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CertPrs8/PMP® Project Management Professional Study Guide/Joseph Phillips/673-5/Appendix B Blind Folio 679

BCritical Exam Information

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680 Appendix B: Critical Exam Information

CertPrs8/PMP® Project Management Professional Study Guide/Joseph Phillips/673-5/Appendix B

Exam candidates want to pass their PMP exam on the first attempt. Why bother sitting for an exam if you know you’re not prepared? In this appendix, you’ll find the details that you must know to pass the exam. These facts won’t be everything you need to know to

pass the PMP exam—but you can bet you won’t pass the exam if you do not know the critical information in this appendix.

Exam Test-Passing TipsFor starters, don’t think of this process as preparing to take an exam, but think of it as “preparing to pass an exam.” Anyone can prepare to take an exam: just show up. Preparing to pass the PMP exam requires project management experience, diligence, and a commitment to study.

Days Before the ExamIn the days leading up to your scheduled exam, here are some basics you should do to prepare yourself for success:

■ Get some moderate exercise. Find time to go for a jog, lift weights, take a swim, or do whatever workout routine works best for you.

■ Eat smart and healthy. If you eat healthy food, you’ll feel good—and feel better about yourself. Be certain to drink plenty of water, and don’t overdo the caffeine.

■ Get your sleep. A well-rested brain is a sharp brain. You don’t want to sit for your exam feeling tired, sluggish, and worn-out.

■ Time your study sessions. Don’t overdo your study sessions—long, crash study sessions aren’t that profitable. In addition, try to study at the same time every day at the time your exam is scheduled.

Practice the Testing ProcessIf you could take one page of notes into the exam, what information would you like on this one-page document? Of course you absolutely cannot take any notes or reference materials into the exam area. However, if you can create and memorize one sheet of notes, you absolutely may re-create this once you’re seated in the exam area.

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Exam Test-Passing Tips 681


Practice creating a reference sheet so you can immediately, and legally, re-create this document once your exam has begun. You’ll be supplied with several sheets of blank paper and a couple of pencils. Once your exam process begins, re-create your reference sheet. The following are key pieces of information you’d be wise to include on your reference sheet (you’ll find all of this key information in this appendix):

■ Activities within each process groups

■ Estimating formulas

■ Communication formula

■ Normal distribution values

■ Earned value management formulas

■ Project management theories

Testing TipsThe questions on the PMP exam are fairly direct and not too verbose, but they may offer a few red herrings. For example, you may face questions that state, “All of the following are correct options expect for which one?” The question wants you to find the incorrect option, or the option that would not be appropriate for the scenario described. Be sure to understand what the question is asking for. It’s easy to focus on the scenario presented in a question and then see a suitable option for that scenario in the answer. The trouble is that if the question is asking you to identify an option that is not suitable, you just missed the question. Carefully read the question to understand what is expected for an answer.

Here’s a tip that can work with many of the questions: Identify what the question wants for an answer and then look for an option that doesn’t belong with the other possible answers. In other words, find the answer that doesn’t fit with the other three options. Find the “odd man out.” Here’s an example: EVM is used during the _______________.

A. Controlling phase

B. Executing phase

C. Closing phase

D. Entire project

Notice how options A, B, and C are exclusive? If you choose A, the controlling phase, it implies that EVM is not used anywhere else in the project. The odd man out here is D, the entire project; it’s considered the “odd” choice because it, by itself,

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is not an actual process group. Of course, this tip won’t work with every question—but it’s handy to keep in mind.

For some answer choices, it may seem like two of the four options are both possible correct answers. However, because you may only choose one answer, you must discern which answer is the best choice. Within the question, there will usually be some hint describing the progress of the project, the requirements of the stakeholders, or some other clue that can help you determine which answer is the best for the question.

