Deck 5: Estimating Project Times and Costs

Question 1

Ed is looking over the actual results of projects and comparing them to what was estimated.He notices that projects that took six months or longer to complete were noticeably more off the estimates.Which of the following factors is he recognizing?

A)Padding estimates
B)Planning horizon
C)Project structure
D)People
E)Organization culture

Answer 1

B
Explanation: The quality of the estimate depends on the planning horizon; estimates of current events are close to 100 percent accurate but are reduced for more distant events.The accuracy of time and cost estimates should improve as you move from the conceptual phase to the point where individual work packages are defined.

Question 2

Which of the following is a good condition for top-down estimating?

A)Cost and time important
B)Fixed price contract
C)Customer wants details
D)Internal, small project
E)All of these are good conditions for top-down estimating

Answer 2

D

Question 3

The process of forecasting or approximating the time and cost of completing project deliverables is called

A)Budgeting
B)Predicting
C)Estimating
D)Planning
E)Guesstimating

Answer 3

C
Explanation: Estimating is the process of forecasting or approximating the time and cost of completing project deliverables.

Question 4

The approach that begins with a top-down estimate for the project and then refines estimates as the project is implemented is known as ______ method.

A)Function point
B)Template
C)Learning curve
D)Phase estimating
E)Apportion

Question 5

Which of the following is not one of the factors that need to be considered to improve quality of estimates for project times and costs?

A)Planning horizon
B)People
C)Padding estimates
D)Profit
E)Project structure

Question 6

Janet is forecasting how much money her department needs to support a new project.She estimates that two people and $25,000 in expenses will cover her needs.Because management typically insists on reducing forecasts by 20 percent, she increases her estimates to allow for that reduction.Which of the following factors is illustrated in this situation?

A)Padding estimates
B)Planning horizon
C)Project structure
D)People
E)Organization culture

Question 7

Which of the following methods is not considered a top-down approach to estimating project time and cost?

A)Ratio
B)Template
C)Apportion
D)Function point
E)Learning curve

Question 8

Which of the following is not one of the bottom-up approaches to estimating project time and cost?

A)Parametric procedures applied to specific tasks
B)Estimates for the WBS work packages
C)Learning curve
D)Template method
E)All of these are bottom-up approaches

Question 9

In practice, estimating processes are frequently classified as

A)Top down/bottom up
B)Rough/polished
C)Precise/order of magnitude
D)Draft/final
E)Both A and B are correct

Question 10

Jose is forecasting project time and cost for constructing a new building by multiplying the total square footage by a given dollar amount.Which of the following methods is he using?

A)Ratio
B)Template
C)Apportion
D)Function point
E)Learning curve

Question 11

Laura is forecasting the time and cost of developing an intranet for a new customer.Her department has completed six such intranets for customers during the last two years.Although the proposed system is about the same size as the others she estimates that it will take about 10 percent less time and money.Which of the following methods is she using?

A)Ratio
B)Template
C)Apportion
D)Function point
E)Learning curve

Question 12

A typical statement in actual practice is that estimates should have a probability of being met ______ of the time.

A)100%
B)98%
C)95%
D)90%
E)80%

Question 13

Learning curves are more likely to apply in situations where most of the costs are

A)Materials
B)Labor
C)Overhead
D)Evenly spread over materials, labor, and overhead
E)All of these are equally likely situations for learning curves

Question 14

Which of the following is a good condition for bottom-up estimating?

A)Strategic decision making
B)Internal, small project
C)Fixed price contract
D)High uncertainty
E)Both C and D are good conditions for bottom-up estimating

Question 15

Which of the following would be the best method for projects where the final product is not known and the uncertainty is very large?

A)Function point
B)Template
C)Learning curve
D)Phase estimating
E)Apportion

Question 16

Top-down estimates are most likely to occur during the ______ phase.

A)Concept
B)Planning
C)Execution
D)Delivery
E)All of these are equally likely

Question 17

______ estimates are most likely to use low cost, efficient methods.

A)Apportion
B)Ratio
C)Top-down
D)Bottom-up
E)All of these are equally likely

Question 18

Sean is forecasting the time and cost of developing a customized software program by looking at the number of inputs, outputs, inquires, files, and interfaces.Which of the following methods is he using?

