. It will increase by 2 weeks.
d. It will increase by 3 weeks.
56. Which of the following terms is least related to Program Evaluation and Review Technique
(PERT)?
a.
Beta distribution
b.
Variance
c.
Most probable time
d.
Crashing
Project Management Problem G for Questions #57 to #64
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A high definition television manufacturer in Asia wants to develop a new smart television as
fast as possible using Program Evaluation and Review Technique (PERT) and must complete
the design and testing work first. The objective is to be the first to market the most innovative
smart television on the planet and capture the first adopter market share. The manufacturer has
determined the following activities, precedence relationships, and time estimates in days for the
project:
Immediate
Optimistic
Most Likely
Pessimistic
Activity
Predecessors
to
tm
tp
a
none
4
6
7
b
a
1
2
3
c
a
5
5
5
d
b
7
9
12
e
b
2
4
8
f
c, d
6
9
10
Solutions are at the end of multiple choice questions #53 to #60
57. The expected duration of Activity A is _____.
a. Less than or equal to 2 days
b. Greater than 2 but less than or equal to 4 days
c. Greater than 4 but less than or equal to 6 days
d. Greater than 6 days
58. The expected variance of Activity A is _____.
a. less than or equal to 0.5 days
b. greater than 0.5 but less than or equal to 1.0 day
c. greater than 1.0 but less than or equal to 1.5 days
d. greater than 1.5 days
59. There are _____ possible paths in this project network.
a. one
b. two
c. three
d. four
60. What is the critical path
a. A-B-E
b. A-C-F
c. A-C-D-F
d. A-B-D-F
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61. What is the slack time for Activity B?
a. Zero days
b. Greater than zero but less than or equal to 1.0 days
c. Greater than 1.0 but less than or equal to 2.0 days
d. Greater than 2.0 days
62. The expected duration of the critical path in days is _____.
a. less than or equal to 20 days
b. greater than 20 but less than or equal to 25 days
c. greater than 25 but less than or equal to 30 days
d. greater than 30 days
63. The standard deviation (not variance) of the critical path in days is _____.
a. less than or equal to 1.0 days
b. greater than 1.0 but less than or equal to 2.0 days
c. greater than 2.0 but less than or equal to 3.0 days
d. greater than 3.0 days
64. The probability that the project will take longer than 28 weeks to complete is _____.
a. less than or equal to 0.1
b. greater than 0.1 but less than or equal to 0.3
c. greater than 0.3 but less than or equal to 0.6
d. greater than 0.6 but less than or equal to 0.9
65. Which one of the following statements about Project Evaluation and Review Technique
(PERT) is TRUE?
a.
The expected time is given and not computed using formulas.
b.
The probability of completing the project on time is 0 when the project target completion
time equals the expected time.
c.
The normal probability distribution is not used in PERT methods.
d.
The variance in project duration is given by the sum of the variances of the critical path
activities.
True/False Questions
1. Preparation of annual reports does not require project management techniques.
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2. Project management objectives revolve around time and budget.
3. A statement of work would be developed in the “organize” step of the project life cycle.
4. Project managers need to be specialists, not generalists.
5. In most organizations, projects cut across organizational boundaries, making it difficult to
implement projects exclusively within functional departments.
6. Strong leadership is an impediment to project management success because of the team-
based nature of most projects.
7. Immediate predecessors are activities that must be completed immediately before an activity
may start.
8. In the Activity-On-Node (AON) network, the nodes define the precedence relationships, and
the arcs define the work activities.
9. Activity times are always estimated from historical data of similar work tasks to provide
realism for a project.
10. The critical path is the sequence of activities that takes the longest time.
11. To compute the critical path, all nodes in the network are assigned an earliest starting time
of zero.
12. The early start time for an activity is computed by finding the largest early finish time of all
immediate predecessors.
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13. All activities on the critical path have a zero slack time.
14. A Gantt chart is a useful tool for allocating limited resources among project activities.
15. A slack of 2 means the project is ahead of schedule by two time periods.
16. When finding the earliest start (ES) time for an activity with two or more predecessor
activities, the largest EF among the predecessor activities is used to calculate the ES for that
activity.
17. The slack for an activity is equal to its latest finish time minus its earliest start time.
18. Crash time is the longest possible time in which the activity can realistically be completed.
19. In the critical path method (CPM), there can only be one critical path.
20. Crashing refers to the process of shortening selected activity times in order to reduce the
overall project completion time.
21. Activities on the critical path should not be crashed.
22. The Critical Path Method (CPM) allows for an evaluation of uncertainty in project
completion times.
23. Using a beta probability distribution to characterize uncertain activity times is practical
because it allows managers to use judgmental estimates to identify the distribution.
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24. When the beta probability distribution is used to characterize uncertain activity times, the
distribution of the project completion time will also have a beta probability distribution.
25. The Critical path method (CPM) and Project Evaluation and Review Technique (PERT)
are not likely to be used in marketing.
Case Study Questions (To reward students who attend class, listen and learn, and take
good class notes on the case discussion and/or student team presentation.)
1. Based on Alternative Water Supply—Single Project case study, which of the following
statements is TRUE?
a. The Alternative Water Supply project completion time was 42 weeks.
b. Sustainability was not an issue in this case study.
c. The design for the intake and transmission main, along with the bid had to be completed in
35 weeks.
d. Engineering design accounts for 50 percent of the total cost for the project designed by
Major Design Corporation (MDC).
2Which one of the following statements is TRUE of the Alternative Water Supply case study?
a. The case data allows one to use Project Evaluation and Review Technique (PERT) methods.
b. Crashing the project to 35 weeks results in two critical paths.
c. The project was crashed 7 weeks to get to the target completion time of 35 weeks.
d. The total crash cost exceeds the total cost of the original project.
Problems for Manual Grading, Take-Home Exams and Partial Credit (Also, review the
OM Instructor’s Manual for end-of-chapter questions/problems)
1. Define a project. Give some non-manufacturing or non-construction examples.
2. Explain the stages of the project life cycle and what types of decisions are normally made at
each stage.