CCM Cost and Time Management 2 — Questions and Answers
Question 1: A construction project has a BAC of $500,000, EV of $200,000, and AC of $250,000. What is the Cost Performance Index (CPI)?
- 0.80 (Correct answer)
- 1.25
- 0.40
- 1.00
Correct answer: 0.80
CPI = EV / AC = $200,000 / $250,000 = 0.80, indicating the project is over budget.
Question 2: Which scheduling technique uses probability distributions to model activity duration uncertainty?
- CPM
- PERT (Correct answer)
- Gantt Chart
- Precedence Diagramming
Correct answer: PERT
PERT uses optimistic, most likely, and pessimistic duration estimates with weighted averages to model uncertainty.
Question 3: The Estimate at Completion (EAC) formula assuming future work will proceed at the budgeted rate is:
- BAC / CPI
- AC + (BAC - EV) (Correct answer)
- AC + ETC
- EV / BAC
Correct answer: AC + (BAC - EV)
EAC = AC + (BAC - EV) assumes remaining work will be completed at the originally planned cost rate.
Question 4: A contractor uses fast-tracking on a project. What is the primary risk associated with this technique?
- Increased project cost
- Increased rework due to overlapping activities (Correct answer)
- Reduced resource utilization
- Longer project duration
Correct answer: Increased rework due to overlapping activities
Fast-tracking overlaps activities that were planned sequentially, increasing the risk of rework if earlier work must be revised.
Question 5: Which cost estimating technique uses a statistical relationship between historical data and project variables?
- Analogous estimating
- Parametric estimating (Correct answer)
- Bottom-up estimating
- Three-point estimating
Correct answer: Parametric estimating
Parametric estimating uses statistical relationships such as cost per square foot or cost per unit based on historical data.
Question 6: A project's Schedule Variance (SV) is -$30,000. What does this indicate?
- The project is $30,000 under budget
- The project is $30,000 ahead of schedule in value terms
- The project is $30,000 behind schedule in value terms (Correct answer)
- The project has $30,000 in contingency remaining
Correct answer: The project is $30,000 behind schedule in value terms
SV = EV - PV; a negative SV means the project has earned less value than planned, indicating it is behind schedule.
Question 7: What is the purpose of a Schedule Performance Baseline in construction project management?
- To set the minimum acceptable schedule duration
- To provide an approved time-phased plan for measuring schedule performance (Correct answer)
- To establish the maximum allowable float for all activities
- To define the resource leveling constraints
Correct answer: To provide an approved time-phased plan for measuring schedule performance
The schedule performance baseline is the approved version of the schedule model used as a basis for comparison to actual results.
CCM Cost and Time Management 2
A construction project has a BAC of $500,000, EV of $200,000, and AC of $250,000.
What is the Cost Performance Index (CPI)?