This document provides the questions and answers to Liberty University's BUSI 313 Quiz 3. It covers key concepts in project risk management and project scheduling including: defining risks, the risk management process, risk assessment tools, risk responses, resource constraints, time constraints, resource leveling, and time-phasing project budgets. Some multiple choice questions assess understanding of these concepts, such as defining different types of constraints, steps in the risk process, and responses to address identified risks.

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Question 1 The attempt to recognize and manage potential and unforeseen trouble spots that
may occur when a project is implemented is known as
Question 2 Enhancing a risk is a tactic that seeks to eliminate the uncertainty associated with an
opportunity to ensure that it definitely happens.
Question 3 Fixedprice contracts are an example of transferring risk from an owner to a contractor.
Question 4 Which of the following is NOT included in a Failure Mode and Effects Analysis?
Question 5 After your team has successfully identified potential risks that could affect the project,
what is the next step?
Question 6 Adopting proven technology instead of experimental technology is an example of
mitigating a risk.
Question 7 If, during risk response development, you successfully identify how you will respond to
a risk, contingency planning is unnecessary.
Question 8 The probability that a risk event will occur is higher during the initial stages of a
project.
Question 9 Regina's boss has told her that her project is very important. If the critical path is
delayed, she will be given whatever she needs to get it back on schedule. Her project is classified
as ________ constrained.
Question 10 Gene is trying to order the concrete needed to continue his project. However, the
supplier will not be able to deliver it until next week. This is an example of what kind of resource
constraint?
Question 11 Rachel is working on a project that technically allows three activities to be done at
the same time. If they were to be implemented at the same time, she would need 5 contractors in
order for the activities to be completed on time. There are only 3 available for her to use. This is

2. an example of what type of constraint?
Question 12 Project budgets are developed by timephasing which of the following?
Question 13 If resources are truly limited and activity time estimates are accurate, the
resourceconstrained schedule will materialize as the project is implemented, not the
timeconstrained schedule.
Question 14 When resource constraints are added to technical constraints the original project
network may change as well as the completion date.
Question 15 In a resourceconstrained project, the first priority in assigning resources is usually
given to activities with the
Question 16 Sequential activities hold just as much potential for resource conflicts as parallel
activities.
Question 17 These are all guidelines a project manager should consider when assigning project
work EXCEPT
Question 18 The higher the cost slope of an activity the lower the cost to reduce its duration.
Question 19 One of the advantages of using a Project CostDuration Graph is that it keeps the
importance of indirect costs in the forefront of decision making.
Question 20 When reducing project duration, there will always be an optimum cost time point
where the total cost of the project is less than it was when the project was initially planned under
normal conditions.
Question 21 When reducing project duration, the crash cost per unit has to be calculated and the
maximum units each activity can be reduced must be known. After this, the critical path must be
identified. What is the next step?
Question 22 The cost slope of an activity is calculated by dividing the run by the rise.
Question 23 According to Brooks' Law, adding more people to a late project is most likely to have
which of the following impacts?
Question 24 Reducing project duration
Question 25 As a project is crashed and project duration is reduced, direct costs typically

3. An uncertain event or condition that, if it occurs, has a positive or negative effect on
project objectives is termed a
The chances of a risk event occurring as a project proceeds through its life cycle tend
to
The cost impact of a risk event occurring as a project proceeds through its life cycle
tends to
The attempt to recognize and manage potential and unforeseen trouble spots that may
occur when a project is implemented is known as
Which of the following is NOT one of the steps in the risk management process
The initial step in the risk management process is to
One common mistake made early in the risk identification process is to
Organizations use ____ in conjunction with work breakdown structures to help
management teams identify and eventually analyze risk
Which of the following groups should NOT be a part of the risk identification process?
After your team has successfully identified potential risks that could affect the project,
what is the next step
A list of questions that address traditional areas of uncertainty on a project is termed a
____ focuses on how to respond to events that have a positive impact on a project
Tools such as a risk assessment form and a risk severity matrix are used to
Based on the following, which event should you be most concerned about
____ is a measure of how easy it would be to notice that a risk event was going to
occur in time to take mitigating action, that is, how much warning you would have
Purchasing an accident insurance policy would be an example of responding to a risk
by ____ it
The risk management tool that is divided into three color-coded zones representing
major, moderate, and minor risks is the risk
The risk assessment form contains all of the following EXCEPT
Risks are evaluated in terms of
Adopting proven technology instead of experimental technology in order to eliminate
technical failure would be an example of which risk response
Which of the following activities might you consider adding a time buffer to
Which of the following is NOT included in a Failure Mode and Effects Analysis
A fixed price contract is an example of
Which of the following is NOT one of the potential responses to a specific risk event
A Risk Response Matrix contains all of the following EXCEPT
A key distinction between a risk response and a contingency plan is
The risk associated with the unlikelihood that one of the key members will be struck by
lightning would most likely be handled by which of the following
Funds that are for identified risks that have a low probability of occurring and that
decrease as the project progresses are called ______ reserves
Risks that can result in a system or process that will not work are known as
Which of the following is NOT involved in risk control
Which of the following is identified to cover major unforeseen risks and, hence, are
applied to the total project
Change management systems are designed to accomplish all of the following EXCEPT
An uncertain event or condition that, if it occurs, has a positive or negative effect on
project objectives is known as a ____
The likelihood of a risk event occurring ____ as a project goes through its life cycle
The first step in the risk management process is ____

