Chapter 4
Planning Project Cost and Quality Management
THE PMP® EXAM CONTENT FROM THE PLANNING PERFORMANCE DOMAIN COVERED IN THIS CHAPTER INCLUDES THE FOLLOWING:
Develop the cost management plan based upon the project scope, schedule, resources, approved project charter-and other information, using estimating techniques, in order to manage project costs.- Develop the quality management plan and define the quality standards for the project and its products, based on the project scope, risks, and requirements in order to prevent the occurrence of defects and reduce the cost of quality.
As noted in Chapter 3, Planning is the second of five project management process groups and includes the largest number of processes—24 in total. In this chapter, we will cover processes that belong to the following Knowledge Areas: Project Cost Management and Project Quality Management.
Developing a Cost Management Plan
The purpose of the cost management plan is, naturally, to create, monitor, and control the project costs. This plan is based on the project scope and documents the estimating techniques that will be used as well as how the cost-related processes will be carried out.
The project budget is created by carrying out three planning processes:
- Plan Cost Management, which is primarily focused on the costs of resources to complete the project
- Estimate Costs, which estimates how much each activity will cost
- Determine Budget, which aggregates the total cost estimates plus contingency reserves to create the project budget
The project budget is referred to as the cost baseline, which, along with the cost management plan, becomes a part of the project management plan.
Figure 4.1 shows the inputs, tools and techniques, and outputs of the Plan Cost Management process.
FIGURE 4.1 Plan Cost Management process
Understand the Cost Management Plan
The cost management plan plays an important role within all of the Project Cost Management Knowledge Area processes. The cost management plan is created during the Plan Cost Management process and is a subsidiary plan of the project management plan (as all subplans are). Using the preceding components, the cost management plan will guide the project management team in carrying out the three cost-related processes.
Plan Cost Management
The cost management plan contains the following information:
- Level of accuracy
- Units of measure
- Organizational procedures links
- Control thresholds
- Rules of performance measurement
- Reporting formats
- Process descriptions
Keep in mind that throughout the Project Cost Management Knowledge Area, the cost management plan serves as a guide for documenting and controlling the budget of the project.
Inputs of Plan Cost Management
Know the following four inputs of the Plan Cost Management process:
Project Charter The project charter has the summary budget, which provides a key input for creating the detailed project costs.
Project Management Plan The project management plan contains elements used to create the cost management plan, focusing on, but not limited to, the following:
- Schedule management plan, which helps clarify how the schedule will be developed and managed.
- Risk management plan, which documents how risks will be identified, analyzed, and addressed. This can influence costs.
Enterprise Environmental Factors Several enterprise environmental factors can influence the Plan Cost Management process, including but not limited to the organization’s culture and structure, marketplace conditions, currency exchange rates (if the project is multinational), published commercial information such as resource cost rate information, and the project management information system.
Organizational Process Assets Financial controls procedures; historical information, including a lessons learned knowledge base; financial databases; and existing formal and informal cost estimating and budgeting-related policies, procedures, and guidelines are a few of the organizational process assets that help shape the Plan Cost Management process.
Tools and Techniques of Plan Cost Management
The three tools and techniques that the Plan Cost Management process uses are expert judgement, data analysis, and meetings.
Expert Judgment Expert judgment brings invaluable perspective about prior similar projects attempted, as well as the existing environment that will affect the project. This can also be key in considering whether to combine methods of cost planning and how to best resolve differences between those methods.
Data Analysis You may have many strategic options to consider when developing the cost management plan. Those options include self-funding, funding with equity, or funding with debt. Financial options will be influenced by the organization’s policies and procedures, including but not limited to payback period, return on investment, internal rate of return, discounted cash flow, and net present value.
Meetings In the course of developing the cost management plan, members of project teams may attend meetings to help with information exchange and decision making. Depending on the meeting, the following members might be a part of the discussion: the project manager, the project sponsor, selected project team members, and anyone having responsibility in this area.
Outputs of Plan Cost Management
For the exam, know that the output of the Plan Cost Management process is the cost management plan.
