THE BATHTUB PERIOD The award of the Scott contract on January 3, 1987, left Park Industries elated. The Scott Project, if managed correctly, offered tremendous opportunities for follow-on work over the next several years. Park’s management considered the Scott Project as strategic in nature. The Scott Project was a ten-month endeavor to develop a new product for Scott Corporation. Scott informed Park Industries that sole-source production contracts would follow, for at least five years, assuming that the initial R&D effort proved satisfactory. All followon contracts were to be negotiated on a year-to-year basis. Jerry Dunlap was selected as project manager. Although he was young and eager, he understood the importance of the effort for future growth of the company. Dunlap was given some of the best employees to fill out his project office as part of Park’s matrix organization. The Scott Project maintained a project office of seven full-time people, including Dunlap, throughout the duration of the project. In addition, eight people from the functional department were selected for representation as functional project team members, four full-time and four half-time. Although the workload fluctuated, the manpower level for the project office and team members was constant for the duration of the project at 2,080 hours per month. The company assumed that each hour worked incurred a cost of $60.00 per person, fully burdened. At the end of June, with four months remaining on the project, Scott Corporation informed Park Industries that, owing to a projected cash flow problem, follow-on work would not be awarded until the first week in March (1988). This posed a tremendous problem for Jerry Dunlap because he did not wish to break up the project office. If he permitted his key people to be assigned to other projects, there would be no guarantee that he could get them Figure P15-31C TIME CUMULATIVE COSTS, $ TIME LINE BCWS BCWP CASE STUDIES c15.qxd 1/21/09 7:24 PM Page 708 Case Studies 709 back at the beginning of the follow-on work. Good project office personnel are always in demand. Jerry estimated that he needed $40,000 per month during the “bathtub” period to support and maintain his key people. Fortunately, the bathtub period fell over Christmas and New Year’s, a time when the plant would be shut down for seventeen days. Between the vacation days that his key employees would be taking, and the small special projects that his people could be temporarily assigned to on other programs, Jerry revised his estimate to $125,000 for the entire bathtub period. At the weekly team meeting, Jerry told the program team members that they would have to “tighten their belts” in order to establish a management reserve of $125,000. The project team understood the necessity for this action and began rescheduling and replanning until a management reserve of this size could be realized. Because the contract was firm-fixed-price, all schedules for administrative support (.
Web & Social Media Analytics Previous Year Question Paper.pdf
THE BATHTUB PERIOD The award of the Scott contract on January 3, 1.docx
1. THE BATHTUB PERIOD The award of the Scott contract on
January 3, 1987, left Park Industries elated. The Scott Project,
if managed correctly, offered tremendous opportunities for
follow-on work over the next several years. Park’s management
considered the Scott Project as strategic in nature. The Scott
Project was a ten-month endeavor to develop a new product for
Scott Corporation. Scott informed Park Industries that sole-
source production contracts would follow, for at least five
years, assuming that the initial R&D effort proved satisfactory.
All followon contracts were to be negotiated on a year-to-year
basis. Jerry Dunlap was selected as project manager. Although
he was young and eager, he understood the importance of the
effort for future growth of the company. Dunlap was given some
of the best employees to fill out his project office as part of
Park’s matrix organization. The Scott Project maintained a
project office of seven full-time people, including Dunlap,
throughout the duration of the project. In addition, eight people
from the functional department were selected for representation
as functional project team members, four full-time and four
half-time. Although the workload fluctuated, the manpower
level for the project office and team members was constant for
the duration of the project at 2,080 hours per month. The
company assumed that each hour worked incurred a cost of
$60.00 per person, fully burdened. At the end of June, with four
months remaining on the project, Scott Corporation informed
Park Industries that, owing to a projected cash flow problem,
follow-on work would not be awarded until the first week in
March (1988). This posed a tremendous problem for Jerry
Dunlap because he did not wish to break up the project office. If
he permitted his key people to be assigned to other projects,
there would be no guarantee that he could get them Figure P15-
31C TIME CUMULATIVE COSTS, $ TIME LINE BCWS
BCWP CASE STUDIES c15.qxd 1/21/09 7:24 PM Page 708
Case Studies 709 back at the beginning of the follow-on work.