A)Ratio
B)Template
C)Apportion
D)Function point
E)Learning curve

Question 19

A good starting point for developing time and cost estimates is

A)Past experience
B)Work packages
C)Task analysis
D)Time and motion studies
E)Work breakdown structure

Question 20

The accuracy of top-down estimates will typically be in the range of

A)Minus 50% to plus 50%
B)Minus 0% to plus 75%
C)Minus 20% to plus 60%
D)Minus 35% to plus 35%
E)Minus 10% to plus 30%

Question 21

Companies like Boeing, Kodak, and IBM are using which of the following for improving the estimating process?

A)Adjusting estimates based on individual forecasting abilities
B)Benchmarking using the experience of other companies
C)Using time and motion studies
D)Creating historical databases of previous projects
E)All of these are correct

Question 22

Typical kinds of costs found in a project include

A)Direct costs
B)Project overhead costs
C)General and administrative costs
D)Only A and B are included
E)A, B, and C are all included

Question 23

The accuracy of bottom-up estimates will typically be in the range of

A)Minus 50% to plus 50%
B)Minus 0% to plus 75%
C)Minus 20% to plus 60%
D)Minus 35% to plus 35%
E)Minus 10% to plus 30%

Question 24

Estimates that are usually derived from analogy or mathematical relationships are called ________ estimates.

Question 25

In a learning curve, the improvement ratio is applied to which of the following items?

A)Direct materials
B)Direct labor
C)Overhead
D)Both A and B are correct
E)A, B, and C are all correct

Question 26

The ________ factor in estimating project times and costs can introduce errors due to staff turnover, the skills of the participants, and whether the team members have worked with each other on previous projects.

Question 27

Which of the following is not one of the recommended guidelines for developing useful work package estimates?

A)Estimates should be made by those responsible for the work
B)Use several people to estimate the same work
C)Estimates should be based on normal conditions
D)Estimates should include a normal level of contingency
E)Estimates should be independent of other projects

Question 28

The tendency to over-estimate project time and cost in order to improve the likelihood of meeting the estimates is known as the ________ factor.

Question 29

A manager getting further into a project and obtaining a better understanding of what needs to be done to accomplish a project is an example of:

A)Hidden interaction costs
B)Things going wrong on a project
C)Normal conditions not applying
D)Changes in project scope
E)None of these are correct

Question 30

Which of the following would be considered a direct project cost?

A)Labor
B)Materials
C)Equipment
D)Both A and B are direct costs
E)A, B, and C are all considered direct costs

Question 31

The estimating factor known as ________ considers the decreasing accuracy of estimates as one forecasts activities that are further into the future.

Question 32

Resource shortages, in the form of people, equipment, or materials, is a good example of

A)Hidden interaction costs
B)Things going wrong on a project
C)Normal conditions not applying
D)Changes in project scope
E)None of these are correct

Question 33

Which of the follow top-down methods is used when projects closely follow past projects in features and costs and result in costs being assigned by percentages to major segments of the project?

A)Apportion
B)Function point
C)Phase estimating
D)Learning curve
E)Consensus

Question 34

The bottom-up approach for estimating times and costs that uses costs from past projects that were similar to the current project is known as:

A)Detailed WBS work package estimates
B)Template method
C)Function point method
D)Time-phased cost estimates
E)Phase estimating

Question 35

The cost to prepare bottom-up estimates will typically run how much more than the costs to prepare the top-down estimates?

A)About the same
B)About twice as much
C)About three times as much
D)About four times as much
E)About five times as much

Question 36

People working on prototype development needing time to interact with the design engineers after the design is completed is an example of:

A)Hidden interaction costs
B)Things going wrong on a project
C)Normal conditions not applying
D)Changes in project scope
E)None of these are correct

Question 37

Design flaws being revealed after the fact, extreme weather conditions, and accidents occurring are examples of:

A)Hidden interaction costs
B)Things going wrong on a project
C)Normal conditions not applying
D)Changes in project scope
E)None of these are correct

Question 38

Project costs are typically viewed from all of the following except:

A)Scheduled
B)Sunk
C)Actual
D)Committed
E)All of these are correct

Question 39

Reasons why estimating time and cost are important include all of the following except:

A)To schedule work
B)To determine how long the project should take and cost
C)To develop cash flow needs
D)To determine how well the project is progressing
E)All of the above are valid reasons

Question 40

Estimates that are typically based on estimates of elements found in the work breakdown structure are called ________ estimates.