Cost Management Plan The cost management plan should establish the following:
- Units of measure, such as quantity and time measures, and currency to be used
- Level of precision, which is the degree to which activity cost estimates will be rounded up or down
- Level of accuracy, which is the acceptable range used in determining contingencies and realistic activity cost estimates
- Organizational procedures links, where the WBS provides the framework for the cost management plan to help foster consistency with estimates, budgets, and controls
- Control thresholds, which document the identified variation that can occur before some action needs to be taken
- Rules of performance measurement, like the rules for earned value management (EVM), and which techniques to use
- Reporting formats defining the form and frequency of various cost reports
- Process descriptions for the other cost management processes
- Additional details such as explanations of strategic funding choices, how to deal with currency exchange rate fluctuations, and the procedure for project cost recording
Estimate Costs
The purpose of the Estimate Costs process is to develop cost estimates for resources, both human and material, required for all schedule activities and the overall project. This includes weighing alternative options and examining risks and trade-offs. The cost-related processes are governed by the cost management plan, which establishes the format and conditions used to plan for project costs. It also outlines how you will estimate, budget, and control project costs.
Figure 4.2 shows the inputs, tools and techniques, and outputs of the Estimate Costs process.
FIGURE 4.2 Estimate Costs process
Inputs of Estimate Costs
You should be familiar with these four inputs of the Estimate Costs process:
- Project management plan
- Project documents
- Enterprise environmental factors
- Organizational process assets
Project Management Plan There are three primary inputs used from within the project management plan: cost management plan, quality management plan, and scope baseline.
- Cost Management Plan The cost management plan is a key input that specifies how project costs will be managed and controlled, including the method to be used and level of accuracy targets required to estimate cost activity.
- Quality Management Plan For the purposes of the Estimate Costs process, the quality management plan documents the activities and resources needed to meet the quality objectives.
- Scope Baseline The following are included within the scope baseline and are used in creating cost estimates:
- Project scope statement (key deliverables, funding constraints, and other financial assumptions)
- WBS, which serves as the basis for estimating costs (project deliverables, control accounts)
- WBS dictionary
Project Documents There are four project documents that are typically referenced for estimating costs: the project schedule, resource requirements, risk register, and lessons learned register.
- Project Schedule and Resource Requirements Activity resource requirements and activity duration estimates are used from within the project schedule and serve as key inputs when estimating costs.
- Risk Register From within the risk register, the cost of mitigating, avoiding, or transferring risks will be used for estimating costs, particularly when the risks have negative impacts to the project.
- Lessons Learned Register The lessons learned register can provide insight into future phases, where cost estimates have yet to be developed.
Enterprise Environmental Factors According to the PMBOK® Guide, the following enterprise environmental factors should be considered in this process:
- Market conditions, which help you to understand the materials, goods, and services available in the market and what terms and conditions exist to procure those resources.
- Published commercial information, which refers to resource cost rates. These are obtained from commercial databases or published seller price lists.
- Exchange rates and inflation.
Organizational Process Assets The organizational process assets include historical information and lessons learned on previous projects of similar scope and complexity. Also useful are cost-estimating worksheets from past projects as templates for the current project.
Tools and Techniques of Estimate Costs
The following list includes the tools and techniques of the Estimate Costs process:
- Expert judgment
- Analogous estimating
- Parametric estimating
- Bottom-up estimating
- Three-point estimating
- Data analysis
- Project management information system
- Decision making
Expert Judgment Cost estimates from individuals who have had previous experience in the past on similar projects can be used. Information from those who have experience in performing the activities becomes valuable for calculating accurate estimates.
Analogous Estimating Analogous estimating, also called top-down estimating, is a form of expert judgment. This technique uses actual costs of a similar activity completed on a previous project to determine the cost estimate of the current activity. It can be used when the previous activities being compared are similar to the activities being estimated. Analogous estimating may also be useful when detailed information about the project is not yet available. Top-down estimating techniques are also used to estimate total project cost to look at the estimate as a whole. Although analogous estimating is considered to be a quick and low-cost estimating technique, it is low in accuracy.
