🏆 PMP Exam — Master Keywords Guide

Click any keyword pill to see its definition & context — Auto-saving your notes | Eng. Ahmad Safi, PE

🏠 Introduction — How to Use This Guide

This guide covers every PMP exam keyword across all 10 Knowledge Areas, Agile/Hybrid, and Leadership domains. Click any keyword pill to instantly see its definition, exam trap, and usage context. Your personal notes auto-save in your browser.

💡 Exam Strategy: PMP keywords appear in situational questions. Knowing the definition is NOT enough — you must know WHEN and WHY a PM uses each tool or technique.

PMP Exam Breakdown (2024)

People Domain — 42% of questions (leadership, teams, stakeholders)
Process Domain — 50% of questions (planning, execution, monitoring)
Business Environment — 8% (strategy, compliance, value)
~50% Predictive (Waterfall) | ~50% Agile/Hybrid

1. Project Management Framework Keywords

Project Program Portfolio OPA EEF PMBOK PMO Project Life Cycle Process Groups Triple Constraint Baseline Progressive Elaboration Rolling Wave Project Charter Business Case

Project: A temporary endeavor undertaken to create a unique product, service, or result. KEY: temporary (has definite start/end) and unique. Not an ongoing operation.
Exam Trap: "Temporary" means defined end, NOT short duration.

Program: A group of related projects managed in a coordinated way to obtain benefits not available from managing them individually. Programs focus on strategic benefits delivery.

Portfolio: Projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives. Portfolio ≠ Program — portfolios may include unrelated components.

OPA (Organizational Process Assets): Plans, processes, policies, procedures, and knowledge bases specific to and used by the performing organization. Examples: lessons learned, templates, historical data, process standards.
Exam Tip: OPA = internal organizational knowledge.

EEF (Enterprise Environmental Factors): Conditions not under the project team's control that influence, constrain, or direct the project. Examples: government regulations, market conditions, organizational culture, PMO structure, infrastructure.
Exam Tip: EEF = external or organization-wide conditions.

PMBOK Guide: PMI's Project Management Body of Knowledge — a standard describing best practices for project management. PMBOK 7th Edition focuses on Principles and Performance Domains (not just process groups).

PMO (Project Management Office): Organizational structure that standardizes project-related governance processes. Types: Supportive (advisory), Controlling (compliance), Directive (manages projects directly).

Project Life Cycle: Series of phases from project start to completion. Can be predictive (waterfall), iterative, incremental, agile, or hybrid. ≠ Product Life Cycle (much longer).

Process Groups: Initiating → Planning → Executing → Monitoring & Controlling → Closing. These are NOT phases — multiple process groups occur simultaneously during a project.

Triple Constraint: Scope, Schedule, Cost — changing one affects the others. Modern view adds Quality, Risk, and Resources. The PM must balance all constraints to satisfy the customer.

Baseline: The approved version of a work product used as a basis for comparison. The three project baselines are: Scope Baseline (WBS + WBS Dictionary + Scope Statement), Schedule Baseline, and Cost Baseline. Changes require formal change control.

Progressive Elaboration: Continuously improving and detailing a project plan as more specific information and accurate estimates become available. Used in predictive projects.

Rolling Wave Planning: A form of progressive elaboration where near-term work is planned in detail and future work is planned at a higher level. Common in agile and iterative projects.

Project Charter: Document issued by the sponsor that formally authorizes a project and gives the PM authority to apply resources. Created during Initiating. Cannot be changed without sponsor approval.

Business Case: Document that justifies the project investment by outlining costs, benefits, risks, and alternatives. Created before the project charter by the sponsor or business analyst.

🎯 Exam Tip: OPA vs EEF — KNOW the difference. OPA = things the org OWNS (templates, lessons learned). EEF = things that EXIST around the org (culture, regulations, market). This distinction appears in nearly every knowledge area.

📋 Scenario: You are starting a new bridge rehabilitation project. Before creating the Project Charter, you review historical data from previous bridge projects and the state DOT regulations.
→ Historical data = OPA | State regulations = EEF

2. Integration Management Keywords

Integrated Change Control CCB Change Request Config Management Lessons Learned PM Plan Kickoff Meeting Close Project Assumption Log

Perform Integrated Change Control: The process of reviewing all change requests; approving changes; managing changes to deliverables, OPAs, project docs, and the PM plan. All changes must go through this process — NO EXCEPTIONS.
Exam Trap: Even if a change seems minor, it must be formally submitted.

CCB (Change Control Board): A formally constituted group responsible for reviewing, evaluating, approving, deferring, or rejecting changes. The PM may or may not be a member. CCB decisions are final for that authority level.

Change Request: A formal proposal to modify any document, deliverable, or baseline. Types: Corrective Action, Preventive Action, Defect Repair, Updates. ALL must be documented, even if later rejected.

Configuration Management: Ensures that the descriptions of project products are correct and complete, and identifies and documents the functional and physical characteristics of a product. Tracks versions of deliverables.

Lessons Learned: Knowledge gained during a project that shows how project events were addressed or should be addressed in the future. Created throughout the project and stored in the Lessons Learned Register → OPA at project close.

Project Management Plan: The document that describes how the project will be executed, monitored, controlled, and closed. Contains subsidiary plans (scope, schedule, cost, quality management plans) and baselines. It is the single source of truth.

Kickoff Meeting: Meeting held at the start of the Executing process group to align stakeholders, communicate the project plan, clarify roles, and establish team norms. Signals transition from Planning to Executing.

