Information Technology For Managers 2nd Edition By by George Reynolds – Test Bank
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CHAPTER 3— PROJECT MANAGEMENT
MULTIPLE CHOICE:
1. Which
of the following provides customer benefits and gives a tough competition for competitors
to imitate?
2. Core
analysis
3. Core
scheduling
4. Core
competency
5. Core
distribution
ANS: C
RATIONALE: Researchers Gary Hamel and C.K. Prahalad defined the
term core competency to mean something that a firm can do well and that
provides customer benefits, is hard for competitors to imitate, and can be
leveraged widely to many products and markets.Today, many organizations
recognize project management as one of their core competenciesand see their
ability to manage projects better as a way to achieve an edge overcompetitors
and deliver greater value to shareholders and customers.
2. Which
of the following is true of core competency?
3. It
makes it easy for competitors to know the strategy of their rivals.
4. It
makes it difficult for competitors to imitate others products.
5. It
cannot be leveraged widely to many products.
6. It
cannot penetrate into markets.
ANS: B
RATIONALE: Researchers Gary Hamel and C.K. Prahalad defined the
term core competency to mean something that a firm can do well and that
provides customer benefits, is hard for competitors to imitate, and can be
leveraged widely to many products and markets.Today, many organizations
recognize project management as one of their core competenciesand see their
ability to manage projects better as a way to achieve an edge overcompetitors
and deliver greater value to shareholders and customers.
3. A(n)
_____ is a temporary endeavor undertaken to create a unique product.
4. project
5. object
6. entity
7. portfolio
ANS: A
RATIONALE: A project is a temporary endeavor undertaken to
create a unique product, service, or result.Each project attempts to achieve
specific business objectives and issubject to certain constraints, such as
total cost and completion date.
4. The
total cost of a project and its completion date are examples of project _____.
5. tables
6. variables
7. templates
8. constraints
ANS: D
RATIONALE: A project is a temporary endeavor undertaken to
create a unique product, service, or result.Each project attempts to achieve
specific business objectives and issubject to certain constraints, such as
total cost and completion date.
5. The
scope of a project, quality, and user expectations are the _____ of a project.
6. inerts
7. variables
8. constraints
9. templates
ANS: B
RATIONALE: Five highly interrelated parameters define a
project—scope, cost, time, quality, and user expectations. If aproject team has
decided to allow scope changes during the project, then time and effort must be
allowed to assess how the scope change will affect the interrelated project
variables of cost, schedule, quality, and expectations.
6. Project
_____ is a key determinant of other project factors and must be carefully
defined.
7. cost
8. scope
9. quality
10. milestone
ANS: B
RATIONALE: Project scope is a definition of which tasks are and
which tasks are not included in aproject. Project scope is a key determinant of
the other project factors and must carefully be defined to ensure that a
project meets its essential objectives.
7. Which
of the following best describes project scope?
8. It
enables sound economic decisions about whether employees should be assigned to
project work or to operational activities.
9. It is
the degree to which aproject meets the needs of its users.
10. It
ensures that a project meets its essential objectives.
11. It
includes all the capital, expenses, and internal cross-charges associated with
aproject’s buildings, operation, maintenance, and support.
ANS: C
RATIONALE: Project scope is a definition of which tasks are and
which tasks are not included in a project. Project scope is a key determinant
of the other project factors and must carefully be defined to ensure that a
project meets its essential objectives.
8. Which
of the following variables includes the internal cross-charges associated with
aproject’s buildings, operation, maintenance, and support?
9. Cost
10. Time
11. Quality
12. Scope
ANS: A
RATIONALE: The cost of a project includes all the capital, expenses,
and internal cross-charges associated with aproject’s buildings, operation,
maintenance, and support.Capital is moneyspent to purchase assets that appear
on the organization’s balance sheet and are depreciatedover the life of the
asset.
9. _____
is the money spent to purchase assets that appear on anorganization’s balance
sheet and are depreciated over the life of the asset.
10. Proceeds
11. Capital
12. Liability
13. Cross-charge
ANS: B
RATIONALE: Capital is money spent to purchase assets that appear
on anorganization’s balance sheet and are depreciated over the life of the
asset. Capital items typically have a useful life of at least several years. A
building, office equipment, computer hardware, and network equipment are
examples of capital assets.
10. _____
items are nondepreciable items that are consumed shortly after they are
purchased.
11. Capital
12. Principal
13. Liable
14. Expense
ANS: D
RATIONALE: Expense items are nondepreciable items that are
consumed shortly after they are purchased. Typical expenses associated with an
information technology-related project include the use of outside labor or
consultants, travel, and training.