Parametric Estimating Parametric estimating uses historical information and statistical data to calculate cost estimates. For a complete description of parametric estimating, see “Tools and Techniques of Estimate Activity Durations” in Chapter 3.
Bottom-Up Estimating This technique estimates costs associated with every activity individually by decomposing an activity into smaller pieces of work until the cost of the work can be confidently estimated. The costs of the activity are then rolled up to the original activity level.
Three-Point Estimating Three-point estimates are used in this process when the project team is attempting to improve estimates and account for risk by estimating uncertainty. The concept and formulas are similar to those used to estimate activity durations. The most likely, optimistic, and pessimistic estimates are captured. From there, a triangular distribution can be calculated (simple average) or a beta distribution (weighted average):
- Triangular distribution:
- Beta distribution:
Data Analysis Data analysis techniques typically used to develop cost estimates include alternatives analysis, reserve analysis, and cost of quality.
During this process, cost reserves (or contingencies) and management reserves are added. Cost contingencies can be aggregated and assigned to a schedule activity or a WBS work package level. Contingency reserve is added to account for existing known risk, whereas management reserves are added to account for unknown risk.
The cost of quality (COQ) is the total cost to produce the product or service of the project according to the quality standards. You can find additional information on cost of quality in “Tools and Techniques of Plan Quality Management” later in this chapter.
Vendor bid analysis, a type of alternatives analysis, involves gathering information from vendors to help establish cost estimates. This can be accomplished by requesting bids or quotes or working with some of the trusted vendor sources for estimates.
Project Management Information System The project management software tool can help quickly determine estimates given different variables and alternatives.
Decision Making In this assessment process, an evaluation of multiple alternatives is performed to determine the results future actions might bring. Decision-making techniques are valuable in improving estimate accuracy and commitment to the determined estimates.
Outputs of Estimate Costs
The following are three outputs that result from the Estimate Costs process:
- Cost estimates
- Basis of estimates
- Project documents updates
Cost Estimates Cost estimates are quantitative amounts that reflect the cost of the resources needed to complete the project activities. The following resources are commonly needed:
- Human resources
- Material
- Equipment
- Information technology needs
- Any contingency reserve amounts and inflation factors
Basis of Estimates Basis of estimates is the supporting detail for the activity cost estimates and includes any information that describes how the estimates were developed, what assumptions were made during the Estimate Costs process, and any other details needed. According to the PMBOK® Guide, the basis of estimates should include the following as a minimum:
- Description of how the estimate was developed or the basis for the estimate
- Description of the assumptions made about the estimates or the method used to determine them
- Description of the constraints
- Range of possible results
- Confidence level regarding the final estimates
Project Documents Updates Updates to project documents, as a result of determining cost estimates, commonly include the following to account for cost variances and refined estimates:
- Lessons learned register
- Risk register
- Assumption log
Determine Budget
The Determine Budget process is primarily concerned with determining the cost baseline, which represents the project budget. This process aggregates the cost estimates of activities and establishes a cost baseline for the project that is used to measure performance of the project throughout the remaining process groups. By the end of this process, the project schedule and the project budget will both have been created.
Figure 4.3 shows the inputs, tools and techniques, and outputs of the Determine Budget process.
FIGURE 4.3 Determine Budget process
Inputs of Determine Budget
The Determine Budget process contains six inputs:
- Project management plan
- Project documents
- Business documents
- Agreements
- Enterprise environmental factors
- Organizational process assets
Project Management Plan As we have seen earlier in the chapter, the cost management plan lays out how project costs will be managed and controlled. This is a key document used from within the project management plan. Others include the scope baseline and resource management plan. When determining the budget, the following is used within the scope baseline:
- Project scope statement (describes the constraints of the project)
- WBS (shows how the project deliverables are related to their components and typically provides control account information)
- WBS dictionary
Project Documents The following documents are used to develop the budget: cost estimates, basis of estimates, project schedule, and risk register.
- Cost Estimates Activity cost estimates are determined for each activity within a work package and then summed to determine the total estimate for a work package.
