Preparing for the Project Management Professional Certification Exam_14 ppt

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388 Glossary
The critical path is usually defined as those activities with float less than
or equal to a specified value, often zero.
Current finish date. The current estimate of the point in time when an
activity will be completed.
Current start date. The current estimate of the point in time when an
activity will begin.
CV. Cost Variance. The difference between the EV and the AC.
DD. Data Date. The point in time that separates actual data from future
data. Also called the as-of-date.
Definitive estimate. An assessment of the likely quantitative result. Usu-
ally applied to project costs and durations and should always include
some indication of accuracy (e.g., עx percent). Usually used with a
modifier (e.g., preliminary, conceptual, feasibility). Some application
areas have specific modifiers that imply particular accuracy ranges (e.g.,
order-of-magnitude estimate, budget estimate, and definitive estimate
in engineering and construction projects).
Deliverable. Any measurable, tangible, verifiable outcome, result, or item
that must be produced to complete a project or part of a project. Often
used more narrowly in reference to an external deliverable, which is a
deliverable that is subject to approval by the project sponsor or cus-
tomer.
Dependencies. In a project, the relationships between tasks. For example,
a task may not begin until another task is complete.
DU. Duration. The number of work periods (not including holidays or
other nonworking periods) required to complete an activity or other
project element. Usually expressed as workdays or work weeks. Some-
times incorrectly equated with elapsed time. Should not be confused
with effort.
Dummy activity. An activity with zero duration used to show a logical

relationship in the arrow diagramming method. Dummy activities are
used when logical relationships cannot be completely or correctly de-
scribed with regular activity arrows. Dummies are shown graphically as
a broken line headed by an arrow.
Duration compression. Shortening the project schedule without reducing
the project scope. Duration compression is not always possible and
often requires an increase in project cost.
EAC. Estimate At Completion. The expected total cost of an activity, a
group of activities, or the project when the defined scope of work has
been completed. Most techniques for forecasting EAC include some
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Glossary 389
adjustment of the original cost estimate based on project performance
to date. Often shown as: EAC
ס Actuals-to-date ם ETC.
Earned value analysis. A method for measuring project performance. It
compares the amount of work that was planned with what was actually
accomplished to determine if cost and schedule performance is as
planned.
EF. Early Finish date. In the critical path method, the earliest possible
point in time on which the uncompleted portions of an activity (or
the project) can finish based on the network logic and any schedule
constraints. Early finish dates can change as the project progresses and
changes are made to the project plan.
Effort. The number of labor units necessary to complete an activity or
other project element. Effort is usually expressed in hours, days, or
weeks and should not be confused with duration.
ES. Early Start date. In the critical path method, the earliest possible point
in time on which an activity (or the project) can finish based on the
network logic and any schedule constraints. Early start dates can change

as the project progresses and changes are made to the project plan.
Estimate. An assessment of the likely quantitative result. Usually applied
to project costs and durations and should always include some indica-
tion of accuracy (e.g., עx percent). Usually used with a modifier (e.g.,
preliminary, conceptual, feasibility). Some application areas have spe-
cific modifiers that imply particular accuracy ranges (e.g., order-of-mag-
nitude estimate, budget estimate, and definitive estimate in engineering
and construction projects).
ETC. Estimate (or estimated) To Complete (or completion). The expected
additional cost needed to complete an activity, a group of activities, or
the project. Most techniques for forecasting ETC include some adjust-
ment to the original estimate based on project performance to date.
EV. Earned Value. A method for measuring project performance. It com-
pares the amount of work that was planned with what was actually
accomplished to determine if cost and schedule performance are as
planned.
Event-on-node. A network diagramming technique in which events are
represented by boxes (or nodes) connected by arrows to show the se-
quence in which the events are to occur.
Exception report. Document that includes only major variations from
plan (rather than all variations).
Expected monetary value. The product of an event’s probability of occur-
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390 Glossary
rence and the gain or loss that will result. For example, if there is a 50
percent probability that it will rain, and rain will result in a $100 loss,
the expected monetary value of the rain event is $50 (.5
ן $100).
Fast tracking. Compressing the project schedule by overlapping activities
that would normally be done in sequence, such as design and construc-

