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Jesse-s CMQ-OE (1).
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Exam of 23 pages for the course ASQ Glossary at ASQ Glossary (Jesse-s CMQ-OE (1).)
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Jesse's CMQ-OEIn selecting among different projects, the time value of money is considered for which of the
following reasons?
I. To perform a cost-benefit analysis
II. To prioritize investments
III. To predict cash flow
IV. To reduce operating costs
a) I, II, and III only
b) I, II, III, and IV
c) III and IV only
d) I and II only - ANS-(D) The time value of money is considered to perform a cost-benefit
analysis and prioritize investments.
Q. The best tool for discovering relationships between two groups of ideas is a:
I. Force field analysis
II. Matrix diagram
III. Prioritization matrix
IV. Process Decision Program Chart (PDPC) - ANS-(II) A matrix diagram will effectively uncover
relationships between two groups of ideas
Which of the following is the biggest problem in cost-benefit analysis?
I. It is easier to accurately estimate benefits than costs.
II. It is easier to accurately estimate costs than benefits.
III. It is an elaborate tool requiring extensive computer support.
IV. It is too difficult to compute the time value of money. - ANS-(II) It is easier to accurately
estimate costs than benefits
Q. Which of the following is the definition for Internal Rate of Return (IRR)?
I. A discounted cash flow technique for finding the present value of each future year's cash flow
,II. What remains from all money taken in after all expenses are paid
III. The discount rate that causes net present value to equal zero
IV. The amount of money earned as a result of completing a project, selling a product, or
providing a service - ANS-(III) The discount rate that causes NPV to equal zero
Given the following budget, calculate the actual variance for the entire budget.
Advertising Expenses 2007 Budgeted 2007 Actual
Yellow Pages $100.00 $175.00
Radio $750.00 $950.00
Television $500.00 $500.00
Internet $2,500.00 $2,600.00
Direct Mailing $50.00 $25.00
Annual Open House $100.00 $535.00
Total Advertising Expenses $4,000.00 $4,785.00
I. 0.1963
II. -0.1963
III. 1.1963
IV. 0.8359 - ANS-(I) (4785-4000)/4000
Note: A negative variance means the budget was under spent. In this instance,
more money was spent than was budgeted. (4785-4000)/4000
Q. Work breakdown structure means which of the following:
I. The project plan has failed due to a lack of support by upper management.
II. An autopsy of successfully completed projects has been completed.
III. The statement of work has been divided into the detailed listing of required activities.
IV. The resources required for a project have not been provided. - ANS-(III) A work breakdown
structure (WBS) is a project management technique by which a project is divided into tasks,
subtasks, and units of work to be performed.
Q. Which of the following are true of the critical path of a project?
I. The project is important
II. Events on the critical path have no slack time
, III. Delays of events on the critical path delay the project
IV. Slack times can be added to the events on the critical path without delaying the project.
a) I and IV only
b) II and III only
c) I and III only
d) II and IV only - ANS-(b) The critical path refers to the sequence of tasks that take the longest
time and determines the project's completion date.
Which of the following statements are true for a Gantt Chart?
I. The charts are easy to understand
II. Each bar usually represents a single activity
III. The details of activities are easily displayed
IV. The estimates of optimistic, most likely, and pessimistic times are all included
a) I and II only
b) III and IV only
c) I and III only
d) II and IV only - ANS-(a) A Gantt chart is a type of bar chart used in process/project planning
and control to display planned work and finished work in relation to time. A a project progresses,
the chart will be amended to display milestones, bars representing actual times elapsed, with
other symbols to indicate project status. Note that IV is true for PERT charts not Gantt charts.
Q. The best tool for tracking the progress of critical project activities is a:
I. PERT chart
II. Project charter
III. Critical Path Method
IV. Gantt chart - ANS-(IV) A Gantt chart is very effective at showing key project tasks and
progress toward project completion.
Q. The best tool for understanding project enablers and obstacles is:
I. Force field analysis
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