Question 41

Using the ________ method of forecasting project time and costs is the preferred method for situations where the cost and time estimates are important, in a fixed contract situation, and when the customer wants a lot of detail.

Question 42

In the ________ method of estimating project time and costs past projects are used as a starting point with adjustments made based on differences in the new project.

Question 43

Costs that are not directly related to a specific project, such as advertising, accounting, and senior management, are classified as ____________.

Question 44

The prevailing belief in some firms that detailed estimating takes too much time and is not worth the effort or that it is impossible to predict the future is an example of the ________ factor.

Question 45

The ________ approach to estimating project time and cost begins with an overall estimate for the project and then refines estimates for various stages of the project as it is implemented.

Question 46

Given that a project closely follows past projects in features and costs, the ________ method of assigns costs and times to particular phases that a project will go through.

Question 47

Using the _______ method of forecasting project time and costs is the preferred method for situations involving strategic decision-making, projects with a high degree of uncertainty, and projects with an unstable scope.

Question 48

Project estimates should be broken down into as much detail than and with as much accuracy as possible.

Question 49

The cost to prepare a top-down budget will typically run ________ percent of the total project cost.

Question 50

The ________ method of estimating project time and costs is useful for projects requiring the same task, group of tasks, or product repeated several times, especially if it is labor intensive.

Question 51

In the ________ method of top-down estimating, a quantitative relationship is established between the estimates and a project parameter.

Question 52

Project costs such as labor and materials are typically classified as ________ costs.

Question 53

The information necessary to conduct a bottom-up estimate of project time and costs starts with the ________.

Question 54

Bottom-up-estimating is another name for overzealous top management estimates.

Question 55

The ________ method for estimating project time and cost uses weighted variables based on major parameters and is frequently used in the development of software.

Question 56

The cost to prepare a bottom-up budget will typically run ________ percent of the total project cost.

Question 57

The __________ method is a top-down approach that uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost.

Question 58

Estimates should be made based on ________ conditions, efficient methods, and a normal level of resources.

Question 59

Probably the most reliable method for estimating time and cost is to use the _______ and to ask the people responsible for the work package to make the estimates.

Question 60

The salary of the project manager and temporary rental space for the project team would be classified as ________ costs.

Question 61

The project structure chosen to manage the project will have little impact on the actual project work to be accomplished.

Question 62

As long as everyone in a project adds just a little padding to reduce risk, the project duration and costs are probably overstated by a small amount.

Question 63

If a project is internal to the company and relatively small, the bottom-up approach to estimating time and costs for the project is the best choice.

Question 64

Using a WBS permits the use of different levels of detail for different levels of management.

Question 65

Estimating the total cost of a project by multiplying each major function by a complexity factor is an example of the apportion method of estimating costs.

Question 66

At the strategic level top-down estimating methods are used to evaluate a project proposal.

Question 67

General and Administrative costs are usually allocated as a percent of the total of a direct cost such as labor, materials, or equipment.

Question 68

Organization culture can significantly influence project time and cost estimates.

Question 69

Phase estimating uses both the bottom-up and top-down methods for estimating project time and costs.

Question 70

If time and costs are important to a project the top-down approach to estimating time and costs for the project is the best choice.

Question 71

The Consensus method of estimating costs is a bottom-up technique.

Question 72

The apportion method is a top-down approach that uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost.

Question 73

The salary of the project manager and her administrative assistant is classified as direct labor costs.

Question 74

Estimating the total cost of a house by multiplying the total square feet by a cost per square foot is an example of the apportion method of estimating costs.

Question 75

Phase estimating is used when a project cannot be rigorously defined because of the uncertainty of design or the final product.

Question 76

Due to the averaging out of under-estimates and over-estimates, a long duration project is more likely to be on target than a short term, small project.

Question 77

The use of past experience is almost always used primarily in the initial phases of a project.

Question 78

The ideal approach to estimating project time and costs is to use both the top-down and the bottom-up approach.

Question 79

Top-down estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost.

Question 80

The function point method of time and cost estimating is best applied to projects that have large, complex physical deliverables, such as a bridge or building.