tion.
FF. (1) Free Float. The amount of time an activity can be delayed without
delaying the early start of any immediately following activities. (2) Fin-
ish-to-Finish. A dependency between two activities, where one activity
must finish before the other activity can finish.
FFP. Firm Fixed Price contract. A type of contract where the buyer pays
the seller a set amount (defined by the contract) regardless of the seller’s
cost.
Finish date. A point in time associated with an activity’s completion. Usu-
ally qualified by one of the following: actual, planned, estimated, sched-
uled, early, late, baseline, target, or current.
Fixed price contract. A type of contract where the buyer pays the seller a
set amount (defined by the contract) regardless of the seller’s cost.
Float. The amount of time that an activity may be delayed from its early
start without delaying the project finish date. Float is a mathematical
calculation and can change as the project progresses and changes are
made to the project plan. Also called slack.
Forecast final cost. The expected total cost of an activity, a group of activi-
ties, or the project when the defined scope of work has been completed.
Same as Estimate At Completion (EAC). Most techniques for forecast-
ing final cost include some adjustment of the original cost estimate
based on project performance to date. Often shown as EAC
ס Actuals-
to-date
ם ETC.
Forward pass. The calculation of the early start and early finish dates for
the uncompleted portions of all network activities.
FPIF. Fixed Price Incentive Fee contract. A type of contract where the
buyer pays the seller a set amount (defined by the contract), and the
seller can earn an additional amount if the seller meets defined perform-

ance criteria.
FS. Finish-to-Start. The dependency between two activities where one ac-
tivity must finish before the other activity can start.
Functional manager. A manager responsible for activities in a specialized
department or function (e.g., engineering, manufacturing, marketing).
Functional organization. An organization structure in which staff are
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Glossary 391
grouped hierarchically by specialty (e.g., production, marketing, engi-
neering, and accounting at the top level, with engineering, further di-
vided into mechanical, electrical, and others).
Gantt chart. A graphic display of schedule-related information. In the typ-
ical bar chart, activities of other project elements are listed down the
left side of the chart, dates are shown across the top, and activity dura-
tions are shown as date-placed horizontal bars.
GERT. Graphical Evaluation and Review Technique. A network analysis
technique that allows for conditional and probabilistic treatment of
logical relationships (i.e., some activities may not be performed).
Grade. A category or rank used to distinguish items that have the same
functional use (e.g., ‘‘hammer’’) but do not share the same require-
ments for quality (e.g., different hammers may need to withstand dif-
ferent amounts of force).
Hammock. An aggregate or summary activity (a group of related activities
is shown as one and reported at a summary level). A hammock may or
may not have an internal sequence.
Hanger. An unintended break in a network path. Hangers are usually
caused by missing activities or missing logical relationships.
IFB. Invitation For Bid. Generally, this term is equivalent to request for
proposal. However, in some application areas it may have a narrower
or more specific meaning.

Information distribution. Making needed information available to proj-
ect stakeholders in a timely manner.
Initiation. Committing the organization to begin a project phase.
Integrated cost/schedule reporting. A method for measuring project per-
formance. It compares the amount of work that was planned with what
was actually accomplished to determine if cost and schedule perform-
ance is as planned.
Key event schedule. A summary-level schedule that identifies the major
activities and key milestones.
Lag. A modification of a logical relationship that directs a delay in the
successor task. For example, in a finish-to-start dependency with a ten-
day lag, the successor activity cannot start until ten days after the prede-
cessor has finished.
Lead. A modification of a logical relationship that allows an acceleration
of the successor task. For example, in a finish-to-start dependency with
a ten-day lead, the successor activity can start ten days before the prede-
cessor has finished.
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392 Glossary
Leveling. Any form of network analysis in which scheduling decisions
(start and finish dates) are driven by resource management concerns
(e.g., limited resource availability or difficult-to-manage changes in re-
source levels).
LF. Late Finish date. In the critical path method, the latest possible point
in time that an activity may begin without delaying a specified mile-
stone (usually the project finish date).
Life cycle costing. The concept of including acquisition, operating, and
disposal costs when evaluating various alternatives.
Line manager. (1) The manager of any group that actually makes a prod-
uct or performs a service. (2) A functional manager.
Link. A dependency between two project activities or between a project
activity and a milestone.
LOE. Level Of Effort. Support-type activity (e.g., vendor or customer liai-

son) that does not readily lend itself to measurement of discrete accom-
plishment. It is generally characterized by a uniform rate of activity
over a specific period of time.
Logic. The collection of activity dependencies that make up a project net-
work diagram.
Logic diagram. Any schematic display of the logical relationships of proj-
ect activities. Always drawn from left to right to reflect project chronol-
ogy. Often incorrectly referred to as a ‘‘PERT chart.’’
Logical relationship. A dependency between two project activities, or be-
tween a project activity and a milestone.
Loop. A network path that passes the same node twice. Loops cannot be
analyzed using traditional network analysis techniques such as CPM
and PERT. Loops are allowed in GERT.
LS. Late State date. In the critical path method, the latest possible point in
time that an activity may begin without delaying a specified milestone
(usually a project finish date).
Management reserve. A separately planned quantity used to allow for fu-
ture situations that are impossible to predict (sometimes called ‘‘known
unknowns’’). Management reserves may involve cost or schedule. Man-
agement reserves are intended to reduce the risk of missing cost or
schedule objectives. Use of management reserve requires a change to
the project’s cost baseline.
Master schedule. A summary-level schedule that identifies the major ac-
tivities and key milestones.
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Glossary 393
Mathematical analysis. The process of identifying early and late start and
finish dates for the uncompleted portions of project activities.
Matrix organization. Any organizational structure in which the project
manager shares responsibility with the functional managers for assign-

