Course 3 – Project Planning: Putting It All Together QUIZ ANSWERS

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1 Week 3: Managing Budgeting and Procurement
2 Managing Budgeting and Procurement INTRODUCTION
3 TEST YOUR KNOWLEDGE: UNDERSTANDING PROJECT BUDGETS
4 TEST YOUR KNOWLEDGE: CREATING A PROJECT BUDGET
5 TEST YOUR KNOWLEDGE: INTRODUCTION TO PROCUREMENT
6 TEST YOUR KNOWLEDGE: NAVIGATING PROCUREMENT CHALLENGES
7 Project Planning: Putting It All Together WEEKLY CHALLENGE 3
8 Managing Budgeting and Procurement CONCLUSION
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Week 3: Managing Budgeting and Procurement

Managing Budgeting and Procurement INTRODUCTION

Budgeting and procurement are the subjects studied this week in the second course of the Google Project Management: Professional Certificate program introduced by Coursera.

In this course, participants will learn how to formulate and dissect the components of a project budget, navigate through the successful budgeting process, and best practices in the management of project budgets. It also delves into the procurement process that covers the documentation needed as well as ways of avoiding ethical conflicts.

By immersing students in an interdisciplinary approach, it gives them a good grounding in budgeting and procurement so that they can manage these functions in real projects.

Learning Objectives:

  • Elicit support to make legal and compliance issues moot and ethical conflicts avoidable during procurement.
  • Describe the procurement process as well as discuss critical procurement documentation.
  • Learn to estimate, monitor, and preserve the project budget itself.
  • Identify the components of project budgets and understand the budgeting process.

TEST YOUR KNOWLEDGE: UNDERSTANDING PROJECT BUDGETS

1. Fill in the blank: Creating a _____ establishes a cost estimate for your project budget and ensures that you calculate the correct expenses for a set period of time.

  • Forecast (CORRECT)
  • cost of quality
  • reserve analysis
  • contingency budget

Correct: An estimate using prognosis or future estimations is an expense forecast or prediction, in which expenditure is expected over a particular time horizon. The project budget is revised frequently and updated as a continuation through the life cycle of the project.

2. As a project manager, you determine the cost for items such as software, tools, labor, and equipment. What budgeting term refers to these types of costs?

  • Reserve analysis
  • Contingency budget
  • Cost of quality
  • Resource cost rates (CORRECT)

Correct: Resource cost rates express the costs of resources like labor, tools, equipment, materials, software, etc. To know the total cost of completing a project, it becomes important to determine cost rates for each resource brought into the project.

3. Which of the following strategies should you consider when creating your budget? Select all that apply.

  • Disregard historical data
  • Time-phase your budget (CORRECT)
  • Baseline your budget (CORRECT)
  • Document all costs (CORRECT)

You may come up with time phase budgeting which allows one to spread costs for project tasks throughout the time period during which those expenses are expected to occur. By comparing tasks against a timeline, monitoring planned versus actual costs can be done through time. Baseline your budget and document all kinds of costs as well.

Baseline budget is initial cost estimating established at the beginning of the project. You will find out if the project is in the green or in the red by measuring the actual cost incurred against that of the baseline budget so that as the project advances, you would be able to see if they go in-sync or not. Last, but not the least: record all costs with the time-phased budgeting.

These include all types of cost incurred directly or indirectly and are collated. Another indicated option is to incorporate time-phased budgeting for which establishing a baseline budget helps.

4. Which three of the following items are examples of direct costs for your project?

  • Utilities
  • Wages and salaries of employees and contractors (CORRECT)
  • General office equipment
  • Staff training (CORRECT)
  • Materials costs (CORRECT)

The work which is necessary to accomplish the assignment is borne by employees and contractors. Hence, they are directly related costs in terms of their wages and salaries.

Furthermore, with regards to the training of the staff, it forms a direct cost since it is an integral part of completing the project.