Close Project/Phase: Finalizing all activities, transferring deliverables, releasing resources, archiving records, updating OPAs, and formally closing contracts. Lessons learned are finalized here.

Assumption Log: Documents all assumptions and constraints identified during the project. Used to track, monitor, and manage assumptions throughout the project. High-risk assumptions may become risks.

🎯 Exam Tip: Integration Management is the PM's PRIMARY responsibility. The PM's role is to integrate all other knowledge areas. When in doubt in any situational question — the PM integrates, coordinates, and communicates.

Change Request Types — Quick Reference

Type	Definition	Example
Corrective Action	Fix a current deviation from the plan	Project is behind schedule → add resources
Preventive Action	Prevent a future problem before it occurs	Risk of rain delay → schedule buffer
Defect Repair	Fix a non-conforming product or component	Concrete test fails → re-pour
Updates	Changes to formally controlled docs	Update the risk register

3. Scope Management Keywords

Project Scope Statement WBS WBS Dictionary Work Package Scope Creep Gold Plating Requirements RTM Product Scope Validate Scope Control Scope Decomposition

Project Scope Statement: Describes the project deliverables and the work required to create those deliverables. Includes: product scope description, deliverables, acceptance criteria, exclusions, assumptions, and constraints.

WBS (Work Breakdown Structure): A hierarchical decomposition of the total scope of work to be carried out to accomplish the project objectives and create required deliverables. The WBS defines the WHAT (not HOW or WHO).
Rule: 100% Rule — WBS must capture 100% of project scope; nothing outside the WBS is in scope.

WBS Dictionary: Provides detailed information about each WBS component including description, acceptance criteria, resources, schedule, cost, quality requirements. Complements the WBS.

Work Package: The lowest level of the WBS. It can be scheduled, cost estimated, monitored, and controlled. Work packages are assigned to individuals or teams for execution.

Scope Creep: Uncontrolled expansion of product or project scope without adjustments to time, cost, and resources. Occurs when changes bypass the change control process.
Prevention: Clear scope statement + integrated change control.

Gold Plating: Adding extra features or functionality beyond what was agreed upon, without customer request. PM should PREVENT gold plating — it consumes resources and may actually reduce customer satisfaction. NOT the same as scope creep (which is the customer adding scope).

Requirements: Conditions or capabilities needed by a stakeholder to solve a problem or achieve an objective. Collected via interviews, surveys, focus groups, workshops. Documented in Requirements Documentation.

RTM (Requirements Traceability Matrix): Links requirements to their origin and traces them throughout the project lifecycle. Ensures all requirements are met and nothing is added without approval. Maps: Business Need → Requirement → Deliverable → Test Case.

Product Scope vs Project Scope: Product Scope = features and functions of the product. Project Scope = work to deliver the product. Project scope is complete when Project Scope Statement requirements are met. Product scope is measured against product requirements.

Validate Scope: Formalizing acceptance of completed project deliverables by the customer/sponsor. OUTPUT = Accepted Deliverables. Occurs during Monitoring & Controlling. Results in formal sign-off. ≠ Quality Control (which verifies correctness first).

Control Scope: Monitoring the status of project and product scope and managing changes to the scope baseline. Ensures all changes go through integrated change control.

Decomposition: A technique used to divide and subdivide project scope and deliverables into smaller, more manageable parts (WBS elements). Continues until work packages are defined.

🎯 Exam Tip: Validate Scope vs Control Quality — Validate Scope is done WITH the customer (acceptance). Control Quality is done INTERNALLY (checking correctness). Quality Control comes BEFORE Validate Scope.

📋 Scenario: A team member adds extra reporting features because they think the client will love them, without telling anyone.
→ This is Gold Plating — NOT acceptable. PM should address this and reinforce scope boundaries.

4. Schedule Management Keywords

Critical Path Method Float / Slack Lead Lag PERT Fast Tracking Crashing Network Diagram Milestone Gantt Chart Dependencies Resource Leveling Monte Carlo Schedule Compression

Critical Path Method (CPM): Determines the longest path through the network diagram — this is the minimum project duration. Activities on the critical path have ZERO float. Any delay on the critical path delays the project.
Formula: Critical Path = Longest Path from Start to Finish.

Float (Slack): Amount of time an activity can be delayed without delaying the project (Total Float) or the next activity (Free Float). Critical Path activities = 0 float. Negative float = schedule is already late.

Lead: Acceleration of a successor activity — starts before the predecessor is complete. Lead = NEGATIVE lag. Example: Start painting while drywall is 80% done (-3 days lead).

Lag: A delay inserted between predecessor and successor activities — the successor CANNOT start until the waiting period is over. Example: Concrete must cure for 3 days before loading (+3 days lag).

PERT (Program Evaluation and Review Technique): Uses three-point estimating: Optimistic (O), Most Likely (M), Pessimistic (P).
Expected Duration = (O + 4M + P) / 6
Std Dev = (P - O) / 6
Used when uncertainty is high.

Fast Tracking: Performing activities in parallel that would normally be done sequentially. INCREASES RISK. Does NOT add cost (unless rework needed). Used when time is the constraint.
Exam Tip: Fast tracking = parallel work = more risk.

Crashing: Adding resources (people, equipment, overtime) to shorten schedule. INCREASES COST. Only applied to critical path activities. Use cost-slope to find the most cost-effective crash.
Exam Tip: Crashing = add resources = more cost.