Answer Every Question—OnceThe PMP exam has 200 questions—of which 175 are “real questions” – you don’t have to answer every question correctly, just enough to pass. In other words, don’t waste three of your four hours laboring over one question – the hard questions are worth just as much as the easy ones. And you know, I’m sure, that you never leave any question blank—even if you don’t know the answer to the question. A blank question is the same as a wrong answer. As you move through the exam and you find questions that stump you, use the “mark question” option in the exam software, choose an answer you suspect may be correct, and then move on. When you have answered all of the questions, you are given the option to review your marked answers.

Some questions in the exam may prompt your memory to come up with answers to questions you have marked for review. However, resist the temptation to review those questions you’ve already answered with confidence and haven’t marked. More often than not, your first instinct is the correct choice. When you completed the exams at the end of each chapter, did you change correct answers to wrong answers? If you did in practice, you’ll do it on the actual exam.

Use the Process of EliminationWhen you’re stumped on a question, use the process of elimination. For each question, there’ll be four choices. On your scratch paper, write down “ABCD.” If you can safely rule out “A,” cross it out of the ABCD you’ve written on your paper. Now focus on which of the other answers won’t work. If you determine that “C” won’t work, cross it off your list. Now you’ve got a 50-50 chance of finding the correct choice.

If you cannot determine which answer is best, “B” or “D” in this instance, here’s the best approach:

1. Choose an answer in the exam (no blank answers, remember?).

2. Mark the question in the exam software for later review.

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Everything You Must Know 683


3. Circle the “ABCD” on your scratch paper, jot any relevant notes, and then record the question number next to the notes.

4. During the review, or from a later question, you may realize which choice is the better of the two answers. Return to the question and confirm that the best answer is selected.

Everything You Must KnowAs promised, this section covers all of the information you must know going into the exam. It’s highly recommended that you create a method to recall this information. Here goes.

The 42 Project Management ProcessesTable B-1 lists the 42 project management processes you should be familiar with. I’ve ordered them here according to knowledge area and the corresponding chapter in this book.

Knowledge AreaNumber of Processes Processes Chapter

Project Integration Management 6 Develop project charterDevelop project management planDirect and manage project executionMonitor and control the project workPerform integrated change controlClose project or phase

4

Project Scope Management 5 Collect requirementsDefine scopeCreate WBSVerify scopeControl scope

5

TABLE B-1 Project Management Processes

(Continued)

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Knowledge AreaNumber of Processes Processes Chapter

Project Time Management 6 Define activitiesSequence activitiesEstimate activity resourcesEstimate activity durationsDevelop scheduleControl schedule

6

Project Cost Management 3 Estimate costsDetermine budgetControl costs

7

Project Quality Management 3 Plan qualityPerform quality assurancePerform quality control

8

Project HR Management 4 Develop human resources planAcquire project teamDevelop project teamManage project team

9

Project Communications Management

5 Identify stakeholdersPlan communicationsDistribute informationManage stakeholder expectationsReport performance

10

Project Risk Management 6 Plan risk managementIdentify risksPerform qualitative risk analysisPerform quantitative risk analysisPlan risk responsesMonitor and control risks

11

Project Procurement Management 4 Plan procurementsConduct procurementsAdminister procurementsClose procurements

12

TABLE B-1 Project Management Processes (Continued)

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Magic PMP FormulasThe following shows the major formulas you should know for the exam.

Earned Value Management FormulasTable B-1 shows the EVM formulas you should know for the exam.

Name FormulaSample Mnemonic Device

Planned Value PV = % complete where the project should be

Please

Earned Value EV = % complete × BAC Eats

Cost Variance CV = EV – AC Carl’s

Schedule Variance SV = EV – PV Sugar

Cost Performance Index CPI = EV / AC Candy

Schedule Performance Index SPI = EV / PV S (This and the following two spell “SEE”)

Estimate at Completion EAC = BAC / CPI E

Estimate to Complete ETC = EAC – AC E

To-complete performance index (BAC)

(BAC – EV) / (BAC – AC) The

To-complete performance index (EAC)