Direct costs also include materials that are necessary to complete the project.

5. At what point in the project life cycle does the project manager create the project budget?

  • Closing phase
  • Execution phase
  • Initiation phase (CORRECT)
  • Planning phase

Correct: Update the budget because it is always changing if you have to make adjustments to a project management budget at some future point in time.

6. Who creates estimates for the project budget?

  • Project manager (CORRECT)
  • Project sponsor
  • Chief Financial Officer (CFO)
  • Team representative

Correct: The project manager closely works with other team members for developing accurate estimates.

7. What should a project manager account for when project budgeting? Select all that apply.

  • Surprise expenses (CORRECT)
  • Reforecasting throughout the project (CORRECT)
  • Competitor prices
  • Stakeholder needs (CORRECT)

Some contingency plans are present in the budget, which allows the project manager to avoid the risk of overshooting the budget.

It is possible for a project manager to re-prepare an independent budget which is revised, sometimes according to the progress of the project.

Recognition of the shareholders’ expectations proves really crucial for the success of the project.

TEST YOUR KNOWLEDGE: CREATING A PROJECT BUDGET

1. As a project manager setting a budget, you factor in unexpected costs that may arise during the project. What budgeting strategy does this refer to?

  • Leveraging experts
  • Bottom-up approach
  • Adding a buffer and reserves (CORRECT)
  • Setting a baseline

Correct: During a project budget, it is also advisable to reserve additional funds for costs that may sometimes go beyond the initial estimate.

2. As a project manager, what three things should you do to control costs and reduce changes to the budget? Select all that apply.

  • Ensure budget changes are within scope. (CORRECT)
  • Manage changes as they’re made. (CORRECT)
  • Request stakeholder approval on additional costs only after they are incurred
  • Establish a sign-off plan and inform stakeholders of any expense changes that occur. (CORRECT)

This is what such a development should look like: Work to ensure that any incremental costs or changes to the budget are contained within the boundaries of the project. Also, any amendments will be approved by stakeholders and will be managed.

Update forecasts as cost changes occur so that no surprises hit the budget. In addition, seek sign-off on all changes from appropriate stakeholders and keep them within the scope of the project.

Convince all involved stakeholders to give their approval of any extra expense before it is incurred. Also, manage the changes as they arise and make sure they do not lie outside the project scope.

3. As a project manager, what does going under budget on a project indicate about your approach to budget management? Select all that apply.

  • That your initial estimates were inaccurate (CORRECT)
  • That you accurately estimated the total cost of ownership (TCO)
  • That you effectively conserved funds and will likely receive larger budgets for future projects
  • That you could have spent more on the project to provide extra resources (CORRECT)

Moreover, being under budget probably suggests that the original estimates were inaccurate and that more money could have possibly been spent on the project. It can also mean that the budget for the next project could be reduced.

Going under budget may indicate the possibility that more money could have been invested in the project, for instance, acquiring other attributes or engaging in higher-quality output. It also indicates poor estimates at the start, which may result in a reduced budget for future projects.

4. What budgeting challenge arises when changes or growth cause additional work the project manager hadn’t planned for?

  • Inaccurately accounting for total costs
  • Budget pre-allocation
  • Inaccurate budget baseline
  • Scope creep (CORRECT)

Correct: Scope creep is when modifications, amplifications, or any of such affect the original scope of a project after it has begun. This results in extra unplanned work, which can then add to the project budget.

5. What does the bottom-up approach entail?

  • Review past projects that are similar to the current project to get an idea of what the project could involve.
  • Think about all the parts of a project from the beginning to the end that have an associated cost, and add all of that together. (CORRECT)
  • Gather insights from experts who worked on a similar project in the past and use their knowledge as a resource.
  • Establish the main objectives of a project and keep them within a reasonable framework to ensure the project makes financial sense.

Correct: This bottom-up technique is most effective for forming a project budget. This means understanding the project into minute components with costs attached and summing them all to get a total budget.