2. Good project office personnel are always in demand. Jerry
estimated that he needed $40,000 per month during the
“bathtub” period to support and maintain his key people.
Fortunately, the bathtub period fell over Christmas and New
Year’s, a time when the plant would be shut down for seventeen
days. Between the vacation days that his key employees would
be taking, and the small special projects that his people could
be temporarily assigned to on other programs, Jerry revised his
estimate to $125,000 for the entire bathtub period. At the
weekly team meeting, Jerry told the program team members that
they would have to “tighten their belts” in order to establish a
management reserve of $125,000. The project team understood
the necessity for this action and began rescheduling and
replanning until a management reserve of this size could be
realized. Because the contract was firm-fixed-price, all
schedules for administrative support (i.e., project office and
project team members) were extended through February 28 on
the supposition that this additional time was needed for final
cost data accountability and program report documentation.
Jerry informed his boss, Frank Howard, the division head for
project management, as to the problems with the bathtub period.
Frank was the intermediary between Jerry and the general
manager. Frank agreed with Jerry’s approach to the problem and
requested to be kept informed. On September 15, Frank told
Jerry that he wanted to “book” the management reserve of
$125,000 as excess profit since it would influence his (Frank’s)
Christmas bonus. Frank and Jerry argued for a while, with Frank
constantly saying, “Don’t worry! You’ll get your key people
back. I’ll see to that. But I want those uncommitted funds
recorded as profit and the program closed out by November 1.”
Jerry was furious with Frank’s lack of interest in maintaining
the current organizational membership.
a. Should Jerry go to the general manager?
b. Should the key people be supported on overhead?
c. If this were a cost-plus program, would you consider
approaching the customer with your problem in hopes of relief?
3. d. If you were the customer of this cost-plus program, what
would your response be for additional funds for the bathtub
period, assuming cost overrun?
e. Would your previous answer change if the program had the
money available as a result of an underrun?
f. How do you prevent this situation from recurring on all
yearly follow-on contracts?
Case Studies 709
back at the beginning of the follow-on work. Good project
office personnel are always in
demand.
Jerry estimated that he needed $40,000 per month during the
“bathtub” period to support
and maintain his key people. Fortunately, the bathtub period fell
over Christmas and New
Year’s, a time when the plant would be shut down for seventeen
days. Between the vacation
days that his key employees would be taking, and the small
special projects that his people
could be temporarily assigned to on other programs, Jerry
revised his estimate to $125,000 for
the entire bathtub period.
At the weekly team meeting, Jerry told the program team
members that they would have
to “tighten their belts” in order to establish a management
reserve of $125,000. The project
team understood the necessity for this action and began
rescheduling and replanning until a
management reserve of this size could be realized. Because the
contract was firm-fixed-price,
4. all schedules for administrative support (i.e., project office and
project team members) were
extended through February 28 on the supposition that this
additional time was needed for final
cost data accountability and program report documentation.
Jerry informed his boss, Frank Howard, the division head for
project management, as to
the problems with the bathtub period. Frank was the
intermediary between Jerry and the gen-
eral manager. Frank agreed with Jerry’s approach to the
problem and requested to be kept
informed.
On September 15, Frank told Jerry that he wanted to “book” the
management reserve of
$125,000 as excess profit since it would influence his (Frank’s)
Christmas bonus. Frank and
Jerry argued for a while, with Frank constantly saying, “Don’t
worry! You’ll get your key peo-
ple back. I’ll see to that. But I want those uncommitted funds
recorded as profit and the
program closed out by November 1.”