- Basis of Estimates Basis of estimates contains all the supporting details regarding the estimates. Assumptions regarding indirect costs and whether they will be included in the project budget should be considered. Indirect costs cannot be directly linked to any one project but are allocated among several projects.
- Project Schedule The schedule contains information that is helpful in developing the budget, such as start and end dates for activities, milestones, and so on. Based on the information in the schedule, budget expenditures for calendar periods can be determined.
- Risk Register When determining the budget, a review of the risk register will help to compile the costs for risk response.
Business Documents Business documents referenced during the budget development process include the business case and the benefits management plan. Both document success factors and metrics that the project has set out to achieve.
Agreements Agreements, such as contracts, include cost information that should be included in the overall project budget.
Enterprise Environmental Factors Exchange rates (considered to be an enterprise environmental factor) are important to reference when developing the budget.
Organizational Process Assets The organizational process assets used include the following items:
- Cost budgeting tools
- Policies and procedures of the organization regarding budgeting exercises
- Reporting methods
Tools and Techniques of Determine Budget
Know the following tools and techniques of the Determine Budget process for the exam:
- Expert judgment
- Cost aggregation
- Data analysis
- Historical information review
- Funding limit reconciliation
- Financing
Expert Judgment Expert judgment in calculating the project budget will include information from those with past experience in conducting similar projects.
Cost Aggregation Cost aggregation is the process of tallying the schedule activity cost estimates at the work package level and then totaling the work package levels to higher-level WBS component levels. All costs can then be aggregated to obtain a total project cost.
Data Analysis In this process, reserve analysis outlines contingency reserves for unplanned project scope and unplanned project costs. Contingency reserves are included as part of the cost baseline, whereas management reserves are not.
Historical Information Review Analogous estimates and parametric estimates can be used to help determine total project costs. Actual costs from previous projects of similar size, scope, and complexity are used to estimate the costs for the current project. This is helpful when detailed information about the project is not available or it’s early in the project phases and not much information is known.
Funding Limit Reconciliation Funding limit reconciliation involves reconciling the amount of funds to be spent with the amount of funds budgeted for the project. The organization or the customer sets these limits. Reconciling the project expenses will require adjusting the schedule so that the expenses can be smoothed. This can be done by placing imposed date constraints on work packages or other WBS components in the project schedule.
Financing Financing refers to securing funds for the project. This may be from within the organization or through external funding sources.
Outputs of Determine Budget
There are three outputs of the Determine Budget process:
Cost Baseline The cost baseline provides the basis for measurement, over time, of the expected cash flows (or funding disbursements) against the requirements. Adding the costs of the WBS elements by time periods develops the cost baseline. This is also known as the project’s time-phased budget. Most projects span some length of time, and most organizations time the funding with the project.
Cost baselines can be displayed graphically, as shown in Figure 4.4 .
FIGURE 4.4 Cost baseline
The cost baseline should contain the costs for all of the expected work on the project as well as the contingency reserves set aside to account for known risks. Large projects may have more than one cost performance baseline.
Project Funding Requirements Project funding requirements describe the need for funding over the course of the project and are derived from the cost performance baseline. Funding requirements can be expressed in monthly, quarterly, or annual increments or other increments that are appropriate for your project.
Figure 4.5 shows the cost baseline, the funding requirements, and the expected cash flows plotted on the S curve. This example shows a negative amount of management reserve. The difference between the funding requirements and the cost performance baseline at the end of a project is the management reserve. Management reserves are set aside to deal with unknown risks.
FIGURE 4.5 Cost baseline, funding requirements, and cash flow
Project Documents Updates The following project documents require updates as a result of carrying out this process:
- Cost estimates
- Project schedule
- Risk register
- Any other project documents that include cost estimates
Developing a Quality Management Plan
Preventing the occurrence of defects and reducing the cost of quality can be critical to a project’s success. To this end, a quality management plan is created out of the Plan Quality Management process and is responsible for guiding the project management team in carrying out the three quality-related processes. This plan should be based on the project scope and requirements.