Network Diagram (PDM): Precedence Diagramming Method — shows logical relationships between activities using nodes (activities) and arrows (dependencies). Types of relationships: FS, FF, SS, SF.

Milestone: A significant point or event in a project. Has zero duration. Used to track major achievements. Milestones appear on the schedule and Gantt chart. Cannot be crashed (no duration).

Gantt Chart: A bar chart showing project activities and their durations against a calendar timeline. Easy to read but doesn't clearly show dependencies (unlike network diagrams). Common in status reports.

Dependencies: FS (Finish-to-Start) — most common: B can't start until A finishes. SS (Start-to-Start): B starts when A starts. FF (Finish-to-Finish): B finishes when A finishes. SF (Start-to-Finish): rare.

Resource Leveling: Adjusts start and finish dates based on resource constraints — may extend the schedule. Resource Smoothing: adjusts activities within float without changing the critical path.
Exam Tip: Leveling can extend; smoothing stays within float.

Monte Carlo Simulation: A quantitative risk analysis technique that uses probability distributions to calculate the probability of completing on a specific date. Produces a range of possible outcomes, not a single point estimate.

Schedule Compression: Techniques to shorten the schedule without reducing scope. Two main methods: Fast Tracking (parallel work, more risk) and Crashing (add resources, more cost). Choose based on constraint.

Technique	Effect on Cost	Effect on Risk	Effect on Scope
Fast Tracking	May increase (rework)	⬆ Increases	No change
Crashing	⬆ Increases	May increase	No change
Resource Leveling	No change	Decreases overallocation	No change

PERT Expected = (O + 4M + P) / 6 | Std Dev = (P - O) / 6 | Variance = [(P - O) / 6]²

5. Cost Management & EVM Keywords

BAC PV EV AC SV CV SPI CPI EAC ETC VAC TCPI Cost Baseline Contingency Reserve Management Reserve Analogous Estimating Parametric Estimating Bottom-Up Estimating

BAC (Budget at Completion): Total approved budget for the project. The original baseline cost. BAC = sum of all PV at end.

PV (Planned Value): The authorized budget assigned to scheduled work. What you PLANNED to spend by this point. Also called BCWS (Budgeted Cost of Work Scheduled).

EV (Earned Value): The authorized budget for work that has been COMPLETED. The value of work actually done. Also called BCWP. EV is always calculated against the baseline, not actual cost.

AC (Actual Cost): The realized cost incurred for work performed. What you actually SPENT. Also called ACWP. AC has no relationship to value created — it's just money spent.

SV (Schedule Variance): EV – PV. Positive = ahead of schedule. Negative = behind schedule. Zero = on schedule. Note: SV goes to zero at project end (regardless of how late you are) — use SPI for ongoing monitoring.

CV (Cost Variance): EV – AC. Positive = under budget. Negative = over budget. Zero = on budget. CV tells you if you're getting value for what you're spending.

SPI (Schedule Performance Index): EV / PV. >1 = ahead of schedule. <1 = behind schedule. =1 = on schedule. SPI measures schedule efficiency.

CPI (Cost Performance Index): EV / AC. >1 = under budget. <1 = over budget. =1 = on budget. CPI is the MOST important EVM metric — used to forecast final cost. Exam Tip: If CPI < 1, project is losing value on every dollar spent.

EAC (Estimate at Completion): Expected total cost to complete project. Multiple formulas:
① BAC/CPI (if current variance is typical) ← MOST COMMON ON EXAM
② AC + ETC (bottom-up re-estimate)
③ AC + (BAC – EV) (if original estimate was flawed)
④ AC + [(BAC – EV) / (CPI × SPI)]

ETC (Estimate to Complete): Expected cost to finish remaining work. ETC = EAC – AC. Or re-estimated from scratch. Note: ETC is about the FUTURE; AC is about the PAST.

VAC (Variance at Completion): BAC – EAC. Positive = project will be under budget. Negative = project will be over budget. Overall expected budget variance.

TCPI (To-Complete Performance Index): (BAC – EV) / (BAC – AC) [to stay within BAC] or (BAC – EV) / (EAC – AC) [to meet EAC]. If TCPI > 1, future work must be MORE efficient than past. If TCPI < CPI, EAC is likely achievable.

Cost Baseline (S-Curve): Approved version of time-phased project budget, used as basis for comparison. Excludes management reserve. The S-curve shows cumulative spending over time.

Contingency Reserve: Budget for identified risks (known unknowns). Controlled by the PM. Included in the cost baseline. Released when specific risk trigger occurs.

Management Reserve: Budget for unknown unknowns (unidentified risks). Controlled by MANAGEMENT, not the PM. NOT included in the cost baseline but IS in the project budget. PM needs sponsor approval to use it.

Analogous Estimating: Uses historical data from similar past projects to estimate. Faster and less costly but less accurate. Uses expert judgment. Also called "top-down" estimating.

Parametric Estimating: Uses statistical relationship between historical data and other variables. Example: cost per square foot × square footage. More accurate than analogous when data quality is good.

Bottom-Up Estimating: Estimates individual work packages and rolls up to total. Most ACCURATE but most time-consuming. Requires detailed WBS. Best used when scope is well-defined.