11. Travel-related
costs in an information technology-related project can be classified as _____.
12. capital
13. an
expense
14. a
cross-charge
15. revenue
ANS: B
RATIONALE: Expense items are nondepreciable items that are consumed shortly
after they are purchased. Typical expenses associated with an information
technology-related project include the use of outside labor or consultants,
travel, and training.
12. Which
of the following is true of cross-charging?
13. It
ensures that a project meets its essential objectives.
14. It
determines the degree to which aproject meets the needs of its users.
15. It
decides whether employees should be assigned to project work or to operational
activities.
16. It
determines whether a project can be completed in the stipulated time or not.
ANS: C
RATIONALE: The rationale behind cross-charging is to enable
sound economic decisions about whether employees should be assigned to project
work or to operational activities. If employees are assigned to a project,
cross-charging helps organizations determine which project makes the most
economic sense.
13. The
_____ business unit is the business unit most affected by the project and the
one whose budget will cover the project costs.
1. inheritor
2. express
3. sponsoring
4. receiving
ANS: C
RATIONALE: Many organizations use a system of internal
cross-charges to account for the cost ofemployees assigned to a project. For
example, the fully loaded cost (salary, benefits, andoverhead) of a manager
might be set at $120,000 per year. The sponsoring organization’sbudget is
cross-charged this amount for each manager who works full time on the
project.The sponsoring business unit is the business unit most affected by the
project and the one whose budget will cover the project costs.
14. _____
is defined as the degree to which aproject meets the needs of its users.
15. Cost
16. Quality
17. Time
18. Scope
ANS: B
RATIONALE: The quality of a project can be defined as the degree
to which the project meets the needs of its users. The quality of a project
that delivers an information technology (IT)-relatedsystem may be defined
interms of the system’s functionality, features, system outputs, performance,
reliability, andmaintainability.
15. The
_____ of a project that delivers an information technology-related system may
be defined in terms of the system’s functionality, features, system outputs,
performance, reliability, and maintainability.
16. time
17. scope
18. cost
19. quality
ANS: D
RATIONALE: The quality of a project can be defined as the degree
to which the project meets the needs of its users. The quality of a project
that delivers an information technology (IT)-related system may be defined in
terms of the system’s functionality, features, system outputs, performance,
reliability, and maintainability.
16. _____
is the application of knowledge, skills, and techniques to project activities
to meet project requirements.
17. Project
management
18. Project
pyramid
19. Project
literacy
20. Project
analysis
ANS: A
RATIONALE: Project management is the application of knowledge,
skills, and techniques to project activities to meet project
requirements.Project managers must deliver a solution thatmeets specific scope,
cost, time, and quality goals while managing the expectations of theproject
stakeholders.
17. Identify
the activity that involves high levels of creativity and freedom.
18. Analytic
19. Scientific
20. Annalistic
21. Artistic
ANS: D
RATIONALE:The essence of artistic activity is that it involves
high levels of creativity and freedom to do whatever the artist feels.The“art”
of project management involves salesmanship and psychology in convincingothers
of the need to change and that this project is right to do.
18. Phil,
an engineer, creates use case diagrams for his company. His work involves
following defined routines and exacting adherence to laws. Which of the
following activities corresponds to his work?
19. Annalistic
20. Scientific
21. Probabilistic
22. Artistic
ANS: B
RATIONALE: The essence of artistic activity is that it involves
high levels of creativity and freedom to do whatever the artist feels.
Scientific activity, on the other hand, involves following defined routines and
exacting adherence to laws.
19. Initiation,
scope planning, scope definition, scope verification, and scope change control
are the key activities of:
20. scope
engineering.
21. scope
networking.
22. scope
management.
23. scope
resolution.
ANS: C
RATIONALE: Scope management includes defining the work that must
be done as part of the project and then controlling the work to stay within the
agreed-upon scope. Key activities include initiation, scope planning, scope
definition, scope verification, and scope change control.
20. Identify
the technique that defines the scope of an information system by identifying
the business processes it will affect.
21. Functional
decomposition
22. Functional
accretion
23. Functional
aggregation
24. Functional
management
ANS: A
RATIONALE: Functional decomposition is a frequently used
technique to define the scope of an information system by identifying the
business processes it will affect. It breaks a complex task into several
simpler tasks.
21. A(n)
_____ is a set of logically related tasks performed to achieve a defined
outcome.
22. milestone
23. incident
24. objective
25. process
ANS: D
RATIONALE: A process is a set of logically related tasks
performed to achieve a defined outcome. A process is usually initiated in
response to a specific event and requires input, which it processes to create
output.
