Understand the Terms and Concepts Relating to the Portfolio Definition Cycle MOP-PRACTITIONER Practice Questions (Page 6)

Questions 26–30

1. 26expert · hard

   A transport authority is building a portfolio of 12 infrastructure projects. For a major tunnel project, the project team's three point estimate gives a range of £400m–£700m. However, historical data from 30 comparable tunnel projects shows that 80% exceeded their original budget by at least 25%. The authority must decide whether to include the tunnel in the portfolio, and the finance director wants the estimate to be realistic. What is the most appropriate approach?

   • AExclude the tunnel from the portfolio because the estimate is too uncertain
   • BUse reference class forecasting to adjust the tunnel estimate based on the historical overrun data
   • CUse the three point estimate's pessimistic figure of £700m as the budget
   • DUse the optimistic figure of £400m to make the portfolio affordable
   Reveal Solution Discussion Select an answer first
2. 27application · medium

   A manufacturing firm is starting its annual portfolio definition cycle. The portfolio office has gathered a list of 60 potential initiatives from across the business, but the list is inconsistent: some are vague ideas, some are fully scoped projects, and some are operational tasks that should not be in the portfolio at all. What is the key first step the portfolio office should take in the understand practice?

   • ARun a multi-criteria analysis to rank the 60 initiatives immediately
   • BHold a decision conference to select the top 10 initiatives
   • CClarify and document each initiative so they are described consistently and are genuinely change initiatives
   • DApply three point estimating to every initiative to get cost ranges
   Reveal Solution Discussion Select an answer first
4. 28application · medium

   A utilities company's portfolio board is split over whether to prioritize a customer-service transformation or a grid-reliability program. Both are strategically important, and the board has been unable to reach consensus in three meetings. The portfolio office wants a facilitated, structured process that brings the board together to reach a committed decision in a single session. What should they arrange?

   • AA multi-criteria analysis completed independently by each board member
   • BA reference class forecast of both programs' likely delivery success
   • CA decision conference with a neutral facilitator and the full board
   • DA driver-based strategic contribution analysis circulated by email for individual scoring
   Reveal Solution Discussion Select an answer first
5. 29foundation · easy

   What is the primary purpose of reference class forecasting?

   • ATo reduce optimism bias by comparing the project to a class of similar past projects
   • BTo forecast the future demand for a product using market trends
   • CTo estimate the exact cost of a project using historical data from one similar project
   • DTo replace all other estimation techniques with a single method
   Reveal Solution Discussion Select an answer first
6. 30foundation · easy

   What is the main purpose of clear line of sight planning?

   • ATo allocate resources based on the availability of staff
   • BTo ensure that every initiative can be traced back to a strategic objective
   • CTo create a detailed project schedule for each initiative
   • DTo identify the dependencies between different projects
   Reveal Solution Discussion Select an answer first