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Operations Management Chapter 17

Good project management is especially important with virtual teams.
TRUE Virtual teams face challenges that make project management especially important.
One way that project management differs from management of more traditional activities is because of the limited lifetime of projects.
TRUE Projects have lifetimes that are typically shorter than other business endeavors.
Once a project is approved and underway, project managers are only responsible for effectively managing time and costs which, if done well, will assure project completion on time and on budget.
FALSE Managers also are responsible for assuring performance targets are met.
Matrix organizations transfer control of workers to project managers for the duration of the project.
FALSE In matrix organizations, workers are shared by functional and project managers.
Some organizations use a matrix organization to integrate the activities of specialists within a functional framework.
TRUE The matrix organization is useful in integrating specialists into projects.
The project computing algorithm requires both a forward and backward pass
TRUE Both passes are necessary to find critical path activities.
A hierarchical (vertical) listing of what must be done during a project is called matrix
FALSE This is called the work breakdown structure.
An advantage of Gantt charts in project management is that they identify which activities can be delayed without delaying the overall project.
FALSE Gantt charts cannot show sequential relationships.
A Gantt chart is built using established precedence relationships.
FALSE Gantt charts cannot show sequential relationships.
The higher the node number, the longer the activity will take.
FALSE The higher the node number, the later the activity will occur.
The probability of occurrence of risk events is lower near the beginning of a project and higher near the end of the project since very few activities remain.
FALSE The probability of occurrence of risk events is higher near the beginning of a project.
The costs associated with risk events tend to be lower near the beginning of a project, and higher near the end of the project.
TRUE This is true even though the probability of occurrence of risk events is higher near the beginning of a project.
Although PERT and CPM were originally developed for somewhat different types of projects, they are now nearly identical in terms of analysis and procedures.
TRUE PERT and CPM are commonly used to refer to the same approaches.
The network diagram describes sequential relationships among major activities on a project.
TRUE Network diagrams depict sequential relationships.
The path in a network with the average length of time to completion is called the critical path.
FALSE The critical path is the path that has the largest duration.
The sum of times of the longest path in a network indicates expected project completion time, and the activities represent the critical activities.
TRUE These are definitions of the critical path and the critical activities.
Path probabilities are calculated by dividing path mean by path standard deviations.
FALSE Path probabilities are calculated by subtracting the path mean from the specified time, dividing by the pat standard deviation, then referring the resulting z-score to the standard normal distribution.
The main function of dummy activities is to clarify relationships in network diagrams.
TRUE Dummy variables are used to ensure that precedence relationships are maintained.
The earliest finish time for an activity is equal to the latest finish time minus the activity time.
FALSE Early finish is equal to the early start plus the activity time.
The latest starting time for an activity is equal to the latest finish time minus the activity time.
TRUE This is how late start times are computed.
The earliest finish time for an activity is equal to the latest finish time minus the activity slack.
TRUE The difference between late finish and early finish is the activity slack.
Many activities have slack time; if we add these slack times together, this represents the potential improvement in early completion for the project.
FALSE Not all slack times are independent of one another.
If two consecutive activities on the same path each have two days of activity slack, this means that each of them can be delayed by two days without delaying the project.
FALSE Likely only two days total slack are available for these two activities.
The task of identifying risks should involve everyone associated with the project.
TRUE A clearer picture of risk is gained with broad inputs.
Most likely time generally is more than optimistic time.
TRUE Most likely time is never less than the optimistic time, but it can be equal to the optimistic time.
Activities not on the critical path have a slack time equal to zero.
FALSE Critical path activities have slack time equal to zero.
If two consecutive activities have shared slack, this means that each of them can use only half of the slack without delaying completion of the project.
FALSE This means that between them only the total amount of shared slack can be used.
Deterministic networks use three time estimates – shortest, most likely and longest – for each activity in order to best determine the activity’s estimated time
FALSE Probabilistic networks use these time estimates.
Slack time is equal to LS-ES or LF-EF.
TRUE This is how slack time is computed.
Project management software eliminates conflicts when there are shared resources.
FALSE Project management software simply points to conflicts, it does not eliminate them.
The standard deviation of the critical path is equal to the sum of the standard deviations of all of the activities on the critical path.
FALSE The standard deviation of the critical path is equal to the square root of the sum of the variances of all of the activities on the critical path.
The total cost of crashing any one activity should never exceed 20% of the total cost of the original project.
FALSE The total cost of crashing any one activity should not exceed the value gained by shortening that activity’s duration.
If the expected length of a path is more than 2.5 standard deviations less than a desired project completion time, the path would not be a factor in assessing the probability of finishing the project on time.
FALSE Usually a path is not considered a factor unless its expected length is more than 3 standard deviations less.
In order to determine the probability of timely project completion, it is sometimes necessary to take into account paths other than the critical path.