22. Identify
the naming convention used to define each process in a functional decomposition
chart.
23. Subject-object
24. Verb-subject
25. Noun-adjective
26. Adverb-adjective
ANS: B
RATIONALE: To create the functional decomposition chart, begin
with the name of the system and then identify the highest-level processes to be
performed. Each process should be given a two-word “verb-subject” name that
clearly defines the process.
23. _____
includes defining an achievable completion date that is acceptable to the
project stakeholders, developing a workable project schedule, and ensuring the
timely completion of the project.
24. Slack
time
25. Critical
time
26. Project
completion
27. Time
management
ANS: D
RATIONALE: Time management includes defining an achievable
completion date that is acceptable to the project stakeholders, developing a
workable project schedule, and ensuring the timely completion of the
project.Successful project time management requires identifying specifictasks
that project team members and/or other resources must complete.
24. Which
of the following identifies the project activities that must be completed, the
expected start and end dates, and what resources are assigned to each task?
25. Project
schedule
26. Project
milestone
27. Project
deadline
28. Slack
time
ANS: A
RATIONALE: A project schedule identifies the project activities
that must be completed, the expected start and end dates, and what resources
are assigned to each task. A project schedule is needed to complete a project
by a defined deadline, avoid rework, and ensure that people know what to do and
when to do it.
25. A
_____ is the critical date for completing a major part of aproject.
26. project
schedule
27. project
milestone
28. project
deadline
29. project
evaluation
ANS: B
RATIONALE: A project milestone is a critical date for completing
a major part of aproject. Major parts include program design, coding, testing,
and release (for a programming project).
26. A
_____ is the date anentire project should be completed and operational.
27. project
schedule
28. project
milestone
29. project
evaluation
30. project
deadline
ANS: D
RATIONALE: The project deadline is the date anentire project
should be completed and operational. It is the time when the organization can
expect to begin to reap the benefits of the project.
27. The
amount of time an activity can be delayed without delaying the entire project
is known as _____.
28. critical
time
29. slack
time
30. project
evaluation
31. project
milestone
ANS: B
RATIONALE: In a systems development project, each activity is
assigned an earliest start time andan earliest finish time. Each activity is
also allocated slack time, which is the amount oftime an activity can be
delayed without delaying the entire project.
28. Which
of the following best describes the critical path of a project?
29. It is
the date anentire project should be completed and operational—when the organization
can expect to begin to reap the benefits of the project.
30. It
identifies the project activities that must be completed, the expected start
and end dates, and what resources are assigned to each task.
31. It is
a critical date for completing a major part of aproject.
32. It
consists of all activities that, if delayed, would delay anentire project.
ANS: D
RATIONALE: The critical path of a project consists of all
activities that, if delayed, would delay the entire project. These activities
have zero slack time. Any problems with critical path activities will cause
problems for the entire project. To ensure that critical path activities are
completed on time, project managers use certain approaches and tools such as
GanttProject, Microsoft Project, ProjectLibre, or Webplanner to help compute
these critical project attributes.
29. Identify
the formal approach that creates three time estimates for an activity.
30. Program
Evaluation and Review Technique (PERT)
31. Work
breakdown structure (WBS)
32. Gantt
chart technique (GCT)
33. Grid
breakdown structure (GBS)
ANS: A
RATIONALE: A formalized approach called Program Evaluation and
Review Technique (PERT) creates three time estimates for an activity: shortest
possible time, most likely time, and longest possible time. A formula is then
applied to determine a single PERT time estimate.
30. _____
is a graphical tool used for planning, monitoring, and coordinating projects.
31. A
predecessor chart
32. A
work breakdown structure
33. A
Gantt chart
34. A
query chart
ANS: C
RATIONALE: A Gantt chart is a graphical tool used for planning,
monitoring, and coordinating projects; it is essentially a grid that lists
activities and deadlines. Each time a task is completed, a marker such as a
darkened line is placed in the proper grid cell to indicate the completion of a
task.
31. A(n)
_____ is an outline of the work to be done to complete the project.
32. attenuation
list
33. work
breakdown structure
34. organization
breakdown structure
35. cost
management chart
ANS: B
RATIONALE: The development of a work breakdown structure is a
critical activity needed for effective time management. A work breakdown
structure (WBS) is an outline of the work to be done to complete the project.
32. Development
of a(n) _____ leads to creation of a schedule and budget.