ing priorities and for directing the work of individuals assigned to the
project.
Milestone. A significant event in the project, usually completion of a
major deliverable.
Milestone schedule. A summary-level schedule that identifies the major
milestones.
Mitigation. Taking steps to lessen risk by lowering the probability of a risk
event’s occurrence or reducing its effect should it occur.
Monitoring. The capture, analysis, and reporting of project performance,
usually as compared to plan.
Monte Carlo analysis. A schedule risk assessment technique that performs
a project simulation many times in order to calculate a distribution of
likely results.
MPM. Modern Project Management. A term used to distinguish the cur-
rent broad range of project management (scope, cost, time, quality,
risk, etc.) from narrower, traditional use that focused on cost and time.
Near-critical activity. An activity that has low total float.
Network. Any schematic display of the logical relationships of project ac-
tivities. Always drawn from left to right to reflect project chronology.
Often incorrectly referred to as a ‘‘PERT chart.’’
Network analysis. The process of identifying early and late start and finish
dates for the uncompleted portions of project activities.
Network logic. The collection of activity dependencies that make up a
project network diagram.
Network path. Any continuous series of connected activities in a project
network diagram.
Node. One of the determining points of a network; a junction point
joined to some or all of the other dependency lines.
OBS. Organizational Breakdown Structure. A depiction of the project or-
ganization arranged so as to relate work packages to organizational

units.
Order of magnitude estimate. An assessment of the likely quantitative
result. Usually applied to project costs and durations and should always
include some indication of accuracy (e.g.,
ע x percent). Usually used
with a modifier (e.g., preliminary, conceptual, feasibility). Some appli-
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394 Glossary
cation areas have specific modifiers that imply particular accuracy
ranges (e.g., order-of-magnitude estimate, budget estimate, and defini-
tive estimate in engineering and construction projects).
Organizational planning. Identifying, documenting, and assigning proj-
ect roles, responsibilities, and reporting relationships.
Overall change control. A process for coordinating changes across the
entire project.
Overlap. A modification of a logical relationship that allows an accelera-
tion of the successor task. For example, in a finish-to-start dependency
with a ten-day lead, the successor activity can start ten days before the
predecessor has finished.
Parametric estimating. An estimating technique that uses a statistical rela-
tionship between historical data and other variables (e.g., square footage
in construction, lines of code in software development) to calculate an
estimate.
Pareto diagram. A histogram, ordered by frequency of occurrence, that
shows how many results were generated by each identified cause.
Path. A set of sequentially connected activities in a project network dia-
gram.
Path convergence. In mathematical analysis, the tendency of parallel
paths of approximately equal duration to delay the completion of the
milestone where they meet.

PC. Percent Complete. An estimate, expressed as a percent, of the amount
of work that has been completed on an activity or group of activities.
PDM. Precedence Diagramming Method. A network diagramming tech-
nique in which activities are represented by boxes (or nodes). Activities
are linked by precedence relationships to show the sequence in which
the activities are to be performed.
Performance reporting. Collecting and disseminating information about
project performance to help ensure project progress.
Performing organization. The enterprise whose employees are most di-
rectly involved in doing the work of the project.
PERT. Program Evaluation and Review Technique. An event-oriented
network analysis technique used to estimate project duration when
there is a high degree of uncertainty with the individual activity dura-
tion estimates. PERT applies the critical path method to a weighted
average duration estimate.
PERT chart. A specific type of project network diagram.
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Glossary 395
PF. Planned Finish date. The point in time when work on an activity is
scheduled to finish.
Phase. A collection of logically related project activities, usually culminat-
ing in the completion of a major deliverable.
Planned value. Formerly, Budgeted Cost of Work Scheduled, BCWS, in
the Earned Value Reporting System. It is the time-phased budget of
the project, PV.
PM. (1) Project Management. The application of knowledge, skills, tools,
and techniques to project activities in order to meet or exceed stake-
holder needs and expectations from a project. (2) Project Manager. The
individual responsible for managing a project.
PMBOK. Project Management Body of Knowledge. An inclusive term