TRUE This is especially true of non-critical paths have relatively large standard deviations.
The probability that the project will go beyond the desired time is equal to one minus the joint probability that all paths will be completed within the desired time.
TRUE
This is how this value is calculated.
A disadvantage of activity-on-node diagrams is the occasional need for dummy activities.
FALSE
Dummy activities are not needed in activity-on-node diagrams.
Simulation can be used for cases in which network activity times are dependent.
TRUE
Simulation is valuable in these circumstances.
Project managers are sometimes able to reduce indirect project costs by increasing direct costs.
TRUE
Speeding up project activities might be more costly, but the indirect cost savings might be worth it.
Only activities on the critical path are initial candidates for crashing.
TRUE
The first activity to be crashed must be on the critical path.
The optimum project length in crashing occurs where the cumulative cost of crashing equals savings in the indirect costs.
TRUE
Beyond this point, additional crashing is not worth it.
In PERT, the expected project duration will never exceed the expected duration of the critical path.
TRUE
In PERT, the expected project duration is found by calculating the expected duration of the critical path.
In PERT, the path with the fewest activities is referred to as the critical path.
FALSE
In PERT, the path with the longest expected project duration is the critical path.
Project management differs from management of more traditional activities mainly because of:
A. its limited time frame
B. its unique, defined set of activities
C. (a) and (b)
D. the requirement for use of the appropriate resources
E. the need for planning and execution
C. (a) and (b)
These are the primary reasons that project management differs from the management of more traditional tasks.
Which of the following would probably not involve the use of PERT?
A. planning and constructing a new city hall
B. developing an advertising campaign for a new product
C. designing and constructing a subway system
D. writing a poem
E. preparing for the visit of a foreign dignitary
D. writing a poem
Developing a work breakdown structure would be next to impossible.
Once a project is underway, the project manager usually is not responsible for effectively managing:
A. the people
B. costs
C. resources
D. time
E. project priority
E. project priority
The project’s priority is not the project manager’s responsibility.
Which of the following is not a form of risk reduction in project management?
A. backup system
B. outsourcing
C. risk-sharing
D. scenario analysis
E. all of the above are risk reduction methods
D. scenario analysis
Scenario analysis can be used to fashion risk reduction approaches, but it doesn’t actually reduce risks.
A sequence of activities that leads from the starting node to the finishing node is called a _______.
A. Path
B. Sequel
C. Trail
D. Critical sequence
E. Time line
A. Path
This is called a path.
Which of the following is not typically treated as part of a project life cycle?
A. feasibility analysis
B. planning
C. maturity
D. incubation
E. alternative generation
C. maturity
Projects do not have maturities as in product life-cycles.
A hierarchical listing of what must be done in a project is called:
A. work breakdown structure (WBS)
B. PERT
C. planning matrix
D. crashing
E. critical path
A. work breakdown structure (WBS)
The WBS is a hierarchical listing of what must be done in a project.
A method used for establishing a logical framework for identifying the required activities for the project is called:
A. Work breakdown structure
B. PERT
C. planning matrix
D. crashing
E. critical path analysis
A. Work breakdown structure
The WBS is a hierarchical listing of what must be done in a project.
A popular tool for planning and scheduling simple projects, and for initial planning on more complex projects, is the:
A. activity-on-arrows network
B. activity-on-nodes network
C. Gantt chart
D. critical path method
E. program evaluation and review technique
C. Gantt chart
Gantt charts are useful for simply projects.
To _____ an activity means to shorten the time it will take.
A. Speed
B. Fund
C. Crash
D. Aggregate
E. Matrix
C. Crash
Crashing an activity means speeding it up.
Concerning PERT and CPM:
A. These are two different names for essentially the same technique.
B. CPM tends to focus more on the critical path; PERT focuses on the parallel paths.
C. PERT gives a clearer indication of activity slack, while CPM gives a better picture of path slack.
D. Because of its recent discovery, much less is known about CPM than PERT.
E. All of the above are true.
A. These are two different names for essentially the same technique.
PERT and CPM have grown to be largely interchangeable terms.
The advantage(s) a precedence diagram has over a Gantt chart is(are):
A. its ability to reveal relationships among activities.
B. it can easily show networks.
C. (a) and (b).
D. its simplicity.
E. all of the above.
C. (a) and (b).
Precedence diagrams reveal activity relationships and clarify networks.
In a project network the critical path is the sequence of activities which has the:
A. most activities
B. most nodes
C. most events
D. longest time
E. greatest variance
D. longest time
The critical path is the longest path in the project network.
Which of the following is not true about the use of dummy activities in project networking?
A. They preserve the separate identities of activities.
B. They clarify precedence relationships among activities.
C. They have an activity time equal to zero.
D. They have an activity time variance equal to zero.
E. They are used in activities-on-nodes (AON) network diagrams.
E. They are used in activities-on-nodes (AON) network diagrams.
Dummy activities are not used in AON networks.