33. work
breakdown structure
34. organization
breakdown structure
35. Web
planner
36. Gantt
chart
ANS: A
RATIONALE: Development of a work breakdown structure leads to
creation of a schedule and budget. A work breakdown structure is an outline of
thework to be done to complete the project.
33. _____
ensures that aproject will meet the needs for which it was undertaken.
34. Quality
analysis
35. Quality
schedule
36. Quality
expatriation
37. Quality
management
ANS: D
RATIONALE: Quality management ensures that aproject will meet
the needs for which it was undertaken. This process involves quality planning,
quality assurance, and quality control.
34. Which
of the following processes determines the quality standards that are relevant
to a project?
35. Quality
assurance
36. Quality
planning
37. Quality
control
38. Quality
analysis
ANS: B
RATIONALE: Quality planning involves determining which quality
standards are relevant to aproject and determining how they will be met. It is
a process of quality management.
35. Which
of the following processes ensures that aproject meets the identified quality
standards?
36. Quality
testing
37. Quality
planning
38. Quality
assurance
39. Quality
forecast
ANS: C
RATIONALE: Quality assurance involves evaluating the progress of
aproject on an ongoing basis to ensure that it meets the identified quality
standards. It is a process of quality management.
36. Which
of the following best describes the quality control process?
37. Quality
control involves determining which quality standards are relevant to aproject
and determining how they will be met.
38. Quality
control involves evaluating the progress of aproject on an ongoing basis to
ensure that it meets the deadlines.
39. Quality
control includes developing and managing aproject budget.
40. Quality
control involves checking project results to ensure that they meet identified
quality standards.
ANS: D
RATIONALE: Quality control involves checking project results to
ensure that they meet identified quality standards. It is a process of quality
management.
37. Which
of the following is true of human resource management?
38. It
includes organizational planning, staff acquisition, and team development.
39. It
includes communications planning, information distribution, performance
reporting, and managing communications to meet the needs of project
shareholders.
40. It
involves acquiring goods and/or services for aproject from sources outside the
performing organization.
41. It
requires the coordination of all appropriate people, resources, plans, and
efforts to complete a project successfully.
ANS: A
RATIONALE: Human resource management is about making the most
effective use of the people involved with aproject. It includes organizational
planning, staff acquisition, and team development.
38. Identify
the stage in the forming-storming-norming-performing model in which ateam meets
to learn about aproject, agrees on basic goals, and begins to work on project
tasks.
39. Storming
40. Norming
41. Forming
42. Performing
ANS: C
RATIONALE: During the forming stage, ateam meets to learn about
aproject, agrees on basic goals, and begins to work on project tasks.Team
members are on their best behavior andtry to be pleasant to one another while
avoiding any conflict or disagreement.
39. A
software development team of programmers discusses the differences of opinion
among itsteam members. In the context of the forming-storming-
norming-performing model, they are in the:
40. norming
stage.
41. storming
stage.
42. forming
stage.
43. performing
stage.
ANS: B
RATIONALE: Ateam has moved into the storming stage when it recognizes
that differences of opinion exist among team members and allows these ideas to
compete for consideration. In this stage, the team might argue and struggle, so
it can be anunpleasant time for everyone.
40. Which
of the following best describes the norming stage?
41. It
allows every individual team member to give up his or herpreconceived judgments
and opinions.
42. It
recognizes that differences of opinion exist among team members and allows
these ideas to compete for consideration.
43. Ateam
meets to learn about aproject, agrees on basic goals, and begins to work on
project tasks.
44. Team
members have become interdependent on one another and have developed an
effective decision-making process that does not require the project manager.
ANS: A
RATIONALE: If ateam survives the storming stage, it may enter
the norming stage. During this stage, individual team members give up their
preconceived judgments and opinions. Members who felt a need to take control of
the team give up this impulse. Team members adjust their behavior toward one
another and begin to trust one another.
41. Team
members adjust their behavior toward one another and begin to trust one another
in the _____ stage.
42. forming
43. storming
44. norming
45. performing
ANS: C
RATIONALE: If ateam survives the storming stage, it may enter
the norming stage. During this stage, individual team members give up their
preconceived judgments and opinions. Members who felt a need to take control of
the team give up this impulse. Team members adjust their behavior toward one
another and begin to trust one another.
42. A
design team led by John Dave is highly motivated and knowledgeable about all
aspects of the project. After a series of tests, it is proved that the team
members are capable of completing the project without the guidance of their
manager. John’s team is in the:
43. norming
stage.
44. storming
stage.
45. forming
stage.
46. performing
stage.