Jerry was furious with Frank’s lack of interest in maintaining
the current organizational
membership.
a. Should Jerry go to the general manager?
b. Should the key people be supported on overhead?
c. If this were a cost-plus program, would you consider
approaching the customer with
your problem in hopes of relief?
d. If you were the customer of this cost-plus program, what
would your response be for
5. additional funds for the bathtub period, assuming cost overrun?
e. Would your previous answer change if the program had the
money available as a result
of an underrun?
f. How do you prevent this situation from recurring on all
yearly follow-on contracts?
FRANKLIN ELECTRONICS
In October 2003 Franklin Electronics won an 18-month labor-
intensive product development
contract awarded by Spokane Industries. The award was a cost
reimbursable contract with a
cost target of $2.66 million and a fixed fee of 6.75 percent of
the target. This contract would be
Franklin’s first attempt at using formal project management,
including a newly developed proj-
ect management methodology.
Franklin had won several previous contracts from Spokane
Industries, but they were
all fixed-price contracts with no requirement to use formal
project management with
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710 COST CONTROL
earned value reporting. The terms and conditions of this
contract included the following
key points:
6. ● Project management (formalized) was to be used.
● Earned value cost schedule reporting was a requirement.
● The first earned value report was due at the end of the second
month’s effort
and monthly thereafter.
● There would be two technical interchange meetings, one at
the end of the
sixth month and another at the end of the twelfth month.
Earned value reporting was new to Franklin Electronics. In
order to respond to the
original request for proposal (RFP), a consultant was hired to
conduct a four-hour seminar
on earned value management. In attendance were the project
manager who was assigned
to the Spokane RFP and would manage the contract after
contract award, the entire cost
accounting department, and two line managers. The cost
accounting group was not happy
about having to learn earned value management techniques, but
they reluctantly agreed in
order to bid on the Spokane RFP. On previous projects with
Spokane Industries, monthly
interchange meetings were held. On this contract, it seemed that
Spokane Industries
believed that fewer interchange meeting would be necessary
because the information nec-
essary could just as easily be obtained through the earned value
status reports. Spokane
appeared to have tremendous faith in the ability of the earned
value measurement system
to provide meaningful information. In the past, Spokane had
never mentioned that it was
considering the possible implementation of an earned value
7. measurement system as a
requirement on all future contracts.
Franklin Electronics won the contact by being the lowest
bidder. During the planning
phase, a work breakdown structure was developed containing 45
work packages of which
only 4 work packages would be occurring during the first four
months of the project.
Franklin Electronics designed a very simple status report for the
project. The table
below contains the financial data provided to Spokane at the
end of the third month.
Totals at End of Month 2 Totals at End of Month 3
Work
Packages PV EV AC CV SV PV EV AC CV SV
A 38K 30K 36K <6K> <8K> 86K 74K 81K <7K> <12K>
B 17K 16K 18K <2K> <1K> 55K 52K 55K <3K> <3K>
C 26K 24K 27K <3K> <2K> 72K 68K 73K <5K> <4K>
D 40K 20K 23K <3K> <20K> 86K 60K 70K <10K> <26K>
Note: BCWS � PV, BCWP � EV, and ACWP � AC.
A week after sending the status report to Spokane Industries,
Franklin’s project manager
was asked to attend an emergency meeting requested by
Spokane’s vice president for engi-
neering, who was functioning as the project sponsor. The vice
president was threatening to
cancel the project because of poor performance. At the meeting,
the vice president com-
mented, “Over the past month the cost variance overrun has
8. increased by 78 percent from
$14,000 to $25,000, and the schedule variance slippage has
increased by 45 percent
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Case Studies 711
from $31,000 to $45,000. At these rates, we are easily looking
at a 500 percent cost overrun
and a schedule slippage of at least one year. We cannot afford
to let this project continue at
this lackluster performance rate. If we cannot develop a plan to
control time and cost any bet-
ter than we have in the past three months, then I will just cancel
the contract now, and we
will find another contractor who can perform.”
QUESTIONS
1. Are the vice president’s comments about cost and schedule
variance correct?
2 What information did the vice president fail to analyze?
3. What additional information should have been included in the
status report?
