Project Management Practitioner

This is part of the Cost Reimbursable Contract Type which is one of the tools and techniques of the Plan Purchases and Acquisitions.

As per Cost Reimbursable contract, all the allowable costs to produce the products or services (deliverables) of the project is charged to the buyer of the contract. As a nature of this contract buyer carrys the bigger risk as the total cost is uncertain.

The Cost Plus Fixed Fee (CPFF), the seller is reimbursed all the allowable cost plus a fixed fee upon successfull completion of the contract. Cost is uncertain and Fee is fixed in this contract.

Pros
1. Allows the buyer to keep the fee fixed

Cons
1. Seller will not motivated to control the cost of the project as their fee is fixed

-Posted by Dhana

Refer Exam Tips 3 - Key terms for PMP Exam for more key terms

This is part of the Cost Reimbursable Contract Type which is one of the tools and techniques of the Plan Purchases and Acquisitions.

As per Cost Reimbursable contract, all the allowable costs to produce the products or services (deliverable) of the project is charged to the buyer of the contract. As a nature of this contract buyer carries the bigger risk as the total cost is uncertain.

The Cost Plus Fee (CPF) is also known as Cost Plus Percentage Of Cost (CPPC).  In this contract, the seller is reimbursed all the allowable cost plus a fee usually some agreed upon percentage of the cost. Both Fee and Cost are variable in this contract.

Pros
1. Buyer can make scope change

Cons
1. Total costs are unknown to buyer
2. Seller will not motivated if the costs are low
3. Seller will not motivated to control the cost of the project as this will lower their fee

-Posted by Dhana

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The Cost of Quality (COQ) is the total cost to produce the product or service (deliverable) of the project based on the quality standards defined for the project.

These costs include the corrective works done to meet the quality standards. Mainly three types of costs are associated with the cost of quality.

1. Prevention Cost
2. Appraisal Cost
3. Failure Cost
   a. Internal Failure cost
   b. External Failure cost

-Posted by Dhana

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This is one of the Direct and Manage Project Execution inputs.

Corrective actions are the steps taken to get the anticipated future project outcomes to align with the project plan. Simply saying, Actions which are required to put back the derailed train back into the track.

During the project execution, several surprises will pop-up and some of them have the potential to damage or not meeting the project objective. Project team or PM have to take the corrective actions to correct them.

The corrective actions can be applied only after the proper approval and it will be known as Approved Corrective Action.

-Posted by Dhana

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This is an quality technique and also called as Kaizen Approach. Kaizen means Continuous Improvement in Japanese.

The approach requires everyone in the organization watching for the ways or opportunities to improve quality. It involves taking steps, improving or redefining processes, creating systematic approaches/processes, reducing defects, eliminating errors. TQM and Six Sigma are examples for the continuous improvement.

-Posted by Dhana

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It is one of the tools and techniques of the Develop Project Team. This is one of the method used by the PMs to motivate their team members.

Contingency Theory was built on the combination of Theory Y and the Hygiene Theory. According to Contingency Theory, people are motivated to achieve levels of competency and will continue to be motivated even after competency is reached.

-Posted by Dhana

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Discounted Cash Flow is a Technique usually used in estimating Cost while project selection.

This will compare the value of the future cash flows of the project to today’s dollors using time value of money techniques.

Discounted Cash flow is calculated and compared against selection of projects. Use PV formula to the considered projects and compare discounted cash  flows of all projects against each other to make a decision in selection process.

Lets us discuss with an example:
Project X is expected to make $50,000 in two years. Project Y is expected to make to $80,000 in three years. If the cost of capital is 5 percent, which project to choose?

Using PV formula, PV = FV / (1 + i) ⁿ ,  PV for Project X is $69,107 and Project Y is $45,351.

Project Y will return the highest investment to the company and should be chosen over Project X. 

-Posted by Sundar  

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Constraints are anything that restricts or limits the actions of the project team.

It is PM responsibility to identify the constraints and document them. It will help the PM in planning phase to manage and drive the project well.

Some of the common constraints are

1. Time
2. Budget
3. Quality
4. Schedule
5. Technology

-Posted by Dhana

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Design of Experiments is one of the key Tools and Technique of Qulaity Planning Process.

Design of Experiments (DOE) is a statistical technoque that identifies the elements or variables that will have the greatest effect on overall project outcomes. It is usually used concerning the project’s product but can be also applied to project management processes to examine trade-offs.

DOE will equips the project manager with a statistical framework that allows to change important variables at once insted of changing variable at a time.

DOE determines what variables has the greatest effect on the project outcome and helps to optimise the process.  

-Posted by Sundar

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Confrontation is one of the conflict resolving methods.

Conflicts usually occurs between more than one parties and once the conflict occurred and brought to PM attention, its his/her responsibility to resolve the conflict favouring to the interest of the project.

Confrontation is based on the assumption of “One right solution exist for the problem”. The PM gathers all facts related to the conflict with the help of conflicting parties and presents before them to make the decision.

This is always a permanent solution and most favoured techniques used by the PMs to solve the conflicts.

-Posted by Dhana

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