ANS: D
RATIONALE: Some teams advance beyond the norming stage into the
performing stage. At this point, the team is performing at a high level. Team
members are competent, highly motivated, and knowledgeable about all aspects of
the project. They have become interdependent on one another and have developed
an effective decision-making process that does not require the project manager.
Dissent is expected, and the team has developed an effective process to ensure
that everyone’s ideas and opinions are heard. Work is done quickly and with
high quality.
43. A
_____ consists of senior managers representing the business and information
technology organizations—to provide guidance and support to the project.
44. quality
control team
45. project
steering team
46. scope
management team
47. project
development team
ANS: B
RATIONALE: In addition to the development team, each project
should have a project steering team, made up of senior managers representing
the business and information technology organizations— to provide guidance and
support to the project. The number of members on the steering team should be
limited (three to five) to simplify the decision-making process and ease the
effort to schedule a quorum of these busy executives.
44. Which
of the following members of a project steering team removes barriers to the
project success?
45. A
project sponsor
46. A
subject matter expert
47. A
project champion
48. A
technical resource
ANS: C
RATIONALE: The project champion is a well-respected manager with
a passion to see aproject succeed and removes barriers to the project success.
He or she is a key member of the steering team.
45. Which
of the following best describes the role of a project sponsor?
46. He or
she ensures that aproject will meet the needs of his or her organization.
47. He or
she has a passion to see aproject succeed and removes barriers to the project
success.
48. He or
she provides knowledge and expertise in a particular aspect important to
aproject.
49. He or
she ensures proper technology staffing for aproject.
ANS: A
RATIONALE: A project sponsor is a senior manager from the
business unit most affected by aproject. He or she ensures that the project will
meet the needs of his or her organization.
46. Who
provides knowledge and proficiency in a particular aspect important to a
project?
47. Asoftware
sponsor
48. A
project reviewer
49. A
project champion
50. A
subject matter expert
ANS: D
RATIONALE:A subject matter expert is someone who provides
knowledge and expertise in a particular aspect important to the project. For
example, an accounting system project may seek advice from a member of the
internal auditing group in defining the mandatory control features of a new
system.
47. Who
adds value to a project with his subject matter expertise in an information
technology topic?
48. A
project sponsor
49. A
technical resource
50. A
project champion
51. A
software sponsor
ANS: B
RATIONALE: A technical resource is essentially a subject matter
expert in an information technology (IT) topic of value to a project. For
example, the accounting system project may seek advice from a database
management system guru (either inside or outside the company) to minimize the
processing time for certain key business transactions.
48. _____
involves the generation, collection, dissemination, and storage of project
information in a timely and effective manner.
49. Communications
management
50. Human
resource management
51. Cost
management
52. Scope
management
ANS: A
RATIONALE: Communications management involves the generation,
collection, dissemination, and storage of project information in a timely and
effective manner. It includes communications planning, information
distribution, performance reporting, and managing communications to meet the
needs of project shareholders.
49. _____
risks cannot be managed directly.
50. Exposure
51. Unknown
52. Unsystematic
53. Model
ANS: B
RATIONALE: Unknown risks cannot be managed directly; however, an
experienced project manager will build some contingency into the project budget
and schedule to allow for their occurrence.While inexperienced project managers
realize that things may go wrong, they fail toidentify and address known risks
and do not build in contingencies for unknown risks.
50. Who is
responsible for developing a risk management strategy?
51. A
risk reviewer
52. A
technical resource
53. A
project champion
54. A
risk owner
ANS: D
RATIONALE: Risks with a high probability of occurrence and a
high potentialimpact need to have a risk owner assigned. The risk owner is
responsible for developing a risk management strategy and monitoring the
project to determine if the risk is about to occur or has occurred.
51. Which
of the following is true of risk management software?
52. It
can provide more realistic estimates for project milestones and budgets.
53. It
can provide more realistic estimates for slack time and budgets.
54. It
can provide more realistic estimates for project schedules and budgets.
55. It
can provide more realistic estimates for a work breakdown structure.
ANS: A
RATIONALE: Risk management software—such as Risk Management from
Intelex, Full Monte from Barbecana, and @Risk from Intaver Institute—integrates
with project scheduling software and can reflect the potential impact of
various risks on the project schedule and cost. Use of such software can lead
to more realistic estimates for project milestones and budgets.
52. Which
of the following project management knowledge areas is responsible for
acquiring goods and services for the project from sources outside the
performing organization?
53. Scope
management
54. Communications
management
55. Risk
management
56. Procurement
management
ANS: D
RATIONALE: Procurement management involves acquiring goods
and/or services for the project from sources outside the performing organization.