4. Does Franklin Electronics understand earned value
measurement? If not, then what
went wrong?
5. Does Spokane Industries understand project management?
6. Does proper earned value measurement serve as a
replacement for interchange
meetings?
9. 7. What should the project manager from Franklin say in his
defense?
TROUBLE IN PARADISE
As a reward for becoming Acme Corporation’s first PMP, Acme
assigned the new PMP, Wiley
Coyote, the leadership role of an important project in which the
timing of the deliverables was
critical to the success of the project. A delay in the schedule
could cost Acme a loss of at least
$100,000 per month. Wiley Coyote’s first responsibility as
project manager was the preparation
of a solicitation package for the selection of an engineering
contractor.
Eight companies prepared bids based on the solicitation
package. Wiley Coyote
decided to negotiate only with the low bidder, who happened to
be at a significantly lower
final cost than the other bidders. The contractor’s project
manager, Ima Roadrunner, would
be handling the negotiations for the contractor. This was a
contractor that Wiley Coyote
had never worked with previously. Wiley Coyote reviewed the
critical information in the
proposal from the contractor:
● All work would be accomplished by engineering.
● Total burdened labor was 2000 hours at $120/hour.
● The duration of the project would be approximately 6 months
and would be
completed in 2006 (labor rates might be different in 2007).
● The contractor’s overhead rate applied was 150 percent for
engineering.
10. ● All of the assigned workers would be at the same pay grade
and would be
assigned full time for the duration of the project.
● Profit requested was 12.5 percent, but subject to negotiations.
● Ima Roadrunner’s salary would be included in the overhead
structure.
● No materials were required.
During negotiations, Ima Roadrunner provided Wiley Coyote
with the salary structure
for engineering, shown in Exhibit 15–1.
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MBA 6951, Managing Complex Projects 1
Course Learning Outcomes for Unit V
Upon completion of this unit, students should be able to:
5. Evaluate sources of project risk strategies.
5.1 Evaluate the sources of project risk.
5.2 Develop strategies that would decrease risk within a project.
6. Assess proven scheduling techniques.
6.1 Develop a project management schedule.
6.2 Explain scheduling techniques used by project managers.
11. 7. Explain the steps involved in building a project’s budget.
7.1 Analyze the cost projections completed by a company.
7.2 Develop an effective cost projection analysis for a company.
Course/Unit
Learning Outcomes
Learning Activity
5.1
Unit Lesson
Chapter 13: Pricing and Estimating, pp. 453-488
Chapter 14: Cost Control, pp. 501-513
Unit V Case Study
5.2
Unit Lesson
Chapter 13: Pricing and Estimating, pp. 453-488
Chapter 14: Cost Control, pp. 501-513
Unit V Case Study
6.1
Unit Lesson
Chapter 13: Pricing and Estimating, pp. 453-488
Chapter 14: Cost Control, pp. 501-513
Unit V Case Study
6.2
12. Unit Lesson
Chapter 13: Pricing and Estimating, pp. 453-488
Chapter 14: Cost Control, pp. 501-513
Unit V Case Study
7.1
Unit Lesson
Chapter 13: Pricing and Estimating, pp. 453-488
Chapter 14: Cost Control, pp. 501-513
Unit V Case Study
7.2
Unit Lesson
Chapter 13: Pricing and Estimating, pp. 453-488
Chapter 14: Cost Control, pp. 501-513
Unit V Case Study
Reading Assignment
Chapter 13: Pricing and Estimating, pp. 453–488
Chapter 14: Cost Control, pp. 501–513
UNIT V STUDY GUIDE
Pricing and Cost Considerations
13. MBA 6951, Managing Complex Projects 2
UNIT x STUDY GUIDE
Title
Unit Lesson
Pricing is one of the most strategic segments of the project
management process. Accepted bids are the
result of carefully researched, developed, and well-thought-out
pricing strategies. While a low price is
perceived positively, too low of a price can be a signal of
inadequate research or even deception on the part
of the bidder. Companies need to continuously innovate pricing
methodologies and strategies in order to stay
current and relevant while, at the same time, maintaining best
practices.