6. When is a good time to review the project budget and identify if you need to make any changes?

  • After speaking with the project sponsor
  • After the initiation phase
  • After you meet a milestone (CORRECT)
  • After a retrospective

Correct: Milestones can act as checkpoints for budget management and payment.

7.  Kim, a producer at a mobile gaming company, is excited to launch the company’s first mobile game in February. Kim clearly maps out the tasks and schedule for each of the team’s developers. She considers working days and her commitments on other projects.

Kim realizes that in mid-December she did not account for the company’s mandatory two-week holiday shutdown in her schedule. It is too late to do anything, so she flags it to her manager and waits for the shutdown to happen. Did this project manager implement effective risk management and most likely stay under budget?

  • Yes
  • No (CORRECT)

She should proactively manage that risk once she recognizes it. Flagging it to a manager could be a first step and nothing else. A more robust risk management should be to inform her manager about the situation and all relevant stakeholders and team members required to be aware of the risk.

Next, after flagging the risk, Kim needs to have a plan to manage it, such as possibly adding two new hires for the launch or a contract worker who won’t feel the disruption of the two-week close of business to fill the gap. She might even recommend that the launch date be postponed. Kim should bring these choices and proposals to her team and stakeholders so they can work together towards a solution that minimizes risk.

TEST YOUR KNOWLEDGE: INTRODUCTION TO PROCUREMENT

1. As a project manager, you’re interested in working with vendors in a way that is collaborative and places an emphasis on relationships. What procurement management process should you choose?

  • Historical
  • Flexible
  • Traditional
  • Agile (CORRECT)

Correct: Agile procurement management is thus more oriented towards collaboration among the project team and the final supplier than traditional approaches. It keeps a healthy relationship between the two parties in focus.

2. As a project manager, you host weekly meetings to periodically review vendor performance and work quality. Which procurement process step does this represent?

  • Controlling (CORRECT)
  • Initiating
  • Selecting
  • Completing

Correct: You’ll need to monitor the vendor’s work regularly to ensure that it conforms to the contract terms during this phase.

3. As a project manager selecting a vendor, you first need to outline the details and requirements of your project in order to solicit bids. Which procurement document helps with this task?

  • A request for proposal (RFP) (CORRECT)
  • A Statement of Work (SOW)
  • A work breakdown structure (WBS)
  • A non-disclosure agreement (NDA)

Correct: An RFP or Request for Proposal is a request for response from bidders. After receiving multiple bids, it provides a selection process to choose the most suitable vendor for the project.

4. As a project manager creating a statement of work (SOW), who do you ask for input and technical knowledge?

  • Project sponsor
  • Key stakeholders
  • Subject matter expert (SME) (CORRECT)
  • Vendors

Correct: SMEs or Subject Matter Experts are individuals in your company who have the experience and proper technical know-how for project development.

5. What is the process of obtaining all the materials, services, and supplies a team needs to complete a project?

  • Vendor management
  • Vendor sourcing
  • Time and materials management
  • Procurement (CORRECT)

Correct: A project manager must also procure essential items and vendor services for the success of a project besides obtaining materials, services, and supplies.

6. Jerome, a program manager at a small, five-person nonprofit company, is responsible for developing a financial literacy program for middle schools. While he has a lot of expertise in financial literacy, he realizes that he needs to find an educator to partner with to help him develop the curriculum.

Which of the following is the best option for Jerome to locate an external resource?

  • The non-profit does not have any educators, so he finds a college student who is studying childhood education and gives them an internship to help create the curriculum.
  • The non-profit does not have any educators, so Jerome needs to look outside the non-profit. By looking outside of the non-profit, he will find someone with the skill set he needs to help create the program materials and educational course. (CORRECT)
  • The non-profit does not have any educators, so he will need to hire one. He puts up a job posting to hire a new staff member.

Correct: External resources refer to individuals or organizations outside the company capable of providing other skills and competencies for complementing the capabilities within the organization.