Shortening activity durations is called:
A. Expediting
B. Crashing
C. Vendor management
D. Null nodes
E. Trade-off analysis
B. Crashing
Crashing an activity shortens its duration.
Which of the following is determined as a direct result of computing the earliest starting and finishing times for the activities of a project network?
A. expected project duration
B. activity slack time
C. which activities are on the critical path
D. variance in project duration
E. maximum project duration
A. expected project duration
The largest value in the EF column is the project’s expected duration.
In project network analysis, “slack” refers to the difference between:
A. observed and predicted times
B. optimistic and pessimistic times
C. mean and modal times
D. finish and start times
E. latest and earliest times
E. latest and earliest times
Slack is the difference between latest and earliest times.
In the probabilistic approach to project network analysis, the time estimate annotated “tm” for any activity is the:
A. mean time
B. median time
C. most likely time
D. mode time
E. marginal time
C. most likely time
The most likely time is denoted tm.
The basis for use of the beta distribution in PERT is:
A. essentially theoretical.
B. its adaptability.
C. its symmetry.
D. It is bimodal.
E. It can easily be converted to a normal distribution.
B. its adaptability.
The beta distribution works well across a variety of circumstances in project management.
When developing probabilistic estimates of project duration, it is necessary to know which of the following?
A. the mean and variance of every activity
B. the mean and variance of activities on the critical path
C. the standard deviation of activities on the critical path
D. each activity’s probability of completion
E. the distribution of activity times
A. the mean and variance of every activity
Even non-critical path activities can shape a project’s duration if they have large variance.
The project management strategy of injecting additional resources in order to reduce the length of the project is called:
A. expediting
B. rushing
C. panicking
D. crashing
E. loading
D. crashing
Crashing a project reduces its duration.
In “crashing” a project, a manager will generally focus on activities which:
A. are not on the critical path
B. are the least costly to crash
C. are costly to crash and are on the critical path
D. are on the critical path and are the least costly to crash
E. are the easiest to crash
D. are on the critical path and are the least costly to crash
The manager must take care to consider critical paths that emerge as the project is shortened.
At which point does crashing of a project cease?
A. when the project is completed
B. when no additional crashing is possible
C. when the cost to crash equals or exceeds the benefit of crashing
D. when the project is one-half completed
E. none of the above
C. when the cost to crash equals or exceeds the benefit of crashing
At that point, additional expenditures do not pay off.
Which of the following are advantages of PERT?
(I) It is visual.
(II) It is automatically updated.
(III) Activities that need to be watched closely can be identified.
A. I and II
B. II and III
C. III only
D. I and III
E. I, II, and III
D. I and III
PERT provides valuable information regarding which activities need to be closely watched.
Which of the following are limitations of PERT?
(I) Time estimates may include a fudge factor.
(II) Important activities may be overlooked.
(III) It is an after-the-fact analysis.
A. I and II
B. I, II, and III
C. I and III
D. II and III
E. I only
A. I and II
PERT analysis is done before the project is begun.
Which of the following is not a limitation of PERT and similar project-scheduling techniques?
A. They force the manager to organize and quantify information.
B. One or more important activities may be omitted from the network.
C. Precedence relationships may not all be correct as shown.
D. Time estimates may contain a “fudge factor.”
E. The use of a computer is essential for large projects.
A. They force the manager to organize and quantify information.
Forcing the manager to organize and quantify information is a benefit, not a limitation.
Gantt charts are most closely associated with
A. JIT
B. PERT
C. MRP
D. MRPII
E. Six Sigma
B. PERT
Gantt charts can be useful in project management.
Which of the following is not characteristic of good risk management?
A. estimating the likelihood of chance events occurring.
B. planning to eliminate chance events.
C. identifying potential chance events.
D. formulating contingency plans in the event of chance events.
E. analyzing the consequences of chance events.
B. planning to eliminate chance events.
Chance events cannot be completely eliminated by superior planning.
Which of the following lead to simulation being a useful tool with uncertain activity times.
A. paths that aren’t independent
B. activity times that aren’t deterministic
C. activity times that can’t be crashed
D. non-critical paths that have no variability
E. critical paths with activities with deterministic time estimates
A. paths that aren’t independent
Non-independent paths make simulation useful.
Which of the following is not an element of the project management triangle?
A. cost
B. schedule
C. resources
D. quality
E. performance objectives
C. resources
Resources are not part of the project management triangle.
If an activity is determined to be on the critical, that means that it, and perhaps other, will affect project ____________.
A. direct costs
B. performance
C. quality
D. conflict
E. duration
E. duration
Critical path activities are those activities upon which project duration depends.

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