Exam 19: Project Selection and Portfolio Management

One of the ways in which programs and project portfolios differ, is (check one):

Statement: An important element in portfolio management is knowing the organization's resource capacity for projects.

The role of the PMO in portfolio management (check all that apply):

T/F Individual managers of multiple projects are responsible for project portfolio management of all the project they manage.

Three systems development project are being considered, A, B, and C. The table below shows the rated effectiveness (0-100) of four criteria and the total cost for each of the systems. Projects with a weighted effectiveness less than 80 are rejected. Compare the systems using cost-effectiveness analysis. System System System C Criterias W( weight \%) E E E Functionality 40 90 80 80 Scalability 10 70 80 75 Maintainability 20 75 90 70 Ease of use 30 70 85 95 Cost \ 2.9 \ 2.5 \ 3.0

T/F Individual project managers are responsible for project portfolio management.

Statement: Quantitative methods for project evaluation are better than subjective methods simply because they provide results that are objective and unbiased

Management determines the relevant ways to categorize projects, and allocates resources to each category. When a project is reviewed for possible selection, it is assigned to a category and given a priority. Actual selection depends on its priority and whether resources in the category are sufficient to allocate to it. This method is called (check one)

Statement: Individual managers of multiple projects are responsible for project portfolio management of all the project they manage.

In general, a company's project portfolio (check all that apply):

Lack of portfolio management can lead to (check all that apply):

Two technologies are being considered for a rocket motor for space tourist vehicles. Costs are estimated for development and initial production (including the plant to produce the motors). Also estimated are the demand and likely profit margins for the motors in terms of NPV. This information along with estimates of the probabilities of success of the development and launch efforts are shown below: Motor type Development Prob Production Prob NPV A 50 0.70 20 0.60 200 B 70 0.60 25 0.50 250 Based on ECV, which motor project is better?

Overall, the advantages of project portfolio management include (check all that apply):

In general, a company's project portfolio (check all that apply):

T/F Project portfolio management is somewhat analogous to investment portfolio management.

The goal of portfolio management is to (check one)

Overall, the advantages of project portfolio management include (check all that apply):

Statement: The presence portfolio management in an organization has impact on the selection/approval of projects.

Statement: A "balanced" project portfolio refers to a portfolio where the sum of the value of "big" project is equal to the sum of the value of "small" projects

A pharmaceutical company is developing a new process for producing a virus drug. The expected cost of the effort is $15.5 M, although there is a 20% chance the development effort will fail. Should the effort succeed, the drug will be produced in a new facility that will cost $26 M. Once in the market, the drug is expected to provide a NPV sales profit of $120 M. A competitor is also working on an almost identical process, and should it finish and capture market share first, the NPV sales profit will be only $50 M. The likelihood of the competitor finishing first is estimated at 50%. What is the ECV?