Estimates tend to be the product of comprehensive research of
best available information, the cost estimate
relationship (CER), or the use of a cost model. The cost model
tends to be a by-product of the CER, which is
typically composed of mathematical equations based on
regression analysis, cost-quantity relationships, cost-
cost relationships, and/or cost-non-cost relationships.
Beginning with a very basic type of estimate, the order of
magnitude analysis is conducted. Finally, the
definitive estimate that includes the engineering data and is the
most comprehensive with a variance of only
5%. As a company is compiling the pricing of a project,
reporting must be built into the process. These reports
include cost breakdowns by task, department, month, year,
functional costs, monthly labor hours, raw
14. material expenditures, and total project costs on a monthly
basis. These reporting functions provide not only a
good overview of project costs-to-date but also a basis for
prioritizing projects within companies that are
looking to control costs and/or reduce costs.
Costing out projects is complicated because the cost of inputs
and services are continuously changing over
the course of the project. The budget is the result of the
planning cycle. Essentially, it must be reasonable,
reachable, and a result of continuously negotiated costs within
the statement of work (SOW).
Once the budget has been established and accepted, cost control
must be implemented. This assumes that
the project manager is not only monitoring costs and recording
data but also completing a continuous analysis
of the costs and taking corrective actions in order to reach the
project goals within the designated budget.
Implementing effective cost management control includes
several details as outlined in the interactive
element below.
Click here to access the interactive slide.
Click here to access the transcript for the interactive slide.
Additionally, as things are changing, the project manager does
not always have control over these factors.
This can cause delays, and the cost of the project will probably
escalate as well. Click the link below to view a
video that provides tips on keeping your project budget under
control.
Project Management Videos. (2011, November 11). Project cost
management tips: Keeping your project
15. budget under control [Video file]. Retrieved from
https://www.youtube.com/watch?v=oXhgwn-girI
Click here to access the transcript for the video above.
The earned value measurement system (EVMS) is a system
intended to provide a system of project
management (vs. just project monitoring). The basic idea behind
this process is that each task would be
assigned an earned value that serves the purpose of integrating
cost, schedule, risk management, and
performance management. This process quickly identifies
glitches or variances from the original plan that
enables project managers to pivot and make adjustments before
the issues become so large and costly to the
overall project.
As reporting is an important part of the communication process,
there are four typical reports used in the
project management industry.
Click here to access the interactive slide explaining the four
types of reports.
Click here to access the transcript for the interactive slide.
Within the parameters of exceptional research, estimating, and
project manager processes, cost problems
can still occur. These can be a result of inaccurate estimating
resulting in unrealistic budgets. Many times, this
is a result of overzealous project managers attempting to win a
bid regardless of the subsequent project
consequences. Inappropriate sequencing of activities makes the
entire process inefficient with respect to the
https://online.columbiasouthern.edu/bbcswebdav/xid-
77177364_1
17. able to present a solution. The industry has been plagued with
misconduct; see examples below of
misconduct below:
kickbacks with no regard of quality of
product/service,
ing unsafe designs or materials (in lieu of lower costs),
As with all ethical situations, there are so many gray areas
within this discussion. At the end of the day, it is
really a question of whether or not the act was intentional or
accidental. Project management organizations
can actually take actions against unethical behaviors. The first
action would be training to provide an
organization with an understanding of exactly what is ethical
and what is unethical within the organization.
The implementation of policies and procedures provides a
normal and consistent check system within the
organization. This communicates expectations and a process for
misconduct or engaging in unethical
practices. Finally, instilling a culture within the organization
that promotes ethical behavior at all times is
crucial. This must also be modeled from the top down (no
18. matter the size of the organization). If the CEO is
practicing unethical behavior, how can he or she expect
employees to be ethical?
