Week 6 Summary Review Questions

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American Military University *

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221

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Industrial Engineering

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Oct 30, 2023

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Week 6 Summary Review Questions 1. Questions : a. An estimate that is obtained by scaling up an estimate from a similar project is a(n) analogous estimate. b. Describe the following terms; 1. Analogous Estimate technique - The analogous estimating technique uses information from similar projects to establish a cost estimate based on the data available. Analogous estimating needs to include expert judgement in order to establish reusability of the data, and is used where there is limited information about the project. 2. Parametric Estimating technique - Parametric estimating is quantitative and uses statistics to calculate the expected amount of resources needed to complete your project, whether it be cost or time, or even human resources. Project managers use parameters or characteristics based on historical data or past projects when calculating estimates. 3. Bottom-up Estimating technique - Bottom-up estimating involves the estimation of work at the lowest possible level of detail. These estimates are then aggregated in order to arrive at summary totals. By building detailed cost and time estimates for a work package, the probability of being able to meet the estimated amounts improves substantially. 2. Questions : a. An estimate that uses standard costs per unit such as price per square foot or price per cubic yard is a scaled estimate.

b. Matching the transfer of funds into the project account with the money spent is called reconciliation . 3. Questions : a. Money that is allocated for dealing with unplanned but predictable expenses is contingency reserve. b. What is a budget timeline? - A budget planning calendar is a schedule of activities that must be completed to create and develop a budget. Budget planning calendars are necessary for the creation of complex budgets used by large organizations. 4. Questions : a. The formula used to calculate the cost performance index is CPI = earned value (EV) / actual cost (AC) . b. What is the budgeted cost of work performed? - The dollarized (budgeted) value of all work actually accomplished in a given period of time. 5. Questions : a. What is cost performance index? - Measures the project's financial performance and the cost efficiency of budgeted resources . b. What is a variance index? - It is a measure of cost performance on a project 6. Questions :

a. TRUE - Schedule variance is the difference between the part of the budget that has been done so far (EV) versus the part that was planned by now. b. The formula used to calculate the estimate to complete for atypical cost variances is ETC = BAC − EV . 7. Questions : a. The sum of the budgeted amounts for the tasks that have been performed is the earned value (two words). b. Schedule variance is the EV minus the PV and cost variance is the EV minus the AC (use acronyms). 8. Questions : a. Schedule performance index is EV / PV and the cost performance index is EV / AC (use acronyms). b. The revised final budget is the AC plus the ETC (use acronyms). 9. Questions : a. What is Earned Value and how is it used to measure project progress? - Earned value (EV) is a way to measure and monitor the level of work completed on a project against the plan. It's a quick way to tell if you're behind schedule or over budget on your project. You can calculate the EV of a project by multiplying the percentage complete by the total project budget.

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b. What is schedule variance – provide examples - Schedule Variance represents the monetary value that the task is behind or ahead of schedule, relative to the task budget. For example, let's say the task Build Fence has a budget of $4,000 and the schedule variance is $1,000. This would represent a project that is significantly ahead of schedule. 10. Questions : a. FALSE - The schedule performance index (SPI) is the ratio of the earned value and the cost value. b. TRUE – The final budget is the actual (AC) to this point plus the estimate to complete (ETC).