that describes the sum of knowledge within the profession of project
management. As with other professions such as law, medicine, and ac-
counting, the body of knowledge rests with the practitioners and aca-
demics who apply and advance it. The PMBOK includes proven,
traditional practices that are widely applied as well as innovative and
advanced ones that have seen more limited use.
PMP. Project Management Professional. An individual certified as such
by the Project Management Institute.
Precedence relationship. The term used in the precedence diagramming
method for a logical relationship. In current usage, however, prece-
dence relationship, logical relationship, and dependency are widely
used interchangeably regardless of the diagramming method in use.
Predecessor activity. (1) In the arrow diagramming method, the activity
that enters a node. (2) In the precedence diagramming method, the
‘‘from’’ activity.
Procurement planning. The process of identifying which project needs
can be best met by procuring products or services outside the project
organization. It involves the consideration of whether to procure, how
to procure, what to procure, how much to procure, and when to pro-
cure it.
Professional responsibility. Professional responsibility is a domain in
project management that refers to the aspects of the profession, such as
legal, ethical, and professional behavior.
Program. A group of related projects managed in a coordinated way. Pro-
grams usually include an element of ongoing activity.
Project. A temporary endeavor undertaken to create a unique product or
service.
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396 Glossary
Project charter. A document issued by senior management that provides

the project manager with the authority to apply organizational re-
sources to project activities.
Project communications management. A subset of project management
that includes the processes required to ensure proper collection and
dissemination of project information. It consists of communications
planning, information distribution, performance reporting, and admin-
istrative closure.
Project cost management. A subset of project management that includes
the processes required to ensure that the project is completed within
the approved budget. It consists of resource planning, cost estimating,
cost budgeting, and cost control.
Project human resource management. A subset of project management
that includes the processes required to make the most effective use of
the people involved with the project. It consists of organizational plan-
ning, staff acquisition, and team development.
Project integration management. A subset of project management that
includes the processes required to ensure that the various elements of
the project are properly coordinated. It consists of project plan develop-
ment, project plan execution, and overall change control.
Project life cycle. A collection of generally sequential project phases whose
name and number are determined by the control needs of the organiza-
tion or organizations involved in the project.
Project management software. A class of computer applications specifi-
cally designed to aid with planning and controlling project costs and
schedules.
Project management team. The members of the project team who are
directly involved in project management activities. On some smaller
projects, the project management team may include virtually all of the
project team members.
Project network diagram. Any schematic display of the logical relation-

ships of project activities. Always drawn from left to right to reflect
project chronology. Often incorrectly referred to as a ‘‘PERT chart.’’
Project phase. A collection of logically related project activities, usually
culminating in the completion of a major deliverable.
Project plan. A formal, approved document used to guide both project
execution and project control. The primary uses of the project plan are
to document planning assumptions and decisions, to facilitate commu-
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Glossary 397
nication among stakeholders, and to document approved scope, cost,
and schedule baselines. A project plan may be a summary or detailed.
Project plan development. Taking the results of other planning processes
and putting them into a consistent, coherent document.
Project plan execution. Carrying out the project plan by performing the
activities included therein.
Project planning. The development and maintenance of the project plan.
Project procurement management. A subset of project management that
includes the processes required to acquire goods and services from out-
side the performing organization. It consists of procurement planning,
solicitation planning, solicitation, source selection, contract administra-
tion, and contract closeout.
Project quality management. A subset of project management that in-
cludes the processes required to ensure that the project will satisfy the
needs for which it was undertaken. It consists of quality planning, qual-
ity assurance, and quality control.
Project risk management. A subset of project management that includes
the processes concerned with identifying, analyzing, and responding to
project risk. It consists of risk identification, risk quantification, risk
response development, and risk response control.
Project schedule. The planned dates for performing activities, and the

planned dates for meeting milestones.
Project scope management. A subset of project management that in-
cludes the processes required to ensure that the project includes all of
the work required, and only the work required, to complete the project
successfully. It consists of initiation, scope planning, scope definition,
scope verification, and scope change control.
Project team members. The people who report either directly or indi-
rectly to the project manager.
Project time management. A subset of project management that includes
the processes required to ensure timely completion of the project. It
consists of activity definition, activity sequencing, activity duration esti-
mating, schedule development, and schedule control.
Projectized organization. Any organizational structure in which the proj-
ect manager has full authority to assign priorities and to direct the work
of individuals assigned to the project.
PS. Planned Start date. The point in time work is scheduled to start on an
activity.
PV. See Planned Value.
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398 Glossary
QA. Quality Assurance. (1) The process of evaluating overall project per-
formance on a regular basis to provide confidence that the project will
satisfy the relevant quality standards. (2) The organizational unit that
is assigned responsibility for quality assurance.
QC. Quality Control. (1) The process of monitoring specific project re-
sults to determine if they comply with relevant quality standards and
identifying ways to eliminate causes of unsatisfactory performance. (2)
The organizational unit that is assigned responsibility for quality con-
trol.
Quality planning. Identifying which quality standards are relevant to the