Related to ethical behavior is the resolution of conflicts within
the project management team. Even with the
highest level of communication and preparedness, conflict is
bound to happen. Humans will have differences
of opinion that actually, if managed correctly, can be a positive
thing. Differing opinions provide for diversity of
thought, innovativeness within the project, new background and
information, and different alternatives to
consider. This can all lead to better solutions to the client’s
challenges. Several common sources of conflict
are identified below.
Source Description
Work Scope Differences related to how much work should be
done, how it should
be done, or at what level of quality the work should have
Resource Assignments Differences over who is assigned to what
tasks
Schedule Differences about sequencing activities
Cost Differences based upon how much tasks should cost
Priorities Differences when workers have multiple projects and
cannot agree
on priorities
Organizational Issues Differences in reporting/approval
necessities or poor communication
19. Stakeholder Issues Differences in opinions on the importance of
certain aspects of
project
Personal Differences Differences resulting from simple human
values, attitudes,
perceptions, and/or personalities
Effectively managing these areas of conflict within the project
management process is an indicator of a good
project manager. Collaborating and confronting with an eye on
problem-solving usually brings forward the
best results. Attempting to engage all interested parties in a
team problem-solving venue provides all
members with the opportunity to voice their opinions and move
toward resolution of the conflict.
MBA 6951, Managing Complex Projects 1
Course Learning Outcomes for Unit IV
Upon completion of this unit, students should be able to:
4. Create a network diagram that considers precedence
diagramming and work sequence.
4.1 Prepare a network diagram that demonstrates your
recommended work sequence for a project
20. within a company.
5. Evaluate sources of project risk strategies.
5.1 Explain the risks involved with a recommended work
sequence of a project.
6. Assess proven scheduling techniques.
6.1 Assess the advantages and disadvantages of two scheduling
techniques.
Course/Unit
Learning Outcomes
Learning Activity
4.1
Unit Lesson
Chapter 12: Network Scheduling Techniques
Unit IV Case Study
5.1
Unit Lesson
Chapter 12: Network Scheduling Techniques
Unit IV Case Study
6.1
Unit Lesson
Chapter 12: Network Scheduling Techniques
Unit IV Case Study
Reading Assignment
21. Chapter 12: Network Scheduling Techniques
Unit Lesson
The next step in the process is the actual scheduling of the
project and the various tasks that need to be
accomplished in order to help achieve the overall goals. The
first step is the compilation of the project network
diagram (PND) that demonstrates the work sequence of the
tasks that need to be completed and how long it
will take to complete each of the tasks along with their
dependencies on other tasks. This interdependence
creates complexities in the scheduling, particularly as you are
dealing with human tendencies. Within the
charting process of the PND, the process begins with the start
mode, which identifies the first task that will
begin the process. When compiling the diagram, you need to
draw connections between the tasks and their
dependencies.
Network scheduling techniques provide project planners with
the basics for all planning and predicting and a
nice visual of how they will be using their resources. This tool
provides a solid overall organization of the tasks
by providing a basis for alternative decision-making, a structure
for reporting, and a clear demonstration of
how all the tasks are interrelated. It also provides an
identification of the risks associated with the project, how
to plan for them, and how to manage them as they occur. Risk
management suggests that the project
manager will identify, assess, and prioritize the risks, allocating
resources as necessary. At the end of the
day, it is really all about minimizing the probability of certain
22. risks even occurring.
UNIT IV STUDY GUIDE
Scheduling Projects
MBA 6951, Managing Complex Projects 2
UNIT x STUDY GUIDE
Title
Taking this a step further, there are more sophisticated methods
of scheduling used by companies today.
These include the Gantt chart, milestone chart, line of balance,
networks, program evaluation and review
technique (PERT), arrow diagram method (ADM), precedence
diagram method (PDM), and graphical
evaluation and review technique (GERT).