4. The significance of a risk is assessed in terms of the ____ and the impact of the event
A list of questions that address traditional areas of uncertainty on a project is known as
a
The measurement of how easy it would be to detect that the event was going to occur
in time to take mitigating action is known as
The ____ form identifies each risk event, the likelihood of it occurring, the potential
impact, when it may occur, and the degree of difficulty in detecting it
The ____ matrix is divided into red, yellow, and green zones representing major,
moderate, and minor risks
According to the Failure Mode and Effects Analysis (FMEA), Impact x Probability x
Detection = ____
When considering risk response development, reducing the likelihood that an event will
occur and/or reducing the impact that an adverse event would have on a project is
known as ____ the risk
When considering risk response development, changing the plan to eliminate the risk or
condition is known as ____ the risk
When considering risk response development, passing risk to another party instead of
changing it is known as ____ the risk
When considering risk response development, assuming the risk because the chance
of such an event is slim is known as ____ the risk
Testing a new project on a smaller isolated area prior to installing it for the entire
organization is an example of ____ a risk
Performance bonds, warranties, and insurance are examples of ____ a risk
Choosing to move a concert indoors to eliminate the threat of bad weather is an
example of ____ a risk.
Flooding would be devastating to the project; however, it is very unlikely. The project
manager is most likely to ____ this risk
The event or point in time when a contingency plan will be implemented is called a
____
____ reserves are identified for specific work packages and are distributed by the
project manager and the team members.
____ reserves are controlled by the project manager and the owner of the project and
are used to cover major unforeseen risks to the entire project
A ____ is an alternative that will be used if a possible foreseen risk event becomes a
reality
____ systems involve reporting, controlling, and recording changes to the project
baseline
The probability that a risk event will occur is higher during the initial stages of a project
Risk events that occur in the early stages of a project will have a greater cost impact
than those that occur in later stages
Risk management is a reactive approach that is designed to ensure that surprises are
reduced and that negative consequences associated with undesirable events are
minimized
One common mistake that is made early on in the risk identification process is to focus
on consequences and not on the events that could produce consequences
The project being delayed is an example of a major risk that should be assessed
The first step in the risk management process is risk assessment
A risk profile is a list of questions that have been developed and refined from previous,
similar projects
The risk identification process should be limited to just the core project team.

5. While a "can do" attitude is essential during implementation, project managers have to
encourage critical thinking when it comes to risk identification
Responses to all identifiable risks should be a top priority for the project manager
When considering risk value, the lower the value, the higher the level of risk
If, during risk response development, you successfully identify how you will respond to
a risk, contingency planning is unnecessary
Adopting proven technology instead of experimental technology is an example of
mitigating a risk
A risk is an uncertain event that, if it occurs, can have a positive or negative effect on
project objectives
Performance bonds, warranties, and guarantees are financial instruments used to
share risk.
Fixed-price contracts are an example of transferring risk from an owner to a contractor
When developing a response to a risk by scheduling outdoor work in the summer,
investing in up-front safety training, or choosing high-quality materials, these are
examples of retaining a risk
Budget reserves are set up to cover identified risks associated with specific segments
of a project while management reserves are set up to cover unidentified risks
associated with the total project
Change management systems involve reporting, controlling, and recording changes to
the project baseline
Enhancing a risk is a tactic that seeks to eliminate the uncertainty associated with an
opportunity to ensure that it definitely happens
Contingency funding is made up of budget reserves and management reserves
Resources are adequate, but demand varies widely over the life of the project. Delaying
noncritical activities to lower peak demand on resources is known as resource
If resources are not adequate to meet peak demands, the resulting reschedule is
termed
Which of the following is NOT a potential consequence of failing to identify limited
resources before project implementation
When developing a new software package, logically, the software must be designed
before the code is written, and the code must be written before it is tested. These
activities are dependent on each other by ______ constraints
When considering the sequence and timing of activities, which of the following is NOT
one of the types of project network constraints
Sam, the project engineer, has been scheduled to run the product system test at the
same time he is to build a marketing prototype. This is an example of what type of
resource constraint
Susan is to conduct environmental testing but the chamber cannot hold all the
equipment that she wants to test. This is an example of a constraint that could impact
the sequence and timing of activities in a project network. What type of constraint is it
All of the following are types of resource constraints EXCEPT
Gene is trying to order the concrete needed to continue his project. However, the
supplier will not be able to deliver it until next week. This is an example of what kind of
resource constraint
A special truck that George needs on his project has been scheduled on another
project. This is an example of what type of resource constraint?
Most of the scheduling methods available today require the project manager to classify
the project as either _____ constrained or ______ constrained