In addition to creating the quality management plan, the Plan Quality Management process is responsible for creating the process improvement plan. This plan measures the effectiveness of and improves the project management processes. Continuous improvement is a recurring theme throughout the PMBOK® Guide and is an important element of modern quality theories. The ideas, concepts, and theories from key quality theorists (such as Deming, Juran, and Crosby) played an important role in shaping the Project Quality Management Knowledge Area processes.
The Plan Quality Management process is concerned with targeting quality standards that are relevant to the project at hand and devising a plan to meet and satisfy those standards. The quality management plan is the result of the Plan Quality Management process, which describes how the quality policy will be implemented by the project management team. The result of this process also produces the process improvement plan, which documents the actions for analyzing processes to ultimately increase customer value.
Figure 4.6 shows the inputs, tools and techniques, and outputs of the Plan Quality Management process.
FIGURE 4.6 Plan Quality Management process
Inputs of Plan Quality Management
The Plan Quality Management process contains the following inputs:
- Project charter
- Project management plan
- Project documents
- Enterprise environmental factors
- Organizational process assets
Project Charter The project charter provides a high-level description of the project and the product’s characteristics. In addition to this, the charter may include success criteria and project objectives that will need to be measured through the quality management processes.
Project Management Plan The following are used from within the project management plan:
- Scope baseline, including the project scope statement, which defines the project deliverables, objectives, and threshold and acceptance criteria, all of which are used within the quality processes; the WBS; and the WBS dictionary
- Other management plans that might influence the overall project quality, such as the risk management plan, requirements management plan, and stakeholder engagement plan
Project Documents Several project documents may be used to help plan quality. According to the PMBOK® Guide, the following are typically referenced: the stakeholder register, risk register, requirements documentation, requirements traceability matrix, and assumption log.
- Stakeholder Register A list of stakeholders is used in this process to understand the expectations of all stakeholders. Quality has been achieved when the expectations of all stakeholders have been met.
- Risk Register The risk register outlines the documented information pertaining to risk, including the list of risks. Dealing with risk is tied into quality and should therefore be considered in the Plan Quality Management process.
- Requirements Documentation To help ensure that stakeholder expectations are met, requirements documentation becomes a key instrument to help plan how quality control will function on the project.
- Requirements Traceability Matrix The requirements traceability matrix links requirements to deliverables, which helps to ensure that requirements are fully tested.
- Assumption Log The assumption log provides the documented assumptions and constraints that relate to quality requirements and compliance.
- Enterprise Environmental Factors The project manager should consider any standards, regulations, guidelines, quality policies, or rules that exist concerning the work of the project when writing the quality plan. In addition to this, organizational structure and culture should be considered, as well as geographic distribution, marketplace conditions, and others as needed.
- Organizational Process Assets The quality policy is included from within the organizational process assets and used in this process. The quality policy is a guideline published by executive management that describes what quality policies should be adopted for projects the company undertakes.
Tools and Techniques of Plan Quality Management
Know the following tools and techniques of the Plan Quality Management process:
- Expert judgment
- Data gathering
- Data analysis
- Decision making
- Data representation
- Test and inspection planning
- Meetings
Expert Judgment Experts typically play an important role in quality management planning activities, particularly in identifying what the appropriate tools and metrics are for measuring quality adherence.
Data Gathering Various techniques are used to gather data that aids in the quality management processes. Examples noted next include benchmarking, brainstorming, and interviews.
- Benchmarking Benchmarking is a process of comparing previous similar activities to the current project activities to provide a standard against which to measure performance.
- Brainstorming Brainstorming is used to generate ideas within a large group and as a creative method for pulling ideas out for team members. A brainstorming session can also use and review information obtained using the nominal group technique.
- Interviews Conducting interviews is a method of identifying quality needs and expectations from participants and other stakeholders. Interviews can be conducted one on one or in other formats and help to create an environment of comfort, trust, and confidentiality.
Data Analysis Two data analysis techniques that are important to know for the exam are cost-benefit analysis and cost of quality.
- Cost-Benefit Analysis In the case of quality management, cost of quality trade-offs should be considered from within cost-benefit analysis. The benefits of meeting quality requirements are as follows:
- Stakeholder satisfaction is increased.