7. What is a request for proposal (RFP)?

  • A document that ensures confidential information remains within an organization
  • A document sent after a vendor is selected which evolves as the project goes on
  • A document that outlines the details and requirements of an organization’s project to be passed on to vendors (CORRECT)

Correct: An RFP is a detailed solicitation of vendor bids that helps project teams in determining the best vendor for a project. Typically, an RFP is used by many departments of a company and across different industries.

8. What does a statement of work (SoW) describe?

  • The products and services a vendor or contractor will provide for the organization (CORRECT)
  • The agreement among parties that confidential information stays within an organization
  • The requirements of an organization’s project to be passed on to vendors

Correct: An accurate statement-the work (SoW) is among other crucial documents in project management and contracting. The SoW defines the scope of work, deliverables, timelines, performance criteria, and expectations in the relation of a client (or a company) and a contractor.

TEST YOUR KNOWLEDGE: NAVIGATING PROCUREMENT CHALLENGES

1. As a project manager, you are about to hire a new vendor; however, there are terms in the contract you are unfamiliar with. Who should you contact to better understand the contract?

  • Another project manager
  • Vendor consultant
  • A subject matter expert (SME)
  • A member of the legal team (CORRECT)

Correct: A company’s internal legal framework is determined by its size and could comprise an in-house legal crew, outsourced legal crew, or external legal advisors.

2. Which of the following should a project manager do to ensure an ethical procurement?

  • Work with government officials as long as they seem trustworthy.
  • Speak to the press if they inquire about product sourcing methods.
  • Alter vendor contracts based upon what you believe is most ethical for the company.
  • Make sure that various stakeholders adhere to governmental policies and adequate corporate social responsibility. (CORRECT)

Correct: It is necessary to involve pertinent stakeholders in the decision-making process where clear ethical decisions present themselves. Moreover, you must understand the needs of your organization based on business demands, follow the code of ethics of your profession, and consult an expert (if required).

3. What are some potential ethical risks project managers need to be aware of? Select all that apply.

  • Sole-supplier sourcing (CORRECT)
  • Bribery or corruption (CORRECT)
  • Fraudulent checks
  • Interaction with state owned entities (CORRECT)

Sole sourcing prevents outside vendors from bidding on a project. Project managers should also be aware of the risks of bribery, corruption, and inappropriate interactions with state-owned entities.

One form of corruption occurs when a vendor tries to reduce competition for a contract during the bidding process through bribery or other means. Sole-supplier sourcing and inappropriate interactions with state-owned entities are additional ethical traps to avoid.

Any relationship with a government based on inappropriate practices that limit competition is unethical. Project managers should also be cautious of ethical traps such as bribery, corruption, and sole-supplier sourcing.

4. Once you sign a contract with a vendor, you audit each task, execute quality control, and approve invoices. These are examples of what project manager duty?

  • Mentoring
  • Relationship building
  • Trust-building
  • Assurance (CORRECT)

Correct: As a project manager, you’ll want to frequently review the work delivered by your vendors.

Project Planning: Putting It All Together WEEKLY CHALLENGE 3

1. When creating a budget, a project manager must do which of the following? Select all that apply.

  • Review and reforecast throughout the project (CORRECT)
  • Approve budget increases
  • Understand stakeholder needs (CORRECT)
  • Budget for surprise expenses (CORRECT)

2. Which scenario is an example of planned cost versus actual cost?

  • When planning your project budget, you document the planned cost of labor. To do this, you use the estimated number of hours your team needs to complete the project. As your project progresses, you document the total hours your team works to determine the total cost of labor for your project. This number may be different from your original cost of labor. (CORRECT)
  • When planning your project budget, you notice that you need to advertise several job positions. The cost to post the job descriptions to several online job boards is $300.
  • When planning your project budget, you need to factor in unexpected costs that may occur. You decide to reserve 5% of your overall budget as a buffer.
  • When planning your project budget, you gather historical data on costs of materials, resources, and labor to determine how much each will cost. Once you begin procuring these items, you don’t update the actual cost.