(BAC – EV) / (EAC – AC) Taffy

Variance at Completion VAC = BAC – EAC Violin

3-point estimate

P + O + M 3

PERT

P + (4 × O) + M 6 Future Value formula

FV = PV (1 + i)n

Present Value formula: PV = FV/(1 + i)n

NormalDistribution

+/− 1 Sigma = 68.26 +/− 1 Sigma = 95.46 +/− 1 Sigma = 99.73 +/− 1 Sigma = 99.99

CommunicationChannels

N (N − 1) 2

TABLE B-2

Project Management Earned Value Management Formulas

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Quick PMP FactsThis section has some quick facts you should know at a glance. Hold on, this moves pretty fast.

Organizational StructuresOrganizational structures are relevant to the project manager’s authority. A project manager has authority from weakest to highest in the following order:

■ Functional

■ Weak matrix

■ Balanced matrix

■ Strong matrix

■ Projectized

WBS FactsThe work breakdown structure is the big picture of the project deliverables: It is not the activities that will create the project, but the components the project will create. The WBS helps the project team and the project manager create accurate cost and time estimates. The WBS also helps the project team and the project manager create an accurate activity list. The WBS is an input to five planning processes.

■ Cost estimating

■ Cost budgeting

■ Resource planning

■ Risk management planning

■ Activity definition

Project Scope FactsProjects are temporary endeavors to create a unique product. They are selected by one of two methods.

■ Benefit measurement methods These include scoring models, cost-benefit ratios, and economic models.

■ Constrained optimization These include mathematical models based on linear, integer, and dynamic programming. (This probably won’t be on the PMP exam as a viable answer.)

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The project scope defines all of the required work, and only the required work, to complete the project. Scope management is the process of ensuring that the project work is within scope and protecting the project from scope creep. The scope statement, along with the WBS and WBS dictionary, is the baseline for all future project decisions. There are two types of scope.

■ Product scope Defines the attributes of the product or service the project is creating

■ Project scope Defines the required work of the project to create the product

Scope verification is the process completed at the end of each phase and of each project to confirm that the project has met the requirements. It leads to formal acceptance of the project deliverable.

Project Time FactsTime can be a project constraint. Effective time management is the scheduling and sequencing of activities in the best order to ensure that the project completes successfully and in a reasonable amount of time. These are some key terms for time management.

■ Lag Waiting between activities

■ Lead Activities come closer together and even overlap

■ Free float The amount of time an activity can be delayed without delaying the next scheduled activity’s start date

■ Total float The amount of time an activity can be delayed without delaying the project’s finish date

■ Float Sometimes called slack—a perfectly acceptable synonym

■ Duration May be abbreviated as “du.” For example, du = 8d means the duration is eight days.

There are three types of dependencies between activities.

■ Mandatory This hard logic requires a specific sequence between activities.

■ Discretionary This soft logic prefers a sequence between activities.

■ External Due to conditions outside of the project, such as those created by vendors, the sequence must happen in a given order.

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Project Cost FactsThere are several methods of providing project estimates.

■ Bottom-up Project costs start at zero, each component in the WBS is estimated for costs, and then the “grand total” is calculated. This is the longest method to complete, but provides the most accurate estimate.

■ Analogous Project costs are based on a similar project. This is a form of expert judgment, but it is also a top-down estimating approach, so it is less accurate than a bottom-up estimate.

■ Parametric Modeling Price is based on cost per unit; examples include cost per metric ton, cost per yard, and cost per hour.

There are four types of costs attributed to a project.

■ Variable costs The costs are dependent on other variables. For example, the cost of a food-catered event depends on how many people register to attend the event.

■ Fixed costs The cost remains constant throughout the project. For example, a rented piece of equipment has the same fee each month, even if it is used more in some months than in others.

■ Direct costs The cost is directly attributed to an individual project and cannot be shared with other projects (for example, airfare to attend project meetings, hotel expenses, and leased equipment that is used only on the current project).

