1. “Perform Quantitative Risk Analysis” is the process of numerically analyzing the effect of identified risks on overall project objectives. True or False
  2. “Perform Quantitative Risk Analysis” has following Inputs (Fill in missing lines)
  • __________________
  • Cost Management Plan
  • Schedule Management Plan
  • __________________
  • Enterprise Environmental Factors
  • Organizational Process Assets
  1. Cost Management Plan includes Cost Reserves related to risks. True or False
  2. Schedule Management Plan includes Schedule Reserves related to risks. True or False
  3. In some cases it may not be possible to execute “Perform Quantitative risk Analysis” due to lack of sufficient data to develop appropriate models. True or False
  4. Risk databases that may be available from industry or private sources are not useful in Quantitative Risk Analysis. True or False
  5. For a large project, when performing “Quantitative” risk analysis for overall project duration, the shapes of distributions of activity durations (beta, triangle, uniform, normal, etc.) are very significant. True or False
  6. In a large project, Central Limit Theorem governs the behavior of overall project cost or overall project duration when project individual activity durations or individual activity costs are randomly distributed. True or False
  7. One main assumption in PERT in calculating expected project duration is that all activity duration distributions are independent. This assumption is unlikely to be perfectly valid in practice. True or False
  8. For a large project, overall project duration is usually normally distributed. True or False
  9. The range of cost estimates for various activities in a large project can be gathered by Interview with project members and/or from experts. True or False
  10. Consider The Wedding Plan Project case. Suppose that the wedding gown alteration activity duration will be 2 days with 10% probability; 4 days with 70% probability and 6 days 20% probability (no other durations are possible). This will be an example of a Continuous Probability Distribution. True or False
  11. What is the expected duration and variance of the above activity (in #12)?
  12. Consider the same wedding gown alteration activity. The tailors expect a range of 2 days to 6 days for activity completion with uniform probability (uniform distribution). It means any single time duration between 2 and 6 days (inclusive) have same probability. True or False
  13. What is the probability of any duration between 2 and 6 days (inclusive) for the activity in #14?
  14. Explain briefly Triangle distribution for the above activity that is spread between 2 and 6 days.
  15. Consider an activity A in a project network. A simulation run of 15,000 results in two tornado diagrams –one for Total Project Cost and one for Total Project Duration. In the 1st tornado diagram, A is at the top while in the 2nd tornado diagram, it is at the bottom. What does that mean?
  16. The management of ABC Inc. is considering two projects A and B. They want to select one of these projects based on 1 year data. Project A would require investment of $50,000 (negative cash flow) and yield revenues of $15,000; $25,000 and $32,000 in High, Medium and Low favorable economic conditions. Project B would require investment of $30,000 (negative cash flow) and yield revenues of $10,000; $10,000 and $50,000 in High, Medium and Low favorable economic conditions. Experts have rated the chances of High, Medium and Low favorable economic conditions to be .3; .5; and .2 respectively. What are the EMVs of each project? Which project would you select? (Neglect any time of money).
  17. Time and Cost contingency reserves should not be based on cumulative frequency distributions of Total Project Duration or Total Project Cost respectively. True or False
  18. Risk Response Planning should absolutely not started before “Perform Quantitative Risk Analysis” True or False.