EVM Cheat Sheet

Metric	Formula	>0 or >1	<0 or <1
CV	EV – AC	Under budget ✅	Over budget ❌
SV	EV – PV	Ahead of schedule ✅	Behind schedule ❌
CPI	EV / AC	Efficient ✅	Inefficient ❌
SPI	EV / PV	Ahead ✅	Behind ❌
EAC	BAC / CPI	Most common formula on exam
ETC	EAC – AC	Cost to finish remaining work
VAC	BAC – EAC	Under budget at end ✅	Over budget at end ❌

📋 EVM Scenario: Your project BAC=$500K. At month 6, PV=$200K, EV=$160K, AC=$190K.
→ CV = 160-190 = -$30K (over budget)
→ SV = 160-200 = -$40K (behind schedule)
→ CPI = 160/190 = 0.84 (losing $0.16 per dollar)
→ EAC = 500/0.84 = $595K (projected final cost)

6. Quality Management Keywords

Quality Management Plan Quality Assurance Quality Control Cost of Quality Prevention vs Inspection Pareto Chart Fishbone / Ishikawa Control Chart Benchmarking Quality Audit 7 Basic Quality Tools

Quality Management Plan: Describes quality policies, objectives, and responsibilities. Defines how quality will be managed throughout the project. Includes quality metrics, acceptance criteria, and quality control tools.

Quality Assurance (Manage Quality): Auditing quality requirements and results from quality control to ensure appropriate quality standards are used. It's process-focused. Done by QA department or third-party auditor. Proactive. Goal: Prevent defects.

Quality Control (Control Quality): Monitoring specific project results to determine whether they meet quality standards. Product-focused. Done by the project team. Reactive. Goal: Identify defects before delivery. OUTPUT = Verified Deliverables.

Cost of Quality (COQ): All costs to achieve quality. Two categories:
• Cost of Conformance: Prevention (training, reviews) + Appraisal (testing, inspections)
• Cost of Non-Conformance: Internal failure (rework, scrap) + External failure (warranty, liability)
Exam Tip: Prevention costs are always cheaper than failure costs.

Prevention vs Inspection: Prevention = cost money upfront (training, process design). Inspection = finding defects after work is done. Gold standard: "Prevention over Inspection" — it costs more to fix than to prevent.

Pareto Chart (80/20 Rule): A bar chart ranking causes of defects from most to least frequent. The Pareto Principle states that 80% of problems come from 20% of causes. Used to prioritize improvement efforts.

Fishbone / Ishikawa / Cause-and-Effect Diagram: Identifies root causes of a problem. The "fish head" = problem; "fish bones" = categories of causes (6Ms: Man, Machine, Method, Material, Measurement, Mother Nature). Used in root cause analysis.

Control Chart: Displays process performance over time against control limits. Upper Control Limit (UCL) and Lower Control Limit (LCL) = ±3 sigma. Rule of Seven: 7 consecutive data points on one side of the mean = process is out of control.

Benchmarking: Comparing actual or planned practices to industry best practices to identify improvements and provide a basis for measuring performance. Used in Plan Quality and Manage Quality.

Quality Audit: A structured review of quality management activities. Goal is to identify inefficient and ineffective policies, processes, and procedures. Results in process improvements. Part of Manage Quality (QA).

7 Basic Quality Tools: 1) Cause-and-Effect (Fishbone) 2) Flowcharts 3) Check Sheets 4) Pareto Charts 5) Histograms 6) Control Charts 7) Scatter Diagrams. Exam Tip: Know which tool is used for which purpose.

🎯 Exam Tip: QA = Process | QC = Product. If the question is about auditing processes → QA. If checking deliverables → QC. QC comes BEFORE Validate Scope (accept deliverables).

🎯 Rule of 7: 7 consecutive points on one side of the mean on a control chart = process is out of control, even if all within control limits. This appears FREQUENTLY on the exam.

7. Resource Management Keywords

RACI Chart RAM OBS Resource Calendar Team Development Tuckman's Model Motivation Theories Conflict Resolution Virtual Teams Staffing Plan

RACI Chart: A Responsibility Assignment Matrix showing Responsible, Accountable, Consulted, Informed. R = does the work | A = owns the outcome (only ONE per task) | C = provides input | I = receives updates. Exam Tip: Only ONE person can be Accountable per task.

RAM (Responsibility Assignment Matrix): Maps project resources (team members) to WBS work packages. Shows who is responsible for each piece of work. RACI is the most common type of RAM.

OBS (Organizational Breakdown Structure): Shows which organizational units are responsible for which WBS elements. Connects the WBS to the org chart. Used to clarify accountability.

Resource Calendar: Identifies working days, shifts, and hours when resources are available. Considers holidays, vacation, part-time arrangements. Critical input to schedule development.

Team Development (Develop Team): Improving competencies, team interaction, and overall team environment to enhance project performance. Methods: training, co-location, recognition, team-building activities.

Tuckman's Model (Stages of Team Development):
1. Forming — polite, uncertain
2. Storming — conflict, jockeying for position
3. Norming — rules established, cooperation
4. Performing — high performance, trust
5. Adjourning — project close, team disbands
Exam Tip: Storming is NORMAL — PMs should not eliminate all conflict.

Motivation Theories:
• Maslow: Hierarchy of needs (Physiological→Safety→Social→Esteem→Self-Actualization)
• Herzberg: Hygiene factors (prevent dissatisfaction) vs Motivators (create satisfaction)
• McGregor: Theory X (people dislike work) vs Theory Y (people are self-motivated)
• McClelland: Achievement, Affiliation, Power
• Expectancy Theory: People are motivated when they believe effort leads to reward.