■ Indirect costs These are the cost of doing business; examples include rent, phone, and utilities.

Quality Management FactsThe cost of quality is the money spent investing in training, in meeting requirements for safety and other laws and regulations, and in taking steps to ensure quality acceptance. The cost of nonconformance is the cost associated with rework, downtime, lost sales, and waste of materials.

Some common quality management charts and methods include the following:

■ Ishikawa diagrams (also called fishbone diagrams) are used to find causes and effects that contribute to a problem.

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■ Flow charts show the relationship between components and the flow of a process through a system.

■ Pareto diagrams identify project problems and their frequencies. These are based on the 80/20 rule: 80 percent of project problems stem from 20 percent of the work.

■ Control charts plot out the result of samplings to determine if projects are “in control” or “out of control.”

■ Kaizen technologies comprise approaches to make small improvements in an effort to reduce costs and achieve consistency.

■ Just-in-time ordering reduces the cost of inventory, but requires additional quality because materials would not be readily available if mistakes occur.

Human Resource FactsThere are several human resource theories the PMP candidate should be familiar with on the PMP exam. They are the following:

■ Maslow’s Hierarchy of Needs There are five layers of needs for all humans: physiological, safety, social needs (such as love and friendship), self-esteem, and the crowning jewel, self-actualization.

■ McClelland’s Theory of Needs Needs are developed by the person’s life experiences, and may shift over time. Of the three needs that drive people— power, affiliation, or achievement—one of these is the most prominent. McClelland developed the Thematic Apperception Test to determine what needs are driving individuals.

■ Herzberg’s Theory of Motivation There are two catalysts for workers: hygiene agents and motivating agents.

■ Hygiene agents These do nothing to motivate, but their absence demo-tivates workers. Hygiene agents are the expectations all workers have: job security, a paycheck, clean and safe working conditions, a sense of belong-ing, civil working relationships, and other basic attributes associated with employment.

■ Motivating agents These are the elements that motivate people to excel. They include responsibility, appreciation of work, recognition, opportunity to excel, education, and other opportunities associated with work other than just financial rewards.

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■ McGregor’s Theory of X and Y This theory states “X” people are lazy, don’t want to work, and need to be micromanaged. “Y” people are self-led, motivated, and can accomplish things on their own.

■ Ouchi’s Theory Z This theory holds that workers are motivated by a sense of commitment, opportunity, and advancement. Workers will work if they are challenged and motivated. Think participative management.

■ Expectancy Theory People will behave based on what they expect as a result of their behavior. In other words, people will work in relation to the expected reward of the work.

Communication FactsCommunicating is the most important skill for the project manager. With that in mind, here are some key facts on communications:

■ Communication channels formula: N(N − 1)/2. N represents the number of stakeholders. For example, if you have 10 stakeholders, the formula would read 10(10 − 1)/2 for 45 communication channels. Pay special attention to questions wanting to know how many additional communication channels you have based on added stakeholders. For example, if you have 25 stakeholders on your project and have recently added 5 team members, how many additional communication channels do you now have? You’ll have to calculate the original number of communication channels, 25(25 – 1)/2 = 300; then calculate the new number with the added team members, 30(30 – 1)/2 = 435; and finally, subtract the difference between the two: 435 – 300 = 135, the number of additional communication channels.

■ Fifty-five percent of communication is nonverbal.

■ Effective listening is the ability to watch the speaker’s body language, interpret paralingual clues, and decipher facial expressions. Following the message, effective listening has the listener asking questions to achieve clarity and offering feedback.

■ Active listening requires receivers of the message to offer clues, such as nodding the head to indicate they are listening. It also requires receivers to repeat the message, ask questions, and continue the discussion if clarification is needed.

■ Communication can be hindered by trendy phrases, jargon, and extremely pessimistic comments. In addition, other communication barriers include noise, hostility, cultural differences, and technical interruptions.