- Costs are lower.
- Productivity is higher.
- There is less rework.
- Cost of Quality The cost of quality (COQ) is the total cost to produce the product or service of the project according to the quality standards. Costs are broken into two categories: cost of conformance, which is money spent during the project to avoid failures, and cost of nonconformance, which is money spent during and after the project because of failures. Four costs are associated with the cost of quality: prevention costs and appraisal costs (conformance) and internal and external failure costs (nonconformance).
- Prevention Costs: Prevention costs are the costs associated with satisfying customer requirements by producing a product without defects.
- Appraisal Costs: Appraisal costs are the costs expended to examine the product or process and make certain the requirements are being met.
- Failure Costs: Failure costs are what it costs when things don’t go according to plan. Failure costs are also known as cost of poor quality. Two types of failure costs exist:
- Internal failure costs
- External failure costs
There are two categories of costs within COQ, as listed in Table 4.1 .
TABLE 4.1 Cost of conformance and nonconformance
| Conformance Costs | Nonconformance Costs |
| Prevention costs | Internal failure costs |
| Appraisal costs | External failure costs |
Decision Making Decision making for quality planning purposes may include multicriteria decision analysis, where criteria are prioritized and weighted and then applied to issues and alternatives are identified. This can help to develop quality metrics.
Data Representation There are several data representation techniques that are used as part of the Plan Quality Management process. Examples noted within the PMBOK® Guide include the following:
- Flowcharts show the relationships between the process steps. In regard to quality planning, flowcharting helps the project team identify quality issues before they occur.
- Logical data models are a way of depicting an organization’s data as a visual representation. This helps the project team identify where quality issues can arise when it comes to data integrity or other issues.
- Matrix diagrams help identify relationships between multiple factors, particularly when several options or alternatives are available.
- Mind mapping can be used to group and organize thoughts and facts; it can also be used in conjunction with brainstorming.
Test and Inspection Planning As part of developing the quality plan, the project team will determine how to test and inspect the product, service, or deliverable to ensure that it meets the specified needs of stakeholders.
Meetings Meetings are used by the project team to assemble the quality management plan using a mixture of the tools and techniques described earlier in this section.
Quality theorists and quality techniques are responsible for the rise of the quality management movement and the theories behind the cost of quality. Figure 4.7 highlights four quality theorists, along with their ideas, with whom you should be very familiar for the exam.
FIGURE 4.7 Quality theorists
Philip B. Crosby Philip B. Crosby is known for devising the zero defects practice, which means to do it right the first time. If the defect is prevented from occurring in the first place, costs are lower, conformance to requirements is easily met, and the cost measurement for quality becomes the cost of nonconformance rather than the cost of rework.
Joseph M. Juran Joseph M. Juran is known for the fitness for use premise, which means the stakeholders’ and customers’ expectations are met or exceeded and reflects their views of quality. Juran proposed that there could be grades of quality.
W. Edwards Deming W. Edwards Deming suggested that as much as 85 percent of the cost of quality is management’s responsibility, which came to be known as the 85 percent rule, or rule of 85. He believed that workers need to be shown what acceptable quality is and that they need to be provided with the right training so that quality and continuous improvement become natural elements of the working environment. Deming was also a major contributor to the modern quality movement and theories, which emphasize a more proactive approach to quality management (prevention over inspection). For example, he documented 14 points that summarize how management can transform their organization to one that is effective. This and his body of work have been credited for launching the Total Quality Management (TQM) movement. He also popularized the Plan-Do-Check-Act cycle, also referred to as the Deming Cycle, which focuses on continuous improvement.
Six Sigma is a measurement-based strategy that focuses on process improvement and variation reduction by applying Six Sigma methodologies to the project. There are two Six Sigma methodologies:
- DMADV (define, measure, analyze, design, and verify) is used to develop new processes or products at the Six Sigma level.
- DMAIC (define, measure, analyze, improve, and control) is used to improve existing processes or products.
Walter Shewhart According to some sources, Walter Shewhart is the grandfather of statistical quality control and the Plan-Do-Check-Act model, which was further popularized by Deming. Shewhart developed statistical tools to examine when a corrective action must be applied to a process. He is also known for the control chart techniques.