project and determining how to satisfy them.
RAM. Responsibility Assignment Matrix. A structure that relates the proj-
ect organization structure to the work breakdown structure to help
ensure that each element of the project’s scope of work is assigned to a
responsible individual.
RDU. Remaining Duration. The time needed to complete an activity.
Reserve. A provision in the project plan to mitigate cost and/or schedule
risk. Often used with a modifier (e.g., management reserve, contin-
gency reserve) to provide further detail on what types of risk are meant
to be mitigated. The specified meaning of the modified term varies by
application area.
Resource leveling. Any form of network analysis in which scheduling de-
cisions (start and finish dates) are driven by resource management con-
cerns (e.g., limited resource availability or difficult-to-manage changes
in resource levels).
Resource-limited schedule. A project schedule whose start and finish
dates reflect expected resource availability. The final project schedule
should always be resource limited.
Resource planning. Determining what resources (people, equipment, ma-
terials) are needed in what quantities to perform project activities.
Responsibility chart. A structure that relates the project organization
structure to the work breakdown structure to help ensure that each
element of the project’s scope of work is assigned to a responsible indi-
vidual.
Responsibility matrix. A structure that relates the project organization
structure to the work breakdown structure to help ensure that each
element of the project’s scope of work is assigned to a responsible indi-
vidual.
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Glossary 399

Retainage. A portion of a contract payment that is held until contract
completion in order to ensure full performance of the contract terms.
RFP. Request For Proposal. A type of bid document used to solicit pro-
posals from prospective sellers of products or services.
RFQ. Request For Quotation. Generally, this term is equivalent to request
for proposal. However, in some application areas it may have a nar-
rower or more specific meaning.
Risk event. A discrete occurrence that may affect the project for better or
worse.
Risk identification. Determining which risk events are likely to affect the
project.
Risk quantification. Evaluating the probability of risk event occurrence
and effect.
Risk response control. Executing the risk management plan in order to
respond to risk events over the course of the project.
Risk response development. Defining enhancement steps for opportuni-
ties and mitigation steps for threats.
S-curve. Graphic display of cumulative costs, labor hours, or other quanti-
ties plotted against time. The name derives from the S-like shape of the
curve (flatter at the beginning and end, steeper in the middle) produced
on a project that starts slowly, accelerates, and then trails off.
Schedule. The planned dates for performing activities and the planned
dates for meeting milestones.
Schedule analysis. The process of identifying early and late start and fin-
ish dates for the uncompleted portions of project activities.
Schedule compression. Shortening the project schedule without reducing
the project scope. Duration compression is not always possible and
often requires an increase in project cost.
Schedule control. Influencing the factors that create schedule changes to
ensure that changes are beneficial, determining that the schedule has

changed, and managing the actual changes when and as they occur.
Schedule development. Analyzing activity sequences, activity durations,
and resource requirements to create the project schedule.
Scope. The work that must be done in order to deliver a product with the
specified features and functions, and the features and functions that are
to be included in a product or service.
Scope baseline. The original plan (for a project, a work package, or an
activity), plus or minus approved changes.
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400 Glossary
Scope change. Any change to the project scope. A scope change almost
always requires an adjustment to the project cost or schedule.
Scope change control. Influencing the factors that create scope changes
to ensure that changes are beneficial, determining that a scope change
has occurred, and managing the actual changes when and if they occur.
Scope definition. Decomposing the major deliverables into smaller, more
manageable components to provide better control.
Scope planning. Developing a written scope statement that includes the
project justification, the major deliverables, and the project objectives.
Scope verification. Ensuring that all identified project deliverables have
been completed satisfactorily.
SF. (1) Scheduled Finish date. The point in time when work is scheduled
to finish on an activity. (2) Start-to-Finish, indicating that the ‘‘from’’
activity must start before the ‘‘to’’ activity can finish.
Should-cost estimate. An estimate of the cost of a product or service used
to provide an assessment of the reasonableness of a prospective contrac-
tor’s proposed cost.
Slack. Term used in PERT for float.
Solicitation. Obtaining quotations, bids, offers, or proposals as appro-
priate.

Solicitation planning. Documenting product requirements and identify-
ing potential sources.
Source selection. Choosing from among potential contractors.
SOW. Statement Of Work. A narrative description of products or services
to be supplied under contract.
SPI. Scheduled Performance Index. The ratio of work performed to work
scheduled (EV/PV).
SS. (1) Scheduled Start date. The point in time work is scheduled to start
on an activity. (2) Start-to-Start. A type of dependency relationship
where the ‘‘from’’ activity has to start before the ‘‘to’’ activity can start.
Staff acquisition. Getting the human resources needed assigned to and
working on the project.
Stakeholders. Individuals and organizations who are involved in or may
be affected by project activities.
Start date. A point in time associated with an activity’s start.
Subnetwork. A subdivision of a project network diagram usually repre-
senting some form of subproject.
Successor activity. (1) In the arrow diagramming method, the activity
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Glossary 401
that departs a node. (2) In the precedence diagramming method, the
‘‘to’’ activity.
SV. Schedule Variance. (1) Any difference between the scheduled comple-
tion of an activity and the actual completion of that activity. (2) In
earned value, EV less PV.
Target schedule. The original plan (for a project, a work package, or an
activity), plus or minus approved changes.
Task. A unit of work performed as part of a project. A task usually has a
duration, a cost, and resource requirements. Tasks may be subdivisions
of activities.