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Risk Management FactsRisks are unplanned events that can have positive or negative effects on the projects. Most risks are seen as threats to the project’s success—but not all risks are bad. For example, there is a 20 percent probability that the project will realize a discount in shipping, which will save the project $15,000. If this risk happens, the project will save money; if the risk doesn’t happen, the project will have to spend the $15,000. Risks should be identified as early as possible in the planning process. A person’s willingness to accept risk is the utility function (also called the utility theory). The Delphi Technique can be used to build consensus on project risks.

The only output of the risk planning is the risk management plan. There are two broad types of risks.

■ Business risk The loss of time and finances (where a downside and upside exist)

■ Pure risk The loss of life, injury, and theft (where only a downside exists)

Risks can be responded to in one of seven methods.

■ Avoidance Avoid the risk by planning a different technique to remove the risk from the project.

■ Mitigation Reduce the probability or impact of the risk.

■ Acceptance The risk’s probability or impact may be small enough that the risk can be accepted.

■ Transference The risk is not eliminated, but the responsibility and ownership of the risk is transferred to another party (for example, through insurance).

■ Exploit The organization wants to ensure that the identified risk does happen to realize the positive impact associated with the risk event.

■ Share Sharing is nice. When sharing, the risk ownership is transferred to the organization that can most capitalize on the risk opportunity.

■ Enhance To enhance a risk is to attempt to modify its probability and/or its impacts to realize the most gains from the identified risk.

■ Contingency funds Monies reserved for risk events.

■ Secondary risks A risk that comes into a project as a direct result of another risk response.

■ Risk triggers A condition, event, or warning signs of a risk event that causes a risk reaction.

■ Residual risks Risks that remain after a risk response. These are usually small and are accepted by the project team.

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Procurement FactsA contract statement of work (SOW) is provided to the potential sellers so they can create accurate bids, quotes, and proposals for the buyer. A bidders’ conference may be held so sellers can query the buyer on the product or service to be procured.

A contract is a formal agreement, preferably written, between a buyer and seller. On the PMP exam, procurement questions are usually from the buyer’s point of view. All requirements the seller is to complete should be clearly written in the contract. Requirements of both parties must be met, or legal proceedings may follow. Table B-3 sums up all the contract types you should know for your exam.

Contract Type Acronym Attribute Risk Issues

Cost Plus Fixed Fee CPFF Actual costs plus profit margin for seller

Cost overruns represent risk to the buyer.

Cost Plus Percentage of Cost

CPPC Actual costs plus profit margin for seller

Cost overruns represent risk to the buyer. This is the most dangerous contract type for the buyer.

Cost Plus Award Fee CPAF Actual costs plus an award based on seller-defined objectives for the project

Buyer carries the risk, as the seller is the judge of the contract work and performance.

Cost Plus Incentive Fee

CPIF Actual costs plus profit margin for seller

Cost overruns represent risk to the buyer.

Fixed-Price FP Agreed price for contracted product; can include incentives for the seller

Seller assumes risk.

Fixed Price with Economic Price Adjustment Contracts

FP-EPA Agreed-upon price for contracted product; can include cost adjustments based on predefined categories of cost


Firm Fixed-Price FFP Agreed-upon price for contracted product


TABLE B-3

Project Management Contract Types

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Contract Type Acronym Attribute Risk Issues

Fixed-Price Incentive Fee

FPIF Agreed-upon price for contracted product; can include incentives for the seller


Time and Materials T&M Price assigned for the time and materials provided by the seller.

Contracts without “not-to-exceed” clauses can lead to cost overruns.

Unit Price Price assigned for a measurable unit of product or time (for example, $130 for engineer’s time on the project)

Risk varies with the product. Time represents the biggest risk if the amount needed is not specified in the contract.

You should also know that a purchase order is a unilateral form of contract and that a letter of intent is not a contract, but shows the intent of the buyer to purchase from a specific seller.

TABLE B-3

Project Management Contract Types

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