3. As a project manager creating a budget, you proactively identify factors that may impact expenses. You then take action to minimize the budgetary impact of these factors. What is this task called?

  • Baselining the budget
  • Cost control (CORRECT)
  • Bottom-up approach
  • Estimating cost

4. As a project manager, you research and source for a specific service. You then have to manage that relationship. This is known as what type of procurement?

  • Performance management
  • Budget management
  • Cost management
  • Vendor management (CORRECT)

5. Which section of the statement of work (SoW) includes details about what the service entails and may include major project activities?

  • Schedule overview
  • Target audience
  • Purpose
  • Scope (CORRECT)

6. Which of the following justifies sole-supplier sourcing?

  • The supplier provided material for the past three projects.
  • The supplier is easy to work with and offers a discount.
  • The company is cautious about exposing trade secrets. (CORRECT)
  • The project sponsor asks to only use one particular supplier.

7. To create a well-organized budget, a project manager includes different types of expenditures. Which type of budget expense creates a future benefit for a company?

  • Operating expenses (OPEX)
  • Historical expenses
  • Capital expenses (CAPEX) (CORRECT)
  • Indirect expenses

8. At what phase in the procurement process would a project manager review a vendor’s performance and determine if they are meeting milestones?

  • Investigating
  • Controlling (CORRECT)
  • Completing
  • Selecting

9. Which of the following accurately describes total cost of ownership (TCO)?

  • TCO only factors in upfront expenses associated with a product or service.
  • TCO factors in expenses associated with a product or service over its lifetime. (CORRECT)
  • TCO is the dollar amount used to measure if a project is on track or not.
  • TCO is the additional room in the budget for unexpected cost

10. Fill in the blank: In project management, the budget is considered a _____—it is a success metric.

  • reserve
  • deliverable (CORRECT)
  • dependency
  • procurement

11. As a project manager, the project sponsor gives you cost estimates with a set amount of money to spend. What challenge for effective budgeting does this represent?

  • Lack of historical data
  • Pre-allocated budget (CORRECT)
  • Insufficient cash flow
  • Scope creep

12. After receiving multiple bids for your project, you select a vendor you’d like to work with. You’re ready to start the contracting process. Which procurement document do you fill out and send the vendor?

  • Scope of work (SoW)
  • Request for proposal (RFP)
  • Non-disclosure agreement (NDA)
  • Statement of work (SoW) (CORRECT)

13.  To create a well-organized budget, a project manager includes different types of expenses. Which type of budget expense includes costs for day-to-day tasks within a company?

  • Reserve expenses
  • Operating expenses (OPEX) (CORRECT)
  • Capital expenses (CAPEX)
  • Fixed expenses

14. Which of the following statements is typically true regarding budgeting?

  • It’s important to not go over budget, but it’s recommended to go under budget.
  • It’s important to not go under budget, but it’s recommended to go over budget.
  • It’s important to not go over or under budget. (CORRECT)
  • It’s recommended to go either over or under budget.

15. As a project manager creating a budget, you’re thinking about all the parts of a project from beginning to end—making a list of every material, resource, and contract worker. What do you call this type of budgeting?

  • Top-down approach
  • Contingency
  • Buffers and reserves
  • Bottom-up approach (CORRECT)

16. Which scenario is an example of proactive budget management?

  • You’re reviewing your budget and realize that it took much longer than you anticipated for a subject matter expert to complete a task. The labor cost associated with this task is now well over budget. You must now request a budget increase to cover the cost of the labor.
  • During your project, the market experiences a shortage of a resource that’s crucial for your project’s success. Because of the shortage, the price of this resource increases. This is something you did not expect, nor plan for, and must now figure out how you can afford to complete your project.
  • While planning your project budget, you decide that you don’t need to add buffers for unexpected costs. Since you’ve completed several projects like this one in the past and have always come in under budget, you feel you don’t need to plan for any extra cost.
  • While planning your project budget, you gather historical data and consult with industry experts. You consider fixed costs, add relevant line items, and set aside a 5% reserve for unexpected costs. (CORRECT)

17. As a project manager, you’re seeking a procurement approach that outlines clear workstreams, hard deadlines, and financially protects your project against unforeseen circumstances. Which procurement approach should you choose?

