Project Management Professional (PMP) Predictive (Plan-Driven) Project Management Flashcards

24 sample cards from the Predictive (Plan-Driven) Project Management deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. In a Cost Plus Incentive Fee (CPIF) contract, how is cost overrun/underrun shared?

   The buyer and seller share cost savings or overruns according to a pre-negotiated sharing ratio (e.g., 80/20), and the seller earns an incentive fee for meeting performance targets, subject to maximum/minimum fee limits.

2. What is a point of total assumption (PTA) in a Fixed Price Incentive Fee (FPIF) contract?

   The cost level above which the seller bears all additional costs (100% of overrun). Beyond the PTA, increased costs reduce the seller's profit dollar-for-dollar up to the ceiling price.

3. What does the 'Conduct Procurements' process produce?

   Obtaining seller responses, selecting a seller, and awarding a contract. Key outputs include selected sellers and signed agreements (contracts). Tools include bidder conferences, proposal evaluation, and negotiation.

4. What is the purpose of 'Control Procurements'?

   Managing procurement relationships, monitoring contract performance, making payments and changes/corrections, and closing out contracts. It includes claims administration and procurement performance reviews.

5. What happens when a contract is closed?

   Closing a procurement involves verifying all work and deliverables are acceptable, settling open claims, finalizing payments, formal written acceptance, and documenting lessons learned. Procurements may close before the project ends.

6. What is risk appetite versus risk threshold?

   Risk appetite is the degree of uncertainty an organization is willing to accept in anticipation of a reward. Risk threshold is the specific measurable level of risk exposure above/below which action is taken (the boundary of acceptable variation).

7. Distinguish individual project risk from overall project risk.

   Individual project risk is an uncertain event/condition that, if it occurs, affects one or more project objectives. Overall project risk is the effect of uncertainty on the project as a whole, arising from all sources including individual risks.

8. What is the output of the 'Plan Risk Management' process?

   The risk management plan, which defines how risk activities will be structured and performed: methodology, roles/responsibilities, funding, timing, risk categories (RBS), stakeholder risk appetite, definitions of probability and impact, and the probability-impact matrix.

9. What is a Risk Breakdown Structure (RBS)?

   A hierarchical representation of potential sources of risk (e.g., technical, management, commercial, external), used to categorize and identify risks systematically.

10. What is the risk register and what does it initially contain?

    A document recording details of identified individual project risks. Initially it captures the list of identified risks, potential risk owners, and a list of potential risk responses. It is progressively elaborated with analysis and responses.

11. What is the difference between the risk register and the risk report?

    The risk register documents details of individual project risks. The risk report presents information on sources of overall project risk and summary information on identified individual risks (e.g., distribution and key drivers).

12. What does 'Perform Qualitative Risk Analysis' do?

    Prioritizes individual risks for further analysis or action by assessing their probability of occurrence and impact, typically using a probability-and-impact matrix. It is subjective, fast, and the most common analysis. Output updates the risk register with priorities.

13. What does 'Perform Quantitative Risk Analysis' do?

    Numerically analyzes the combined effect of identified individual risks and other uncertainty sources on overall project objectives (e.g., cost/schedule). Uses techniques like Monte Carlo simulation, decision trees, and sensitivity analysis (tornado diagram).

14. What is Expected Monetary Value (EMV) and its formula?

    EMV is a statistical technique calculating the average outcome when futures are uncertain. EMV = Probability × Impact. Opportunities are positive values, threats negative; summed across outcomes in a decision tree.

15. What is a tornado diagram used for?

    It displays the results of sensitivity analysis, ranking risks/variables by the magnitude of their impact on the project objective so the most influential are shown at the top (widest bars).

16. What are the five strategies for negative risks (threats)?

    Escalate, Avoid, Transfer, Mitigate, and Accept. (Avoid = eliminate the threat; Transfer = shift impact to a third party such as insurance; Mitigate = reduce probability/impact; Accept = acknowledge without proactive action.)

17. What are the five strategies for positive risks (opportunities)?

    Escalate, Exploit, Share, Enhance, and Accept. (Exploit = ensure the opportunity is realized; Share = allocate to a third party best able to capture it; Enhance = increase probability/impact; Accept = take advantage if it occurs.)

18. When is the 'Escalate' risk response strategy used?

    When a threat or opportunity is outside the scope of the project or beyond the project manager's authority. Ownership is transferred to the relevant person/part of the organization (e.g., program or portfolio level), and it is no longer monitored by the project team.

19. What is the difference between active and passive acceptance of a risk?

    Passive acceptance = no action except documenting; deal with it if it occurs. Active acceptance = establishing a contingency reserve (time, money, resources) to handle the risk if it materializes.

20. What is the purpose of the 'Implement Risk Responses' process?

    Carrying out agreed-upon risk response plans, ensuring responses are executed as planned to address overall project risk exposure, minimize threats, and maximize opportunities. It is an executing-process-group activity.

21. What is the goal of 'Monitor Risks'?

    Monitoring implementation of agreed risk response plans, tracking identified risks, identifying and analyzing new risks, and evaluating risk process effectiveness. Tools include risk audits, risk reassessment, and reserve analysis.

22. What is a residual risk versus a secondary risk?

    A residual risk is one that remains after a risk response has been implemented. A secondary risk is a new risk that arises as a direct result of implementing a risk response.

23. What is a workaround in risk management?

    An unplanned response to a risk that was not previously identified or accepted (i.e., a response to an unanticipated event/issue that has occurred), developed reactively rather than from a pre-planned response.

24. What is a fallback plan versus a contingency plan?

    A contingency plan is the planned response executed if a specific identified risk occurs (triggered by a risk trigger). A fallback plan is executed if the contingency plan proves ineffective.

What this deck covers

Predictive (Plan-Driven) Project Management flashcards FAQ