Kaizen Approach The Kaizen approach—kaizen means improvement in Japanese—is a technique in which all project team members and managers should be constantly watching for quality improvement opportunities. The Kaizen approach states that the quality of the people should be improved first and then the quality of the products or service.
Outputs of Plan Quality Management
There are four outputs of the Plan Quality Management process:
- Quality management plan
- Quality metrics
- Project management plan updates
- Project documents updates
Quality Management Plan The project manager in cooperation with the project staff writes the quality management plan. The plan, which is part of the overarching project management plan, should be based on the project scope and requirements to successfully prevent defects, thus reducing the cost of quality.
The quality management plan includes the following elements:
- Quality standards and objectives, along with a description of how the project management team will carry out the quality policy
- Quality roles and responsibilities, as well as resources needed to carry out the quality plan
- Quality tools used for the project
- List of project deliverables and processes that might go through a quality review
- All the processes and procedures the project team and organization should use to satisfy quality requirements, including the following items:
- Quality control
- Quality assurance techniques
- Continuous improvement processes
Quality Metrics A quality metric, also known as operational definition, describes what is being measured and how it will be measured during the Control Quality process. Examples of quality metrics provided by the PMBOK® Guide include percentage of tasks completed on time, cost performance measured by CPI, failure rate, number of defects identified per day, and errors found per line of code.
Project Management Plan Updates Updates made to the project management plan as a result of carrying out this process include the risk management plan and scope baseline.
Project Documents Updates The following project documents may need to be updated:
- Stakeholder register
- Risk register
- Requirements traceability matrix
- Lessons learned register
Bringing the Processes Together
This chapter covered additional information within the Planning process group, and there is still more to come!
With this additional information in mind, let’s go back and review what you’ve learned thus far about each of the project management Knowledge Areas within this chapter. Remember that Chapters 5 and 6 will continue to cover additional material that belongs to the Planning process group.
Project Cost Management Knowledge Area Review
Figure 4.8 shows the key process steps for creating the project budget. The scope baseline is necessary for determining estimates for the cost of each activity. The cost management plan comes into play and governs how the activity costs are estimated and how the project budget is created.
FIGURE 4.8 Project Cost Management Knowledge Area process interaction
Project Quality Management Knowledge Area Review
The single planning step within the Project Quality Management Knowledge Area results in several key items in the quality management processes. Figure 4.9 shows how the information resulting from scope, cost, time, and risk planning processes is necessary for carefully planning project quality. This first step in defining project quality produces the following:
- Method for planning, carrying out, and controlling quality activities
- Metrics used to measure project quality
- Methods the project management team can use to approach and then carry out quality management activities
FIGURE 4.9 Project Quality Management Knowledge Area process interaction
Which of the following quality theorists devised the zero defects practice? All of the following are tools and techniques of the Plan Quality Management process except: What is the correct definition of a critical path task? What is the cost baseline? Which definition of the cost of quality (COQ) is correct? All of the following are benefits of meeting quality requirements except: Megan is a project manager for a data center consolidation project. During a recent planning meeting, she collected estimates for how long it would take to configure all of the switches within the new location. Ron, who will be the lead for performing the activity, noted that if all goes well, it would take the team 15 hours, although he noted most likely closer to 20 hours. In a worst case, it would take the team 50 hours, provided that multiple issues arise. Based on Ron’s estimates, what is the estimate that Megan will use as the duration of the activity if she were to calculate it based on a beta distribution? Using the table provided below, calculate the late start of activity C.
Using the table provided below, calculate the early finish of activity D.
Using the table provided below, calculate the duration of the critical path.
Review Questions
Activity Name
Predecessor
Duration
A
None
5
B
A
2
C
A
6
D
A
3
E
D
1
Activity Name
Predecessor
Duration
A
None
5
B
A
2
C
A
6
D
A
3
E
B, C, D
1
Activity Name
Predecessor
Duration
A
None
5
B
A
2
C
A
6
D
A
3
E
B, C, D
1