  • Robust
  • Traditional (CORRECT)
  • Protectionist
  • Agile

18. A document that keeps confidential information within the organization is known as what?

  • Request for proposal (RFP)
  • Non-disclosure agreement (NDA) (CORRECT)
  • Statement of work (SoW)
  • Scope of work (SoW)

19. Which of the following may impact ethics in procurement? Select all that apply.

  • Union contract negotiations
  • Interaction with state-owned entities (CORRECT)
  • Bribery or corruption (CORRECT)
  • Sole-supplier sourcing (CORRECT)

20. At what phase in the procurement process would a project manager check a vendor’s reputation for delivering quality work, and make a site visit?

  • Completing
  • Selecting (CORRECT)
  • Controlling
  • Introducing

21. As a project manager, you review your budget and notice one vendor is costing more than anticipated. You shift funds and recalibrate the budget to offset this increased vendor cost. What is the budgeting term for this task?

  • Setting the baseline
  • Reforecasting (CORRECT)
  • Contingency budgeting
  • Reserve analysis

22. “Honesty, responsibility, respect, and fairness are the values . . .” begins what type of saying of the Project Management Institute that serves as a guide to how they do procurement and other business?

  • requirements
  • slogan
  • code of ethics (CORRECT)
  • motto

23. To create a well-organized budget, a project manager includes different types of expenses. Which type of budget expense includes costs for day-to-day tasks within a company?

  • Capital expenses (CAPEX)
  • Operating expenses (OPEX) (CORRECT)
  • Fixed expenses
  • Reserve expenses

24. At what phase in the procurement process would a project manager define project resources and make the case for obtaining them?

  • Controlling
  • Initiating (CORRECT)
  • Selecting
  • Completing

25. When budgeting a project, you should consider additional expenses such as warranties, supplies, add-ons, and upgrades. Which budgeting term refers to this concept?

  • Total cost of ownership (CORRECT)
  • Bottom-up approach
  • Top-down approach
  • Baseline your project

26. When working through the risk management life cycle, what’s the main goal when evaluating a risk?

  • Controlling risks
  • Identifying risks
  • Treating risks
  • Prioritizing risks (CORRECT)

27. What do project managers need to identify before creating a communication plan?

  • Recipients, communication methods, project risks, and goals of communication
  • Recipients, project risks, goals of communication, and barriers to communication
  • Recipients, anonymous survey questions, goals of communication, and barriers to communication
  • Recipients, communication methods, goals of communication, and barriers to communication (CORRECT)

28. Which of the following is an example of using historical data to develop your project budget?

  • Reviewing past projects that are similar to yours to get an idea of what your budget could entail (CORRECT)
  • Thinking about all the parts of your project from the beginning to the end and adding the costs together
  • Getting quotes from potential vendors
  • Reaching out to project managers who worked on past projects at the company

29. Which of the following are steps in the procurement process? Select all that apply.

  • Contract writing (CORRECT)
  • Initiating
  • Analyzing (CORRECT)
  • Controlling (CORRECT)

30. Fill in the blank: A project manager needs to alter their budget after making changes to the project schedule and costs. This is necessary in order to _____.