Conflict Resolution Methods (Best to Worst on Exam):
1. Collaborate/Problem Solve — win-win, best ✅
2. Compromise/Reconcile — both give up something
3. Smooth/Accommodate — minimize differences
4. Force/Direct — I win, you lose
5. Withdraw/Avoid — avoid conflict, worst ❌
Exam Tip: "Confront" = Collaborate = Problem Solve = BEST.

Virtual Teams: Groups of people with shared goals who fulfill their roles with little or no time spent meeting face-to-face. Challenges: communication, trust, cultural differences, time zones. Tools: video conferencing, collaboration software.

Resource Management Plan / Staffing Plan: Describes how resources will be acquired, managed, and released. Includes: roles, responsibilities, authority, competency requirements, and release criteria.

🎯 Exam Tip: Conflict Resolution — The BEST answer is almost always Collaborate/Problem Solve. The WORST is Withdraw/Avoid. Force should be used only when a quick decision is needed or safety is at risk.

Theory	Key Concept	Exam Application
Maslow	Lower needs first	Safety before self-actualization
Herzberg	Hygiene ≠ Motivator	Salary = hygiene, not motivator
McGregor X	People avoid work	Autocratic management
McGregor Y	People are motivated	Participative management
McClelland	3 needs: Ach/Aff/Pow	Know which need drives behavior

8. Communications Management Keywords

Comms Management Plan Communication Channels Comms Methods Communication Noise Active Listening Status Report Issue Log

Communications Management Plan: Documents who needs what information, when they need it, and in what format/medium. Includes: stakeholder communication requirements, information to be communicated, responsible parties, escalation process.

Communication Channels Formula: N(N-1)/2 where N = number of stakeholders. Example: 10 stakeholders = 10(9)/2 = 45 channels. Adding 1 person to a 10-person team adds 10 new channels. Exam Tip: Know this formula — it appears on every exam.

Communication Methods:
• Interactive: Multidirectional — meetings, calls, video (most effective)
• Push: Sender sends to specific receivers — emails, reports, memos
• Pull: Recipient retrieves — intranet, shared databases, lessons learned
Exam Tip: Choose interactive for complex/sensitive issues; push for general updates; pull for large audiences.

Communication Noise (Barriers): Anything that distorts or blocks communication. Types: physical (distance), cultural (language, values), emotional (stress), perceptual (bias), organizational (hierarchy). PM must identify and minimize noise.

Active Listening: Fully concentrating, understanding, and responding to the speaker. Includes: maintaining eye contact, nodding, paraphrasing, asking clarifying questions. PM should spend 90% of time communicating — and most of that listening.

Status Report: A regular communication to stakeholders showing project progress, accomplishments, issues, and forecasts. Types: Status Report (where are we now), Progress Report (what was done), Forecast Report (where will we be).

Issue Log: A project document where issues are recorded, categorized, assigned to team members, and tracked to resolution. Issues are current problems (not future risks). ≠ Risk Register (risks are future/uncertain).

Communication Channels = N × (N – 1) / 2

🎯 Exam Tip: The PM spends ~90% of time communicating. The #1 tool for stakeholder management is communication. When the exam asks "what should the PM do FIRST?" — often the answer involves COMMUNICATION with the relevant stakeholder.

9. Risk Management Keywords

Risk Register Risk Response Strategies Known Unknowns Risk Tolerance Risk Appetite EMV Probability/Impact Matrix Risk Audit Residual Risk Secondary Risk Watch List Workaround

Risk Register: A document where risk information is recorded. Contains: risk description, category, probability, impact, risk score, risk owner, response strategies, current status. Updated throughout the project.

Risk Response Strategies:
Threats:
• Avoid — eliminate threat by changing plan
• Transfer — shift impact to third party (insurance, contracts)
• Mitigate — reduce probability or impact
• Accept — do nothing (active = contingency plan; passive = budget contingency)
Opportunities:
• Exploit — make sure opportunity happens
• Enhance — increase probability or impact
• Share — partner with another entity
• Accept — take advantage if it occurs

Known Unknowns vs Unknown Unknowns:
• Known Unknowns = identified risks — managed with Contingency Reserve (PM controls)
• Unknown Unknowns = unidentified risks — managed with Management Reserve (management controls)
Exam Tip: Contingency reserve = PM | Management reserve = management/sponsor.

Risk Tolerance: The degree, amount, or volume of risk that an organization or individual will withstand. High tolerance = willing to accept more risk. Low tolerance = risk-averse. Different stakeholders may have different tolerances.

Risk Appetite: The amount of risk an organization is willing to accept in pursuit of value. Higher appetite = willing to take more risk for potential gain. Closely related to risk tolerance and risk threshold.

EMV (Expected Monetary Value): EMV = Probability × Impact. Used in decision tree analysis. Sum of all EMVs = expected value of a decision. Used to compare alternatives and calculate contingency reserves.
Example: 30% chance of $100K loss = EMV of -$30K.

Probability/Impact Matrix: A grid for prioritizing risks based on their probability of occurrence and potential impact. High P × High I = Red (high priority). Medium = Yellow. Low = Green (watch list).

Risk Audit: Examines and documents the effectiveness of risk responses in dealing with identified risks and their root causes. Different from quality audit. Used to verify risk process effectiveness.

Residual Risk: Risk that remains after a risk response has been implemented. Example: After buying insurance (transfer), a small deductible risk remains. Must be documented and monitored.

Secondary Risk: A new risk that arises as a direct result of implementing a risk response. Example: Hiring a contractor to mitigate a risk (secondary risk = contractor performance). Must be identified and managed.