6. Regina's boss has told her that her project is very important. If the critical path is
delayed, she will be given whatever she needs to get it back on schedule. Her project is
classified as ______ constrained
In reviewing the status of her project with top management, Shirley was told that there
are only two programmers that she can use for her project. Her project is classified as
_______ constrained
All resource leveling techniques involve
Technical constraints have been carefully considered when developing a project
network. Which of the following is true at this point
Rachel is working on a project that technically allows three activities to be done at the
same time. If they were to be implemented at the same time, she would need 5
contractors in order for the activities to be completed on time. There are only 3
available for her to use. This is an example of what type of constraint
Resource leveling or smoothing can have all the following results on a project EXCEPT
Jan is trying to reallocate resources in a time-constrained project to create smoother
resource utilization. She should first identify activities with the
In a resource-constrained project, which of the following is most likely to be changed
In a resource-constrained project, the first priority in assigning resources is usually
given to activities with the
In a resource-constrained project the second priority in assigning resources is usually
given to activities with the
Tony has realized that two activities in his project cannot be done at the same time
because not enough resources are available. Activity 3 is critical and has a duration of
5 days. Activity 4 has 2 days of slack and a duration of 2 days. How will he decide
which activity should be scheduled first
Splitting an activity can result in all of the following EXCEPT
All of the following are benefits of scheduling resources before project implementation
EXCEPT
These are all guidelines a project manager should consider when assigning project
work EXCEPT
When a company will reduce the number of projects they have to manage internally to
only core projects and send noncritical projects to contractors and consulting firms this
is called
Which of the following is NOT one of the more common problems associated with
scheduling multiproject resources
In a resource-constrained project the third priority in assigning resources is usually
given to activities with the
Why is it necessary to have a time-phased budget baseline
Project budgets are developed by time-phasing which of the following
A project budget report is showing our project as spending $35,000 against a budgeted
amount of $40,000. Which of the following is true
Delaying noncritical activities to lower peak demand and, thus, increase resource
utilization is called resource ____
A(n) ________ constraint addresses the sequence in which project activities must
occur even after considering resource constraints
Having one person responsible for performing several activities, all due at the same
time, is an example of a(n) _____ constraint
Trying to renovate a ship compartment that is too small for more than one person is an
example of a(n) _____ resource constraint
A shortage of programmers to write software is an example of a(n) _____ type of
resource constraint