TC. Target Completion date. An imposed date that constrains or other-
wise modifies the network analysis.
Team development. Developing individual and group skills to enhance
project performance.
Team members. The people who report either directly or indirectly to the
project manager.
TF. (1) Total Float. The total amount of float available to an activity. (2)
Target Finish date. The date work on an activity is planned (targeted)
to finish.
Time-scaled network diagram. Any project network diagram drawn in
such a way that the positioning and length of the activity represents its
duration. Essentially, it is a bar chart that includes network logic.
TQM. Total Quality Management. A common approach to implementing
a quality improvement program within an organization.
TS. Target Start date. The date work is planned (targeted) to start on an
activity.
WBS. Work Breakdown Structure. A deliverable-oriented grouping of
project elements that organizes and defines the total scope of the proj-
ect. Each descending level represents an increasingly detailed definition
of a project component. Project components may be products or ser-
vices.
Work item. An element of work performed during the course of a project.
Work package. A deliverable at the lowest level of the work breakdown
structure. A work package may be divided into activities.
Workaround. A response to a negative risk event. Distinguished from a
contingency plan in that a workaround is not planned in advance of
the occurrence of the risk event.
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9618$$ INDX 09-06-02 15:32:57 PS
INDEX
accelerated depreciation, 101–102
acceptable quality level (AQL), 171
acceptance, of risks, 160–161
activity, definition of, 46–47
activity duration, 56–57
estimating, 46
span vs., 56–57
activity level of work package, 27–28
activity on arrow diagramming (AOA),
47–49
activity sequencing, 46, 47
actual cost (AC), 87
actual cost of work performed (ACWP),
87
addition rule, 145–147
affinity diagramming, 158
analogous estimates, 80–81
analogy techniques, for risk manage-
ment, 138, 140
AQL (acceptable quality level), 171
assets, 96
attribute inspections, 169–170
average rate of return on investment, 34
avoidance, 159
award process, 185
balanced matrix organizations, 108–109
balance sheets, 96–98

baselines
cost, 83, 132
schedule, 132
scope, 23–25, 132
benchmarking, 179
benefit cost ratios, 94
best case/worst case situations, 151
bidding, 20–23
bill of material (BOM), 30
blanket orders, 192–193
bottom up cost estimates, 80
brainstorming, 135, 139
breakdown structures, 30
see also work breakdown structure
(WBS)
break even charts, 32–33
break even point, 32
budget at completion (BAC), 90–91
budgeted cost of work performed
(BCWP), 87
budgeted cost of work scheduled
(BCWS), 86–87
budget estimates, 80
buffering schedules, 63–67
cash flow analysis, 31–32, 35, 41–43
cause and effect diagrams, 172
chain networks, 205
change management, 30–31
checklists, 138, 139
for quality control, 178

circular networks, 205
clients, see stakeholders
closing project domain, of PMI exam,
222–223
coercive power, 121–122
commodities, 190–192
communications
barriers to, 198–199
formal, 201
free and open model of, 206–207
general model of, 195–197
improving, 199
informal, 201–202
405
9618$$ INDX 09-06-02 15:32:57 PS
406 Index
communications (continued)
networks for, 204–207
verbal, 200
see also listening; networking
communications management, 195
comparative ranking, of risks, 156–157
compromise type of conflict resolution,
126
conduct, code of professional, 216–217
conflict resolution, 124–127
compromise type of, 126
forcing style of, 125
problem solving method of, 126–127
smoothing style of, 126

withdrawal type of, 127
contracting process, 185
contracting risks, 160
contracts, 181
definition of, 182
life cycle process for, 183–185
types of, 185–190
contractual WBS (CWBS), 30
control charts, 175–178
controlling project domain, of PMI
exam, 222
cost, and relationship with price, 19–20
cost baseline, 83, 132
cost budgeting, 83
cost control, 85
see also earned value reporting systems
cost estimates
analogous, 80–81
bottom up, 80
definition of, 79
definitive, 81–83, 84
parametric, 81
top down, 80
types of, 79–83
cost management
definition of, 77
reasons for needing, 77–78
cost performance index (CPI), 91
cost plus contracts, 188–190
award fee, 190

fixed fee, 189–190
incentive fee, 190
cost variance (CV), 91–92
CPM (critical path method), 60–61
crashing, 61–62
Crawford slip technique, 19, 137, 139
critical path method (CPM), 60–61,
67–68
customers, see stakeholders
danglers, 56
decision trees, 151–155
defects, costs of, 168
definitive estimates, 81–83, 84
deliverables, 24–25
Delphi technique, 135–136, 139
Demming, Edward, 167–169
fourteen points of, 169
depreciation, 100
accelerated, 101–102
double declining balances method,
102
straight line, 100–101
sum of the years’ digits method,
101–102
diagramming, 55–56
activity on arrow method of, 47–49
logical precedence, 56
precedence method of, 49–50
for quality control, 172
techniques of, 138, 140