The Gantt chart was introduced in Unit III as an effective
method of charting the sequence of tasks involved in
a project. Looking at this technique in detail, the disadvantage
is that interdependencies between events are
not identified and included in the overall chart. The PERT
analysis utilizes statistical principles to come up
with a model of how much time and cushion to include in a
project. This analysis is widely used primarily
because it quickly identifies the interdependencies and issues
that might not be as clear with other planning
23. methods. The inclusion of statistics involves the probability of a
task being accomplished on time. The GERT
analysis is very similar to the PERT in principle with the
additional advantage being that it is able to include
multiple project results through the branching of tasks.
Click the link below to see an interactive lesson on the
scheduling process. You will see a summary of the
elements involved in the scheduling process for a project
manager.
Click here to access the interactive slide.
Click here to access the transcript for the above interactive
slide.
While the process seems systematic, challenges can quickly
become apparent. Some of these challenges are
uncontrollable by the project manager such as organizational
indecisiveness or internal management issues.
On the other hand, there are challenges within the scheduling
process itself. These could include unrealistic
estimates on the part of the client with respect to the amount of
effort, duration, and resources allocated to
this project. Typically, the estimates are low and make it
incredibly difficult to reach the objectives of the
project. Sometimes, this involves sharing resources across
several projects or overcommitted resources.
Employee workload imbalances might be impossible to manage
when certain employees assigned to a task
are overloaded while are not. Another recurring challenge is
frequent changes to the WBS that are a result of
the client changing the scope of the project. This is a touchy
situation because the project manager needs to
manage the relationship with the client but also manage the
realities of completing the project at a quality
level and in a timely manner.
24. So, how might a project manager work around these challenges?
Tangible ideas for managing this process is
included in the interactive slide below.
Click here to access the interactive slide.
Click here to access the transcript for the interactive slide
above.
Project management tracking and reporting can benefit from the
use of project management software. This
can expedite the process, decrease human error, and provide
increased efficiencies. Several top project
management software programs include Smartsheet, Mavenlink,
Robohead, Wrike, Workfront, Accelo,
ProWorkflow, Freshdesk, and Jira software. Each has a series of
project management scheduling, file
sharing, reporting, client approval, and presentation functions.
Besides functionality, each varies on
complexity and cost. Understanding the client needs will enable
the project management team to utilize the
software package that will most effectively serve the needs of
both their team as well as their clients.
Project Management Institute (PMI) Project Management
Certification Exam
As we are now halfway through this course, there needs to be a
level of understanding on the PMI Project
Management Certification exam. By now, you have realized that
each chapter of the textbook includes
several pages reviewing the principles of that chapter’s topic
that will aide you as you look toward passing the
PMI Project Management Certification exam. The Project
Management Professional (PMP) is an
internationally recognized professional designation offered by
25. the PMI. Passing this exam awards the PMP
certification, which is the most important industry-recognized
certification for project managers in the world.
The purpose of the exam is to improve the success rate of
projects standardizing processes and the base of
knowledge in the industry. Additionally, it tends to provide
higher salary levels and career growth for project
managers. The exam is based on the Project Management Body
of Knowledge (PMBOK). Prior to completing
this exam, the exam-taker must fulfill one of the two
prerequisite groupings below:
https://online.columbiasouthern.edu/bbcswebdav/xid-
77177357_1
https://online.columbiasouthern.edu/bbcswebdav/xid-
77175530_1
https://online.columbiasouthern.edu/bbcswebdav/xid-
77177361_1
https://online.columbiasouthern.edu/bbcswebdav/xid-
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MBA 6951, Managing Complex Projects 3
UNIT x STUDY GUIDE
Title
First Prerequisite Grouping Second Prerequisite Grouping
This requires the exam-taker to have completed a
26. secondary degree, 7,500 documented hours
leading/directing projects, and 35 hours of project
management education.
This requires the exam-taker to have completed a
4-year degree, 4,500 documented hours
leading/directing projects, and 35 hours of product
management education as the prerequisite for the
exam.
As noted earlier, completion of this certification is beneficial
for both the project manager and the company
utilizing the project management services. From an industry
standpoint, the more project managers who take
this exam and have the PMI Certification, the more consistent
and performance-driven the industry as a
whole will become.