7. The shortage of computer chips to produce a circuit board is an example of a(n)
______ type of resource constraint
If three copiers are needed to produce a final report on time and only two are available,
the project is facing a(n) ________ type of resource constraint
Resource dependency takes priority over the technological dependency but does not
violate _____ dependencies
In order that the new product is on the shelf for the Christmas buying season, the
development of the new product would be classified as a(n) ________ -constrained
project
Beth has two engineers assigned to her project and does not have access to more
even if the result means extending the completion date on her project. She is managing
a(n) ________ -constrained project
All leveling techniques delay noncritical activities by using ________ to reduce peak
demand
When scheduling activities in a resource-constrained project, typically the activity
scheduled first has the ______ amount of slack
Since resource leveling or smoothing delays noncritical activities, a common result is an
increase in network _____
When the work in an activity is interrupted to work on another activity and is then
resumed at a later point in time, it is called ____
In scheduling resource-constrained projects, _____ are typically used rather than
optimum mathematical solutions
When classifying projects, ________ constrained means that project duration is fixed
and resources are flexible
When classifying projects, ________ constrained means that a specific resource is
fixed and the duration of the project is flexible
Start-up and shutdown costs are major considerations when using the ______
scheduling technique
After resource leveling or smoothing one goal is that the amount of resources needed
over the life of the project will be
Many companies are ______ project work to contractors and consultants as a means of
dealing with the peaks and valleys of resource allocation among projects
When a project is classified as resource-constrained and a resource constraint exists,
the project duration is typically ____
In reality resource allocation generally occurs in a(n) ______ environment where the
demands of one project have to be reconciled with the needs of other projects
Without a ____ budget a good project schedule and cost control are impossible
A project cost baseline is also called ____
The fact that you must pour foundation before you frame the house and that you have
to frame the house before you can put on the roof demonstrates scheduling constraints
Too many parallel activities for one individual is an example of a resource constraint
The level of resources each activity will need to be completed in the given amount of
time has been estimated; therefore, there are no resource constraints
Resource leveling or smoothing is only used on projects which are resource
constrained
Resource bottlenecks are one of the three more common problems encountered in
managing multiproject resource schedules
The inability to fit more than two earth movers on a construction site at the same time
when more are needed to complete the activity on time is an example of a physical
constraint
In a resource-constrained project, the completion date is most likely to change.

8. Having too few programmers and too many engineers is an example of a people
resource constraint
If a project needs one earth mover six months from now in order to complete one
activity, and the organization has four such machines, there is no equipment resource
constraint
A lack of readily available engineers is a technical constraint
Resource dependency takes priority over technological dependency but it does not
violate it
To determine if a project is time-constrained or resource-constrained you would consult
the project priority matrix
Sequential activities hold just as much potential for resource conflicts as parallel
activities.
All leveling techniques delay noncritical activities by using positive slack to smooth out
the resource requirements
Since resource leveling or smoothing delays noncritical activities, a common result is a
decrease in network sensitivity
Scheduling projects classified as resource-constrained focuses on completing the
project as soon as possible under the given resource constraints
When resource constraints are added to technical constraints the original project
network may change as well as the completion date
When scheduling activities in a resource-constrained project typically the activity
scheduled first has the most amount of slack
A project budget report is showing our project as spending $35,000 against a budgeted
amount of $40,000. We can assume that everything is going as planned and that we
are under budget
Splitting is a scheduling technique used to get a better schedule or better resource
utilization and should be used without hesitation
Without a time-phased budget a good project schedule and cost control are impossible
If resources are truly limited and activity time estimates are accurate, the resource-
constrained schedule will materialize as the project is implemented, not the time-
constrained schedule
Project managers should always assign the best people to the most difficult tasks
1. The president of a software company remarks in a speech that new technologically advanced
software will be available in one year. This is an example of reducing project duration caused by:
2. Intense global competition and rapid technological advances create pressure on developing
projects rapidly. This is an example of reducing project duration caused by:
3. A contractor finished a bridge across a lake 18 months early and received more than $6 million
for the early completion. This is an example of reducing project duration caused by:
4. Adverse weather, design flaws, and equipment breakdown can create negative slack. This is an
example of reducing project duration caused by:
5. Total project costs include all of the following except:
6. Which of the following is not considered a project indirect cost?

9. 7. Project costs are generally classified as ____ costs.
8. Low-cost, realistic, efficient methods for completing an activity under normal conditions are
supported by ____ time.
9. The shortest possible time an activity can be completed realistically is called ___ time.
10. The most common response for meeting unattainable deadlines is to
11. ____ costs are incurred when completing an activity in its realistically shortest time.
12. An activity's crash costs include ____ costs.
13. Cost slope can be determined by dividing the
14. The less steep the cost slope of an activity, the
15. Which of the following correctly calculates an activity's cost slope?
16. An activity's cost slope represents an activity's
17. In selecting the best activity to reduce you would first select the activity with the
18. The optimum duration for a project is at the point where:
19. Creating a Project Cost-Duration graph is useful:
20. Crashing a project should occur:
21. If a network has several critical or near-critical paths it is deemed to be:
22. The project direct-cost line near the normal point is usually:
23. The relationship between cost and time for various durations is assumed to be:
24. A common method for shortening the project time is to:
25. A positive situation where moving toward the optimum time can result in very real, large
savings—this occurs when the network is:
26. Which of the following is/are included in a Project Cost-Duration Graph?
27. One way of reducing project costs is identifying tasks that _________ can do themselves.
28. The most common method for shortening project time is to
29. Which of the following is not one of the more commonly used options for cutting project