distance conferencing, 201
‘‘divide and conquer’’ principle, 26
documentation reviews, 135
double declining balances method of de-
preciation, 102
duration, 56–57
estimating, 46
early finish date, 58
earned value (EV), 87
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Index 407
earned value reporting systems, 85
calculated values for, 90–94
cumulative reporting and, 85–86
data collection difficulties for, 87–89
depreciation for, 100–102
examples of, 89–90
financial measures for, 94–100
measurements needed for, 86–87
reporting work completed for, 89
economic value added (EVA), 99–100
effort, 56
80–20 rule, 172
e-mail, 200
estimate at completion (EAC), 92–93
estimates, see cost estimates
estimate to complete (ETC), 994
evaluations, personal, see performance
reviews
events

finish, 56
probability for, 144
start, 56
executing project domain, of PMI exam,
221–222
expectancy theory, 113–115
expected values, 150–151
expert interviews, 137–138, 139
expert power, 123
fast tracking, 61–62
50–50 rule, 89
finish dates, 58
finish events, 56
finish-finish (FF) relationships, 53
finish-start (FS) relationships, 50–52
fishbone diagram, 172
fixed price contracts, 186–188
firm, 186–187
plus economic adjustment, 187–188
plus incentive, 188
float, 60
flowcharts, for quality control, 172
forcing style of conflict resolution, 125
Ford, Henry, 9, 111
formal communications, 201
forward buying, 192
fourteen points, Deming’s, 169
free and open model of communication,
206–207
free float, 68

Gantt chart, 85
grade, vs. quality, 165–166
Guide to the Project Management Body of
Knowledge (PMBOK), 2
Herzberg, Fredrick, 117–118
hierarchy of needs concept of motiva-
tion, 115–117
histograms, resource, 66–67
hygiene factors, 117–118
impact analysis, 149–155
income statements, 96–97
indexes, 92
individual pieces of work, 78–79
informal communications, 201–202
initiating project domain, of PMI exam,
219–220
inspections, for quality control,
169–170
internal rate of return on investment,
39–44
International Organization for Stan-
dardization (ISO), 1
Ishikawa, Kaoru, 172
job design, 118–121
job enlargement, 119–120
job enrichment, 120–121
justifications, project, 31–44
Kaizen method, for quality control, 179
known risks, 162
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408 Index
lags, 54–55
leads, 54–55
learning curve theory, 111–112
legitimate power, 122
liabilities, 96
life cycle costing, 94
listening skills, improving, 202–204
see also communications
logical relationships
diagramming, 55–56
finish-finish (FF), 53
finish-start (FS), 5052
start-finish (SF), 53–54
start-start (SS), 52–53
McGregor, Douglas, 123–124
make or buy decisions, 182–183
management by walking around,
207–209
Maslow, Abraham, 115–117
matrix organizations, 10–12
balanced, 108–109
performance reviews in, 209–210
project managers in, 105–110
strong, 106–107
weak, 106–108
measurement inspections, 169–170
meetings, managing, 127–130
mitigation, of risks, 161
Monte Carlo simulation, 73–75

motivation
in Depression era, 112
expectancy theory of, 113–115
hierarchy of needs concept of,
115–117
in Industrial Revolution, 110
learning curve theory and, 111–112
motivation/hygiene theory of,
117–118
in post–World War II, 112
scientific management and, 111,
113–114
in World War II, 112
multiplication rule, 147–149
needs, hierarchy of, 115–117
net operating profit after taxes
(NOPAT), 97–98, 99, 101
net profit, 97–98
network diagrams, building, 57–63
networking, 204–207
see also communications
networks, communication
chain, 205
circular, 205
free and open, 206–207
wheel, 205–206
nodes, 55–56
nominal group technique, 136–137,
139
order of magnitude estimates, 79–80

organizational breakdown structure
(OBS), 30
organizations
matrix, 10–12, 106–109, 209–210
project, 7–8
traditional, 8–10
overbidding, 20–23
owners equity, 96
parametric cost estimates, 81
Pareto, Vilfredo, 172
Pareto charts, 172–175
payback period, 32
performance reviews, 109–110,
209–210
PERT (program evaluation and review
technique), 68–73
planned value (PV), 86–87
planning project domain, of PMI exam,
220–221
power
coercive, 121–122
definition of, 121
expert, 123
legitimate, 122
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Index 409
referent, 122–123
representative, 123
reward, 121–122
precedence diagramming method