  • re-baseline the budget to track project progress of costs (CORRECT)
  • re-baseline the budget to track project progress of tasks
  • baseline the budget to track project progress of reserves
  • baseline the budget to track project progress of costs

31. Which three costs are examples of resource cost rates? 

  •  The cost of materials when building a house (CORRECT)
  •  The cost of software to help manage a project (CORRECT)
  •  The cost of a task buffer
  •  The cost of labor for a project team (CORRECT)

32. Fill in the blank: Typically, a project manager organizes a budget by _____. Then, the project manager lists tasks alongside each task’s associated costs. 

  • tools
  • teammates
  • dependencies
  • milestones (CORRECT)

33.  Which costs are examples of resource cost rates? Select all that apply.

  • The cost of software to help manage a project (CORRECT)
  • The cost of a task buffer
  • The cost of materials when building a house (CORRECT)
  • The cost of labor for a project team (CORRECT)

34. Imagine you are working on a project. It progresses as expected, but you would like to assess the budget to identify whether any budget items need to be revisited. When should you take this budgeting action

  • Any project pause
  • A project milestone (CORRECT)
  • Project flow meeting
  • Project completion

35. In the procurement process, what step comes after initiating the process?

  • Contract writing 
  • Initiating
  • Selecting (CORRECT)
  • Analyzing

36. Which section of the statement of work (SoW) includes the desired outcomes of the entire project? 

  • Deliverables 
  • Scope (CORRECT)
  • Purpose
  • Major milestones 

37. Which of the following do you consider an indirect cost in your budget? 

  • Security (CORRECT)
  • Training 
  • Wages and salaries
  • Equipment rental costs 

38. When budgeting a project, you learn the key stakeholder sets the budget before the project begins. Which budgeting term refers to this concept? 

  • Budget forecasting
  • Budget limitations
  • Budget predetermination
  • Budget pre-allocation (CORRECT)

39. Imagine you are in charge of the budget for a project. You understand the stakeholder needs and have budgeted for surprise expenses. Which of the following is a budgeting task you need to do over the course of the project?

  • Cancel planned expenses
  • Rebudget and restart
  • Review and reforecast (CORRECT)
  • Procure additional funding

40. Procurement involves obtaining materials, services, and supplies for a project. Which of the following also needs to be procured for a project? 

  • Employees
  • Schedules
  • Team leaders
  • Vendors (CORRECT)

41. At what phase in the procurement process would a project manager make payments, set up logistics, and ensure service agreements are being met? 

  • Controlling (CORRECT)
  • Initiating
  • Selecting
  • Completing

42. Fill in the blank: Typically, a project manager organizes a budget by _____. Then, the project manager lists tasks alongside each task’s associated costs. 

  • Milestones (CORRECT)
  • tools
  • teammates
  • Dependencies

43. Imagine you create a budget and add it to a spreadsheet. You include the estimated costs for contractors who are working on the project based on the expected number of hours they work. What column should you enter this cost in your spreadsheet? 

  • Planned cost
  • Minimal cost 
  • Actual cost
  • Limit cost (CORRECT)

44. As a project manager, you’re seeking a procurement approach that is more collaborative with the project teams and an adaptable, living contract. Which procurement approach should you choose? 

  • Robust
  • Traditional 
  • Agile (CORRECT)
  • Protectionist

45. At the beginning of your project, you solicit bids from vendors to select the one that is best for the project. Which procurement document should you prepare to fulfill this task? 

  • Statement of work (SoW)
  • Request for proposal (RFP) (CORRECT)
  • Scope of work (SoW)
  • Non-disclosure agreement (NDA)

46. “Honesty, responsibility, respect, and fairness are the values…” begins what type of saying of the Project Management Institute that serves as a guide to how they do procurement and other business? 