This activity is divided into five processes.
53. Which
of the following statements best describes the plan contracting process of
procurement management?
54. It
obtains bids, information, proposals, or quotations from potential providers.
55. It
documents requirements for products and services and identifies potential
providers.
56. It
determines what is needed and when.
57. It
reviews the offers and starts the negotiations with the preferred provider.
ANS: B
RATIONALE: Plan contracting process documents requirements for
products and services. This process also identifies potential providers.
54. Identify
the process in procurement management that determines the requirements for a
project.
55. Plan
contracting
56. Contract
administration
57. Plan
purchase and acquisition
58. Request
seller responses
ANS: C
RATIONALE: Plan purchase and acquisition process determines what
is needed and when.The make-or-buy decision is a key decision made during the
plan purchase andacquisition process.
55. Which
of the following statements best describes the request seller response process
of procurement management?
56. It
obtains bids, information, proposals, or quotations from potential providers.
57. It
documents requirements for products and services and identifies potential
providers.
58. It
manages the relationship between the buyer and the seller.
59. It
reviews the offers from and starts the negotiations with the preferred seller.
ANS: A
RATIONALE: The request seller response process obtains bids,
information, proposals, or quotations from potential providers.
56. In
the context of procurement management, identify the process that reviews the
offers from sellers and identifies the provider.
57. Request
seller response
58. Plan
contracting
59. Contract
closure
60. Select
seller
ANS: D
RATIONALE: During the select seller process, offers from sellers
are reviewed, and the preferred provider is identified.Negotiations are started
in this process.
57. Carlton
has ordered a digital watch from an e-commerce Web site. He wants to track the
shipment details to estimate the delivery of the product. In the context of
procurement management, identify the process that helps Carlton to track his
watch shipped by the provider.
58. Plan
purchase and acquisition
59. Plan
contracting
60. Contract
administration
61. Contract
closure
ANS: C
RATIONALE: The contract administration process manages all
aspects of the contract and the relationship between the buyer and the
provider. The process includes tracking and documenting the provider’s
performance, managing contract changes, and taking any necessary corrective
actions.
58. Which
of the following decisions involves comparing the benefits and drawbacks of
in-house production versus outsourcing of a given product or service?
59. Break-or-make
decision
60. Make-or-sell
decision
61. Break-or-buy
decision
62. Make-or-buy
decision
ANS: D
RATIONALE: The make-or-buy decision is a key decision made
during the plan purchase andacquisition process.The make-or-buy decision
involves comparing the pros and cons of in-house production versus outsourcing
of a given product or service.
59. A(n)
_____ is a legally binding agreement that defines the terms and conditions of
the buyer–provider relationship.
60. contract
61. milestone
62. expatiate
63. strategy
ANS: A
RATIONALE: A contract is a legally binding agreement that
defines the terms and conditions of the buyer–provider relationship. This
includes who is authorized to do what, who holds what responsibilities, costs
and terms of payment, remedies in case of breach of contract, and the process
for revising the contract.
60. AtelcoInc.,
a hardware firm, orders 50 laptops with the same configuration. In the context
of contract categories, this scenario is an example of a:
61. cost-plus-fee
contract.
62. cost-plus-percentage
contract.
63. fixed-price
contract.
64. time
and material contract.
ANS: C
RATIONALE: In afixed-price contract, the buyer and provider
agree to a total fixed price for a well-defined product or service. For
example, the purchase of a large number of laptop computers with specified
capabilities and features frequently involves a fixed-price contract.
61. Which
of the following is the type of contract that pays the provider an amount that
covers the provider’s actual costs plus an additional amount?
62. Material
contract
63. Cost-reimbursable
contract
64. Fixed-price
contract
65. Time
contract
ANS: B
RATIONALE: Cost-reimbursable contract requires paying the
provider an amount that covers the provider’s actual costs plus an additional
amount or percentage for profit.Three common types of
cost-reimbursablecontracts exist. They are cost-plus-fee contract,
cost-plus-fixed-fee contract, and cost-plus-incentive-fee contract.
62. John,
a civil engineer, pays the heavy equipment provider an agreed-upon hourly rate
and unit price for the various materials to be used. In the context of contract
categories, this scenario is an example of a:
63. cost-plus-fee
contract.
64. cost-plus-percentage
contract.
65. fixed-price
contract.
66. time
and material contract.
ANS: D
RATIONALE: In atime and material contract, the buyer pays the
provider for both the time and materials required to complete the contract. The
contract includes an agreed-upon hourly rate and unit price for the various
materials to be used.