Watch List: Low-priority risks that are not being actively managed but are monitored periodically. Stored in the risk register with a low risk score.

Workaround: An unplanned response to an identified or unidentified risk event. Used when no contingency plan exists (unknown unknowns). Reactive by nature. Results in a change request.

🎯 Exam Tip: The BEST risk response for threats is AVOID (eliminate the risk entirely). If avoidance is not possible, MITIGATE (reduce it). Transfer is not free — it comes at a cost (insurance premiums, contractor markups).

Strategy	Threat/Opportunity	Example
Avoid/Exploit	Threat: Avoid \| Opp: Exploit	Change plan to eliminate risk / guarantee opportunity
Transfer/Share	Threat: Transfer \| Opp: Share	Insurance / Joint venture
Mitigate/Enhance	Threat: Mitigate \| Opp: Enhance	Reduce probability / Increase chance
Accept	Both	Do nothing now / set contingency

10. Procurement Management Keywords

SOW RFP / RFQ / IFB Contract Types Fixed Price Contracts Cost Reimbursable Time & Material Procurement Audit Close Procurement Make-or-Buy

SOW (Statement of Work): Describes the project work to be performed by the vendor. Includes: scope, location, schedule, deliverables, and standards. Must be clear and complete to avoid disputes. Different from scope statement (which is for the PM's team).

RFP / RFQ / IFB:
• RFP (Request for Proposal) — scope not fully defined, want vendor creativity/approach
• RFQ (Request for Quotation) — scope defined, selecting on price
• IFB (Invitation for Bid) — scope fully defined, lowest bid wins (construction)
Exam Tip: IFB = low bid wins | RFP = best proposal wins

Contract Types — Risk Allocation: Fixed Price (FP) = seller bears most risk. Cost Reimbursable (CR) = buyer bears most risk. Time & Material (T&M) = shared risk, middle ground. Exam Tip: The PM wants Fixed Price when scope is well-defined — it transfers risk to seller.

Fixed Price Contract Types:
• FFP (Firm Fixed Price) — seller bears all risk, set price regardless of cost
• FP-EPA (Fixed Price with Economic Price Adjustment) — allows price adjustments for inflation
• FPIF (Fixed Price Incentive Fee) — fixed with incentive for performance, has a ceiling price
Exam Tip: FFP = riskiest for seller but safest for buyer.

Cost Reimbursable Contracts:
• CPFF (Cost Plus Fixed Fee) — seller gets actual cost + fixed fee
• CPIF (Cost Plus Incentive Fee) — seller gets cost + fee based on performance
• CPAF (Cost Plus Award Fee) — fee based on buyer's subjective evaluation
Exam Tip: CR = buyer bears cost risk. Best when scope is unclear.

Time & Material (T&M): Hybrid contract — seller charges for time (per hour/day) and materials used. Good for short-term expert engagements when scope is undefined. Buyer and seller share risk. Must have a "not-to-exceed" clause to cap liability.

Procurement Audit: A structured review of the procurement process from Plan Procurement through Control Procurement. Identifies successes and failures that should be noted for other procurements on this or other projects.

Close Procurement: Finalizing each project procurement. Includes: verifying deliverables, financial settlement, releasing contractors, archiving records. Formal written notice to seller that contract is complete.

Make-or-Buy Analysis: Decision to produce a product/service internally (make) or purchase externally (buy). Considers: cost, expertise, capacity, confidentiality, control, availability. An output of Plan Procurement.

Contract Type	Risk to Buyer	Risk to Seller	Best When
FFP	Low	High	Scope well-defined
FPIF	Low-Med	Med	Scope defined, incentive desired
T&M	Med	Low	Short-term, expert services
CPFF	High	Low	Scope uncertain, R&D work
CPAF	Highest	Lowest	Performance hard to measure

11. Stakeholder Management Keywords

Stakeholder Register Power/Interest Grid Engagement Assessment Matrix Identify Stakeholders Manage Engagement Monitor Engagement

Stakeholder Register: Documents information about identified stakeholders — their interests, involvement, interdependencies, influence, and potential impact. Classification information (power, interest, influence). Updated throughout the project.

Power/Interest Grid (Salience Model): A tool to prioritize stakeholder engagement:
• High Power, High Interest → Manage Closely
• High Power, Low Interest → Keep Satisfied
• Low Power, High Interest → Keep Informed
• Low Power, Low Interest → Monitor
Exam Tip: Know all four quadrants and their strategies.

Stakeholder Engagement Assessment Matrix: Compares current engagement levels to desired engagement levels for each stakeholder. Levels: Unaware → Resistant → Neutral → Supportive → Leading. Goal: move stakeholders to Supportive or Leading.

Identify Stakeholders: The FIRST process in Stakeholder Management — and one of the FIRST processes in the entire project. Done during Initiating. Identifies all who may affect or be affected by the project. Should be repeated throughout the project as new stakeholders emerge.

Manage Stakeholder Engagement: Communicating and working with stakeholders to meet their needs, address issues, and foster appropriate involvement. Part of the Executing process group. Focus on building relationships.

Monitor Stakeholder Engagement: Monitoring stakeholder relationships and tailoring strategies for engaging stakeholders. Part of Monitoring & Controlling. Uses information management systems and expert judgment.

🎯 Exam Tip: Identify Stakeholders = EARLY and OFTEN. Missing a key stakeholder can doom the project. The PM should actively look for new stakeholders throughout the project lifecycle.