  • Code of ethics (CORRECT)
  • Requirements
  • Motto
  • Slogan

47. The budgeting process usually takes place at the same time as what other process? 

  • Delivery
  • Procurement
  • Scheduling (CORRECT)
  • Production

48. Which activity ensures ethical procurement in the initiating phase of a project? 

  • Focus on the day-to-day relationships with vendors
  • Review government regulations and policies (CORRECT)
  • Execute quality control
  • Audit each task and cost

49. A project manager predicts the cost of a project for the upcoming quarter. What is this prediction known as? 

  • Schedule
  • Material Expense
  • Forecast (CORRECT)
  • Planned Expense

50. Which of the following are steps in the procurement process? Select all that apply. 

  • Initiating (CORRECT)
  • Contract writing (CORRECT)
  • Controlling (CORRECT)
  • Analyzing

51. When assessing ethical versus unethical procurement, what is the first step you should take? 

  • Review contracts with your legal team
  • Use your best judgment and do the required research (CORRECT)
  • Reach out to local government officials
  • Discuss with a trusted friend

52. What is the first step when completing a reserve analysis? 

  • Account for cost of quality
  • Categorize different types of costs
  • Review all potential risks to your project (CORRECT)
  • Develop a baseline budget

53. Time and materials contracts are usually paid monthly, based on hours worked. What is a fixed contract? 

  • A contract paid to a specific vendor
  • A contract paid for a certain amount of time
  • A contract paid when certain milestones are reached (CORRECT)
  • A contract paid internally to team members

54. A project manager creates a budget. They determine the amount of buffer funds the project likely needs for completion. What is this budget component? 

  • Risk funding
  • Reserve analysis (CORRECT)
  • Expected estimation
  • Surprise expense

55. Imagine you are creating a budget for an upcoming project. You determine the dollar amount to measure against which will conclude whether the budget is on track. This action will measure the success of your project. What is this dollar amount called? 

  • Fixed cost
  • Expectation 
  • Planned cost (CORRECT)
  • Baseline

56. A project manager proactively identifies factors that might have an impact on the budget and takes action to limit variance. What is this practice called? 

  • Cost control (CORRECT)
  • Cost limiting 
  • Bottom-up approach
  • Finding the baseline

57. As a project manager, you notice that some of your inventory is arriving damaged, and it isn’t the vendor’s fault. What is this known as in budget planning? 

  • Expected issues
  • Surprise expense (CORRECT)
  • Reserve inventory
  • Low-quality product

58. Is it effective project management for a project to be under budget? 

  • Maybe, but only if the stakeholders change the schedule.
  • No, this is a sign of unsatisfactory project management. (CORRECT)
  • Yes, this is a sign of excellent project management.

59. At what phase in the procurement process would a project manager decide what supplies and which vendors will be used on the project? 

  • Selecting (CORRECT)
  • Controlling
  • Investigating
  • Assignment

60. A project manager predicts the cost of a project for the upcoming quarter. What is this prediction known as? 

  • Material Expense
  • Forecast (CORRECT) 
  • Schedule
  • Planned Expense

61. Why is it important to remain vigilant when dealing with government agencies and officials?

  • They might have tighter restrictions and regulations in regard to sourcing. (CORRECT) 
  • They often attempt to entrap companies that make mistakes.
  • They are more likely to be unethical than companies.
  • They are usually in charge of union relationships.

62. A project manager writes a budget for an upcoming project. They break down the project by important points in the schedule like the completion of a phase. What are these important points known as?

  • Deliverables
  • Milestones (CORRECT) 
  • Dependencies
  • Progressions

63. Which of the following factors can lead to scope creep and negatively affect the budget? Select all that apply.

  • Agreements about the project that aren’t officially documented (CORRECT) 
  • Attainable timeframes and deadlines
  • Last-minute asks from priority stakeholders (CORRECT) 
  • A vague Statement of Work (SoW) (CORRECT) 

Managing Budgeting and Procurement CONCLUSION

To become a successful project manager, it is important to learn the techniques of budget making and maintenance for projects. In this process learning week, important topics regarding what are the components of project budget and how does the budgeting process works, are addressed.

Along to that, sourcing from possible strategies to avoid ethical conflicts in procuring as well as winning support through this phase of a project. Join us at Coursera.org for these amazing skills!

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