63. Identify
the knowledge area that requires the assimilation of eight other project
management knowledge areas.
64. Project
integration management
65. Procurement
management
66. Human
resource management
67. Communications
integration management
ANS: A
RATIONALE: Project integration management is perhaps the most
important knowledge area because it requires the assimilation of all eight
other project management knowledge areas.Projectintegration management requires
the coordination of all appropriate people, resources,plans, and efforts to
complete a project successfully.
64. _____
requires the coordination of all appropriate people, resources, plans, and
efforts to complete a project successfully.
65. Communications
management
66. Procurement
management
67. Human
resource management
68. Project
integration management
ANS: D
RATIONALE: Project integration management is perhaps the most
important knowledge area because it requires the assimilation of all eight
other project management knowledge areas. Project integration management
requires the coordination of all appropriate people, resources, plans, and
efforts to complete a project successfully.
65. In
the context of project integration management, which of the following best
describes the process of monitoring and controlling a project?
66. This
process develops a project charter that formally recognizes the existence of
the project, outlines the project objectives and how they will be met, lists
key assumptions, and identifies major roles and responsibilities.
67. This
process requires regularly measuring effort and expenditures against the
project tasks, recognizing when significant deviations occur from the schedule
or budget, and taking corrective action to regain alignment with the plan.
68. This
process develops a preliminary project scope statement to define and gain
consensus about the work to be done.
69. This
process closes a project successfully by gaining stakeholder and customer
acceptance of the final product.
ANS: B
RATIONALE: Monitoring and controlling the project work regularly
measures the effort and expenditures against the project tasks, recognizing
when significant deviations occur from the schedule or budget. It also takes
corrective actions to regain alignment with the plan.
TRUE/FALSE:
1. Projects
are repetitive activities that are performed over and over again.
ANS: False
RATIONALE: Projects are different from operational activities,
which are repetitive activities performed over and over again. Projects are not
repetitive; they come to a definite end once the project objectives are met or
the project is cancelled.
2. It is
easier to meet the quality and stakeholder expectations if the project has a
large scope.
ANS: False
RATIONALE: In general, the larger the scope of the project, the
more difficult it is to meet cost, schedule, quality, and stakeholder
expectations.
3. Cross-charges
in an information technology-related project include the use of outside labor,
travel, and training.
ANS: False
RATIONALE: Expense items are nondepreciable items that are
consumed shortly after they are purchased. Typical expenses associated with an
IT-related project include the use of outside labor or consultants, travel, and
training.
4. Project
management uses repeatable processes and techniques to achieve project goals.
ANS: True
RATIONALE: Project management is also part science because it
uses time-proven, repeatable processes and techniques to achieve project goals.
5. A
functional decomposition chart begins with identifying the lower-level
subprocesses.
ANS: False
RATIONALE: To create the functional decomposition chart, begin
with the name of the system and then identify the highest-level processes to be
performed.
6. Tasks
excluded from the work breakdown structure are within the scope of the project.
ANS: False
RATIONALE: Development of a work breakdown structure (WBS) is
another approach to defining the scope of a project—work not included in the
WBS is outside the scope of the project.
7. The
human resources manager ensures that a project uses approved technologies and
vendors.
ANS: False
RATIONALE: The information technology (IT) manager ensures
proper IT staffing for the project and ensures the project uses approved
technology and vendors.
8. In
creating a new information technology (IT) related system that includes the
acquisition of new computing and/or networking hardware, the hardware takes
longer than expected to arrive at the installation site. In the context of risk
management, this is an example of an unknown risk.
ANS: False
RATIONALE: Known risks are risks that can be identified and
analyzed. For example, in creating a new IT-related system that includes the
acquisition of new computing and/or networking hardware, a known risk might be
that the hardware will take longer than expected to arrive at the installation
site. If the hardware is delayed by several weeks, it could have a negative
effect on the project completion date.
9. The
make-or-buy decision compares the advantages and disadvantages of in-house
production versus outsourcing of a given product or service.
ANS: True
RATIONALE: The make-or-buy decision is a key decision made
during the plan purchase and acquisition process. The make-or-buy decision
involves comparing the pros and cons of in-house production versus outsourcing
of a given product or service.
10. Project
integration management requires the assimilation of all eight other project
management knowledge areas.
ANS: True
RATIONALE: Project integration management is perhaps the most
important knowledge area because it requires the assimilation of all eight
other project management knowledge areas.
ESSAY:
1. Briefly
explain the parameters that define a project.