📋 Scenario: A key executive who was not initially involved in the project is now raising objections during execution.
→ PM should: Update the Stakeholder Register, assess their Power/Interest, develop an engagement strategy, and communicate proactively — NOT ignore them or escalate immediately.

⚡ Agile / Hybrid Keywords

Sprint / Iteration Product Backlog Sprint Backlog User Story Velocity Burndown Chart Retrospective Scrum Roles Kanban WIP Limit Definition of Done Definition of Ready Servant Leadership Agile Manifesto Spike

Sprint / Iteration: A time-boxed period (1–4 weeks) during which a potentially shippable product increment is created. In Scrum, typically 2 weeks. Sprint length stays consistent. No scope changes during a sprint (protect the sprint).

Product Backlog: An ordered list of everything that is known to be needed in the product. Maintained by the Product Owner. Continuously refined (groomed) through backlog refinement. Never complete until the project ends.

Sprint Backlog: The set of items selected from the product backlog for the current sprint, plus a plan for delivering them. Owned by the Development Team. Not changed once the sprint starts (except by the team).

User Story: "As a [type of user], I want [goal] so that [benefit]." A lightweight requirement format in agile. Must have Acceptance Criteria. Estimated in story points. Follows INVEST criteria: Independent, Negotiable, Valuable, Estimable, Small, Testable.

Velocity: The amount of work a team completes in a sprint (measured in story points or user stories). Used to forecast how many sprints are needed to complete the backlog. Average of last 3 sprints is most reliable.

Burndown Chart: Shows remaining work (story points or tasks) vs time remaining. A downward sloping line. If the line is above the ideal line → behind schedule. Burnup chart shows work completed — rising line. Exam Tip: Both charts used in agile — burndown is more common.

Sprint Retrospective: A ceremony held AFTER the Sprint Review and BEFORE the next Sprint Planning. Team reflects on: What went well? What could improve? What will we commit to improving? Focused on the PROCESS (not the product).

Scrum Roles:
• Product Owner — owns the product backlog, prioritizes, represents business value
• Scrum Master — facilitates, removes impediments, servant leader, coaches Scrum
• Development Team — self-organizing, cross-functional, 3–9 people
Exam Tip: Scrum Master ≠ PM. Scrum Master serves the team; does not manage them.

Kanban: A visual workflow management method. Uses a Kanban board with columns (To Do, In Progress, Done). Does NOT use sprints. Focuses on continuous flow and limiting WIP. Pull system — team pulls work when ready.

WIP Limit (Work In Progress Limit): A constraint on how many items can be in a particular state at once. Prevents bottlenecks and overloading. Fundamental to Kanban. Lower WIP = faster delivery = fewer context switches.

Definition of Done (DoD): A shared understanding of what "complete" means for any work item. Must include: coded, tested, documented, reviewed, meets acceptance criteria. Prevents technical debt. Agreed upon by the team, not just the PO.

Definition of Ready (DoR): Criteria that a user story must meet before being accepted into a sprint. Example: story is estimated, has acceptance criteria, dependencies identified, and small enough for one sprint.

Servant Leadership: A leadership style where the leader puts the needs of the team first. Characteristics: listening, empathy, healing, awareness, persuasion, conceptualization, stewardship, commitment to growth. In Scrum, the Scrum Master is a servant leader.

Agile Manifesto — 4 Values:
1. Individuals and interactions over processes and tools
2. Working software over comprehensive documentation
3. Customer collaboration over contract negotiation
4. Responding to change over following a plan
Note: Items on the right have value, but items on the LEFT are valued MORE.

Spike: A time-boxed research or exploration activity used to answer a question or solve a technical problem. Produces knowledge, not a deliverable. Results feed back into the backlog as refined user stories.

Hybrid Keywords

Hybrid Approach Tailoring PMO in Agile

Hybrid Approach: Combines predictive (waterfall) and agile elements. Example: Use waterfall for procurement and contracts but agile sprints for development. Used when some parts of the project have well-defined scope and others do not.

Tailoring: Adapting the project approach, processes, and tools to fit the specific project context. Not all processes are required on every project. Tailoring decisions should be documented. Key principle in PMBOK 7th Edition.

PMO in Agile/Hybrid: The PMO supports agile teams by providing governance, reporting standards, and coaching — not micromanaging. Agile PMO focuses on value delivery, not process compliance.

Ceremony	Purpose	Who Attends	Frequency
Sprint Planning	Plan the sprint backlog	Full Scrum Team	Start of sprint
Daily Scrum (Standup)	Sync, remove impediments	Dev Team (SM optional)	Daily, 15 min
Sprint Review	Demo and get feedback	Full team + stakeholders	End of sprint
Sprint Retrospective	Improve process	Full Scrum Team (no stakeholders)	After Review
Backlog Refinement	Groom future stories	PO + Dev Team	Mid-sprint

🧠 Leadership Keywords

Leadership Styles Emotional Intelligence Types of Power Negotiation Ethics & PMI Code Change Management Critical Thinking Diversity & Inclusion

Leadership Styles:
• Directing — high task, low relationship; telling what to do (new team)
• Coaching — high task, high relationship; teach and guide
• Supporting — low task, high relationship; facilitate (capable team)
• Delegating — low task, low relationship; empower (expert team)
• Laissez-Faire — hands-off; works only with highly expert, motivated teams
• Transformational — inspire vision and change
• Transactional — reward/punish based on performance

Emotional Intelligence (EI/EQ): The ability to recognize, understand, manage, and effectively use emotions. 5 components (Goleman): Self-Awareness, Self-Regulation, Motivation, Empathy, Social Skills. High EQ PMs build better teams and handle conflict better. Exam Tip: EQ is increasingly tested in PMP 2024.