10. costs?
30. Which of the following is the most common method for shortening project time?
31. According to Brooks' Law, adding more people to a late project is most likely to have which
of the following impact?
32. Which of the following is the easiest method for shortening project time?
33. Which of the following is not one of the techniques for accelerating project completion?
34. When the project team is salaried, which of the following is the preferred choice for
accelerating project completion?
35. The Snapshot from Practice "Cell-Phone Wars" is an excellent example of reducing project
duration due to:
36. When a politician makes a public statement that a new building will be available in two years,
a(n) ________ duration has reduced the project duration.
37. Intense global competition and rapid technological advances combine to create a(n) ________
imposed project duration date.
38. The Snapshot from Practice which detailed the Northridge earthquake demonstrated the
importance of reducing a project's ______.
39. Sometimes very high ________ costs are recognized before a project begins and reducing
these costs through shorter project durations becomes a high priority.
40. The ________ project cost is the sum of the indirect and direct costs.
41. Costs such as supervision, administration, consultants, and interest are examples of ________
project costs.
42. Costs such as labor, materials, equipment, or contractors are examples of ________ project
costs.
43. Direct costs are assignable directly to a project ________.
44. Because direct costs are assumed to be developed from normal methods and time, any
reduction in activity time should ________ the cost of the activity.
45. To shorten the duration of a project the project manager should limit the choices of activities
to just those which ________.
46. The ________ time for an activity represents low-costs, realistic, efficient methods for
completing the activity under typical conditions.

11. 47. Shortening an activity is called ________.
48. The direct costs for completing an activity as early as possible is called its ________.
49. An activity's ________ is calculated by dividing the rise by the run.
50. Subtracting an activity's normal cost from the crash cost will calculate an activity's ________.
51. Subtracting an activity's crash time from the normal time will calculate an activity's ________.
52. When considering whether to move the project to its optimum cost-time position, the manager
should also consider ________.
53. A network is considered to be ________ if it has a predominate critical path with no other
path close in terms of slack.
54. The easiest way to add more resources to a project is not to add more people, but to schedule
________.
55. According to ________,adding more manpower to a late software project makes it later.
56. The easiest way to add more labor to a project is not to add more people, but to add
___________.
57. ____________ is the rearranging of the project network logic so that critical activities are
done in parallel rather than sequentially.
58. ___________ is probably the most common response for meeting unattainable deadlines.
59. In the "I'll Bet You..." Snapshot from Practice, the draftsman won ___________ for making a
very difficult deadline.
60. A rule of thumb for moderate- to high-technology firms is that a six-month delay in bringing
a product to market can result in a gross profit loss of about 35 percent.
61. Imposed project durations almost always leads to a higher-cost project than one planned with
detailed scheduling of all the project's activities.
62. Managers have several effective methods for crashing specific project activities when
resources are not constrained.
63. Indirect costs generally represent overhead costs such as supervision, administration,
consultants, and interest.
64. The total cost for each possible duration of a project is the sum of labor, materials, and
equipment.
65. Direct costs are so named because they can be assigned directly to a work package and

12. activity.
66. Because direct costs are assumed to be developed from normal methods and time, any
reduction in activity time should add to the costs of the activity.
67. The sum of the costs of all the work packages represents the total direct costs for the project.
68. Incentive contracts can make reduction of project time rewarding—usually for both the
project contractor and owner.
69. Shortening an activity's duration is termed crashing.
70. Expected time for an activity represents low-cost, realistic, efficient methods for completing
the activity under anticipated conditions.
71. Crash cost is the incremental cost incurred when an activity is reduced in duration.
72. The cost slope of an activity is calculated by dividing the run by the rise.
73. Crash time is the greatest time reduction possible under realistic conditions.
74. The higher the slope of an activity the greater the cost to reduce its duration.
75. Creating a Project Cost-Duration Graph in the pre-project planning phase without an imposed
duration is the best time to use this tool.
76. Crashing a more expensive activity may be wise if fewer inherent risks are involved.
77. A project network is classified as sensitive if it has a large number of interacting paths.
78. Collecting crash times for a moderate-size project is relatively easy.
79. While the relationship between normal and crash times is really curvilinear, the assumption
that it is linear is seldom a concern for practicing managers.
80. The accuracy of crash times and costs is frequently rough at best, when compared with
normal time and cost.
81. One of the advantages of using a Project Cost-Duration Graph is that it keeps the importance
of indirect costs in the forefront of decision making.