ANS: Five highly interrelated parameters define a project—scope,
cost, time, quality, and user expectations. Project scope is a definition of
which tasks are and which tasks are not included in a project. The cost of a
project includes all the capital, expenses, and internal cross-charges
associated with the project’s buildings, operation, maintenance, and support.
The timing of a project is frequently a critical constraint. Often, projects
must be completed by a certain date to meet an important business goal or a
government mandate. The quality of a project can be defined as the degree to
which the project meets the needs of its users. As a project begins,
stakeholders will form expectations—or will already have expectations— about
how the project will be conducted and how it will affect them. For example,
based on previous project experience, the end users of a new IT system may
expect that they will have no involvement with the system until it is time for
them to be trained.
2. Brief
the steps involved in the creation of a functional decomposition chart.
ANS: Functional decomposition is a frequently used technique to
define the scope of an information system by identifying the business processes
it will affect. To create the functional decomposition chart, begin with the
name of the system and then identify the highest-level processes to be
performed. Each process should be given a two-word “verb-subject” name that
clearly defines the process. Next, break those high-level processes down into
lower-level subprocesses. Typically, three or four levels of decomposition are
sufficient to define the scope of the system.
3. Define
the objective of quality management. Explain the various processes involved in
it.
ANS: Quality management ensures that the project will meet the
needs for which it was undertaken. This process involves quality planning,
quality assurance, and quality control. Quality planning involves determining
which quality standards are relevant to the project and determining how they
will be met. Quality assurance involves evaluating the progress of the project
on an ongoing basis to ensure that it meets the identified quality standards.
Quality control involves checking project results to ensure that they meet
identified quality standards.
4. How
is a subject matter expert different from a technical resource in the project
steering team? Explain with an example.
ANS: A subject matter expert is someone who provides knowledge
and expertise in a particular aspect important to the project. For example, an
accounting system project may seek advice from a member of the internal
auditing group in defining the mandatory control features of a new system. A
technical resource is essentially a subject matter expert in an information
technology topic of value to the project. For example, the accounting system
project may seek advice from a database management system guru (either inside
or outside the company) to minimize the processing time for certain key
business transactions.
CHAPTER 4—BUSINESS PROCESS AND IT OUTSOURCING
MULTIPLE CHOICE
1. _____
is an arrangement in which one company contracts with another organization to
provide services that could be provided by company employees.
2. Outsourcing
3. Scaling
4. Marketing
5. Manufacturing
ANS: A
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. When the people doing the work are located in another
country, the arrangement is called offshore outsourcing.
2. Which
of the following organizations outsources its work?
3. Lenc
Inc. is a chain of storesthat sells home appliances and is spread across the
United States. Goods not available in one of its stores can be procured from
its other stores.
4. Zeta
Inc. supplies raw materials to Clips&Hangers, a soap and detergent
manufacturing organization.
5. Lusach
Dineentered into a two-year contract with Soy&Cream for procuring its dairy
products.
6. Ace
Healthcare entered into a five-year contract with Masters Inc. to take care of
Ace Healthcare’s recruiting process and insurance policies.
ANS: D
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. Ace Healthcare entered into a five-year contract with
Masters Inc. Masters Inc. takes care of the recruiting process and insurance
policies for Ace Healthcare. Therefore, Ace healthcare has outsourced its
insurance policy process and recruiting process to Masters Inc.
3. Bersk,
a brewing company, entered into a three-year contract with Seins Inc.According
to the contract, Seins Inc. will package and market the beverages produced by
Bersk. This is an example of _____.
4. liquidating
5. outsourcing
6. amalgamating
7. conglomerating
ANS: B
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. In this case, Bersk outsourced the packaging and
marketing of its beverages to Seins Inc.
4. When
the people of an organization doing the work for another organization are
located in another country, the arrangement is called _____.
5. horizontal
integration
6. business
unit sponsoring
7. offshore
outsourcing
8. functional
decomposition
ANS: C
RATIONALE: Outsourcing is an arrangement in which one company
contracts with another organization to provide services that could be provided
by company employees. When the people of an organization doing the work are
located in another country, the arrangement is called offshore outsourcing.
5. Many
organizations contract with service providers to handle their complete services
such as accounting and finance, customer services, human resources, andresearch
and development. This is known as _____.
6. vertical
integration
7. business
process outsourcing
8. outbound
telemarketing process
9. horizontal
integration
ANS: B
RATIONALE: Outsourcing takes many forms and is by no means
limited to information technology outsourcing (ITO). Many organizations
contract with service providers to handle complete business processes such as
accounting and finance, customer services, human resources, and even research
and development, in what is called business process outsourcing (BPO).
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