Types of Power (French & Raven):
• Formal/Legitimate — power from position title
• Reward — power to give rewards (salary, recognition)
• Coercive/Penalty — power to punish (negative, avoid using)
• Expert — power from knowledge/skill (BEST for PM)
• Referent — power from respect/charisma (also excellent)
Exam Tip: Best powers = Expert + Referent. Worst = Coercive.

Negotiation: A discussion aimed at reaching an agreement. Best approach: interest-based (win-win). Skills: listening, empathy, patience, knowing your BATNA (Best Alternative to a Negotiated Agreement). PM negotiates for resources, contracts, scope, and issue resolution.

PMI Code of Ethics & Professional Conduct: Four core values:
• Responsibility — ownership of decisions and their consequences
• Respect — show high regard for ourselves, others, and resources
• Fairness — make decisions impartially and objectively
• Honesty — understand the truth and act in a truthful manner
Exam Tip: When in doubt, choose the ethical answer — report violations, disclose conflicts of interest, never accept inappropriate gifts.

Change Management (Organizational): Structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state. Key models: Kotter's 8 Steps, ADKAR (Awareness, Desire, Knowledge, Ability, Reinforcement). PMs must manage both project changes and organizational changes.

Critical Thinking: The objective analysis and evaluation of an issue to form a judgment. A key skill for PMs — required for risk assessment, decision-making, and problem-solving. In PMP questions, choose answers that show analysis rather than reaction.

Diversity & Inclusion: Recognizing and valuing differences in team members (culture, background, experience, perspective). Inclusive teams perform better. PM must be culturally sensitive in virtual and global teams. Avoid bias in decision-making.

🎯 Exam Tip: For leadership situational questions — the BEST PM is proactive, collaborative, transparent, ethical, and servant-oriented. The WORST PM is reactive, dictatorial, avoidant, or deceptive.

📊 Complete EVM Formula Cheat Sheet

PV = Planned Value (BCWS) — Budgeted cost of work scheduled

EV = Earned Value (BCWP) — Budgeted cost of work performed

AC = Actual Cost (ACWP) — Actual cost incurred

BAC = Budget at Completion — Total project budget

CV = EV – AC (+ = under budget | – = over budget)

SV = EV – PV (+ = ahead | – = behind)

CPI = EV / AC (>1 = efficient | <1 = inefficient)

SPI = EV / PV (>1 = ahead | <1 = behind)

EAC = BAC / CPI ← Most common on exam

EAC = AC + (BAC – EV) ← If original estimate was wrong

EAC = AC + [(BAC – EV) / (CPI × SPI)] ← Both behind schedule and over budget

ETC = EAC – AC

VAC = BAC – EAC

TCPI = (BAC – EV) / (BAC – AC) ← To complete within original budget

TCPI = (BAC – EV) / (EAC – AC) ← To meet new EAC

PERT = (O + 4M + P) / 6

Std Dev = (P – O) / 6

Communication Channels = N(N–1) / 2

EMV = Probability × Impact

Point of Total Assumption (PTA) = [(Ceiling Price – Target Price) / Buyer Share] + Target Cost

🎯 PMP Exam Tips, Tricks & Traps

Golden Rules for Situational Questions

Always follow the process — don't skip steps. Initiating before Planning, QC before Validate Scope.
Always communicate proactively — when in doubt, talk to stakeholders.
Never make decisions alone on major changes — use CCB and change control.
The PM should ALWAYS act ethically and professionally — report violations, disclose conflicts.
Fix problems, don't blame — always choose the collaborative, problem-solving approach.
In agile: protect the team from distractions — that's the Scrum Master's job.
When scope changes are requested: assess impact FIRST, then submit change request.

Most Commonly Confused Keywords

Pair	Distinction
Validate Scope vs Control Quality	Validate = customer accepts \| Quality = team checks
OPA vs EEF	OPA = org owns it \| EEF = external, not controlled
Fast Track vs Crash	Fast Track = parallel (more risk) \| Crash = add resources (more cost)
Risk vs Issue	Risk = future uncertain \| Issue = current problem
Contingency vs Management Reserve	Contingency = PM \| Management = Sponsor
Product Scope vs Project Scope	Product = features \| Project = work to create product
Scope Creep vs Gold Plating	Scope Creep = customer adds \| Gold Plating = team adds
QA vs QC	QA = process audit \| QC = deliverable inspection
RACI A vs RACI R	A = accountable (one only) \| R = does the work
Lead vs Lag	Lead = negative (speed up) \| Lag = positive (wait)

Critical Numbers to Memorize

Item	Value
Scrum Team Size	3–9 development team members
Control Chart: Rule of 7	7 consecutive points = out of control
Sigma levels	1σ=68.3% \| 2σ=95.5% \| 3σ=99.73% \| 6σ=99.9997%
Communication Channels (10 people)	10×9/2 = 45 channels
PERT weight on Most Likely	4 (from O + 4M + P)
Float on Critical Path	0 (zero)
Sprints: typical length	1–4 weeks (2 weeks most common)

💡 The #1 Exam Trap: The question will describe a problem and ask what the PM should do. Wrong answers often skip steps or make unilateral decisions. The correct answer almost always involves: assess → communicate → submit change request → update documents.

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