(PDM), 49–51
presentations, 201
present value of money, 34–39
prevention, costs of, 168
price, and relationship with cost, 19–20
probability analysis, 143–145
addition rule in, 145–147
multiplication rule in, 147–149
problem solving method of conflict reso-
lution, 126–127
procurement management
blanket orders for, 192–193
for commodities, 190–191
forward buying and, 192
splitting orders and, 193
for unique products and services, 192
professional conduct, code of, 216–217
professional responsibility, project man-
agers and, 211–216, 223–224
program evaluation and review tech-
nique (PERT), 68–73
programs, definition of, 2–3
project charters, 17–18
project cost, 78
project desirability, 94
project life cycle, 78
project management, 1
advantages of, 6–7
definition of, 2
organizing for, 7–12

power of, 27
stakeholders and, 4–5
Project Management Institute (PMI), 1
Project Management Institute (PMI) ex-
amination, 218–219
closing project domain of, 222–223
controlling project domain of, 222
executing project domain of,
221–222
initiating project domain of,
219–220
planning project domain of, 220–221
professional responsibility domain of,
223–224
project management office, 12
project managers
in balanced matrix organizations,
108–109
code of professional conduct for,
216–217
professional responsibilities of,
211–216
roles and responsibilities of, 104–105
in strong matrix organizations,
106–107
successful projects and, 13
in weak matrix organizations,
106–108
project office, 12–13
project organizations, 7–8

projects
characteristics of, 4
constraints/assumptions of, 18
definition of, 2–4
identifying key stakeholders of,
18–19
initiating, 17–23
justification of, 31–44
life cycles of, 14
processes of, 14–15
scope baseline of, 23–25
quality
cost of, 167–169
vs. grade, 165–166
management of, 165–166
planning for, 166–167
quality assurance, 166, 167
quality circles, 120
quality control, 166
attribute inspections for, 169–170
9618$$ INDX 09-06-02 15:32:58 PS
410 Index
quality control (continued)
benchmarking for, 179
cause and effect diagrams for, 172
checklists for, 178
control charts for, 175–178
flowcharting for, 172
Kaizen method for, 178
measurement inspections for,

169–170
Pareto charts for, 172–175
sampling inspections for, 169–172
referent power, 122–123
relationships, see diagramming; logical
relationships
representative power, 123
requirement process, 183–184
requisition process, 184–185
resource availability, 66
resource breakdown structure (RBS), 30
resource histogram, 66–67
resource leveling function, 66
resource requirement, 66
return on assets (ROA), 98–99
return on investment (ROI)
average rate of, 34
internal rate of, 39–44
return on sales (ROS), 97–98
reward power, 121–122
risk management
components of, 133
process of, 133
risks, 133
affinity diagramming for, 158
budgeting for, 162
comparative ranking of, 156–157
evaluating, 140–149
grouping, 157–158
impacts of, 149–155

known, 162
monitoring/controlling, 162–163
as opportunities, 161
quantification of, 155–158
recording, 138–140
response planning for, 158–161
techniques for identifying, 134–140
tolerances for, 141–143
unknown, 162
risk strategies, 159
rule of seven, 177–178
sampling inspections, 169–172
schedule control, 46
schedule development, 46
schedule performance index (SPI),
91–92
schedules
buffering, 63–67
sequence for developing, 57–62
schedule variance (SV), 91–92
scientific management, 9, 111, 113–114
scope baselines, project, 23–25, 132
scope definition, 16–17
self-actualization, 117
seven, rule of, 177–178
slack, 60
smoothing style of conflict resolution,
126
solicitation process, 185
span vs. duration, of activities, 56–57

split activity, 57
split orders, 193
sponsors, see stakeholders
stakeholders, 4
identifying key, 18–19
project management and, 4–5
scope definition and, 16–17
start dates, 58
start events, 55–56
start-finish (SF) relationships, 53–54
start-start (SS) relationships, 52–53
straight line depreciation, 100–101
strong matrix organizations, 106–107
sum of the years’ digits method of de-
preciation, 101–102
9618$$ INDX 09-06-02 15:32:58 PS
Index 411
sunk costs, 96
systems management, 29
task/activity level of work package,
27–28
Taylor, Frederick, 9, 111
Theory X/Theory Y managers, 123–124
time management
definition of, 46
processes required for proper, 46
top down cost estimates, 80
traditional organizations, 8–10
transferring risks, 159–160
20–80 rule, 89

underbidding, 20–23
unknown risks, 162
variance
cost, 91–92
schedule, 91–92
verbal communications, 200
walking around, management by,
207–209
WBS, see work breakdown structure
(WBS)
weak matrix organizations, 106–108
wheel networks, 205–206
withdrawal style of conflict resolution,
127
work breakdown structure (WBS), 25–
28, 78–79
creating, 26
definition of, 26
systems approach to, 28–31
work package level of, 26–28
work calendar, 65–66
work design, 118–121
work package level, 26–28
worst case/best case situations, 151
written communications, 200
zero float, 61
0–100 rule, 89