ACP Workbook

Agile Certified Practitioner (ACP) Exam Prep
Chapter 05 - Value-Driven Delivery

Slide 1
Domain Tasks – Define Positive Value

1. Define deliverables by identifying units that can be produced incrementally in order to
maximize their value to stakeholders while minimizing non-value added work.
2. Refine requirements by gaining consensus on the acceptance criteria for features on a
just-in-time basis in order to deliver value.
3. Select & tailor the team’s process based on project & organizational characteristics as well
as team experience in order to optimize value delivery.
Domain Tasks – Avoid Potential Downsides

4. Plan for small releasable increments by organizing requirements into minimally
marketable features/minimally viable products in order to allow for the early recognition &
delivery of value.
5. Limit increment size & increase review frequency with appropriate stakeholders in order to
identify & respond to risks early on & at minimal cost.
6. Solicit customer & user feedback by reviewing increments often in order to confirm &
enhance business value.
v. 6.0- © Copyright and all rights reserved –

Looking Glass Development, LLC.
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Slide 2
Domain Tasks – Prioritization

7. Prioritize the units of work through collaboration with stakeholders in order to optimize
the value of the deliverables.
8. Perform frequent review & maintenance of the work results by prioritizing & maintaining
internal quality in order to reduce the overall cost of incremental development.
9. Continuously identify & prioritize the environmental, operational, & infrastructure factors
in order to improve the quality & value of the deliverables.
Domain Tasks – Incremental Development

10. Conduct operational reviews &/or periodic checkpoints with stakeholders in order to obtain feedback &
corrections to the work in progress & planned work.
11. Balance development of deliverable units & risk reduction efforts by incorporating both value producing &
risk reducing work into the backlog in order to maximize the total value proposition over time.
12. Re-prioritize requirements periodically in order to reflect changes in the environment & stakeholder
needs or preferences in order to maximize the value.
13. Elicit & prioritize relevant non-functional requirements (such as operations & security) by considering the
environment in which the solution will be used in order to minimize the probability of failure.
14. Conduct frequent reviews of work products by performing inspections, reviews, &/or testing in order to
identify & incorporate improvements into the overall process & product or service.

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Slide 3
 Value-Driven Delivery – Focusing on delivering real business value. The most

important features first.
 Consider technical dependencies & risks.
 Common mantra in Agile.
 Let’s start by defining value-driven delivery. The reason projects are undertaken is
to generate business value, be it to produce a benefit or improve a service. Even
safety and regulatory compliance projects can be expressed in terms of business
value by considering the business risk and impact of not undertaking them. If
value then is the reason for doing projects, value driven delivery is the focus of the
project throughout the project planning, execution, and control processes.
 It is the big picture view, the wearing of the sponsor’s hat when making decisions.
By the project manager and team assuming this viewpoint, there is an opportunity
to incorporate unique technical insights, such as technical dependencies or risk
reduction steps, into the selection of features for a release that the sponsor may
not be aware of. However value driven delivery remains a guiding vision for much
local decision making, the selecting of choices that maximize the value delivered
to the business or customer.

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Slide 4
Assessing Value
 Payback Period
 Return on Investment (ROI)
 Future Value
 Present Value
 Net Present Value (NPV)
 Internal Rate of Return (IRR)
 Benefit / Cost ratio (BCR or BCI)
 Focus on when to use these tools
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Slide 5
Assessing Value
Discounting or Present Value – Value today of
funds available in the future.
PV = FV / (1 + i)n
◦ If you want $1,000 in three (3) years how
much do you have to invest today at 8% to
receive your $1,000?
◦ End of Yr. 1 = $1,000 / (1 + 8%) = $925.93
◦ End of Yr. 2 = $925.93 / (1 + 8%) = $857.34
◦ End of Yr. 3 = $857.34 / (1 + 8%) = $793.83

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Slide 6
Assessing Value
 Net Present Value – Present Value
minus Present cost.
 Internal Rate of Return - Average rate

of return earned over the life of the
project. It is where discounted cash
flow – up front costs = 0.

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Slide 7
Planning Value
 Chartering
◦ Exists in Agile projects.
◦ Focused on what not how.
◦ Shorter document, typically one page.

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Slide 8
Value Stream Mapping

 Lean Manufacturing technique
 Uses visual maps of process
 6 Step process:
1. Identify the product or service that you are analyzing.
2. Create a value stream map of the current process,
identifying steps, queues, delays, & information flows.
3. Review the map to find delays, waste & constraints.
4. Create a new value stream map of the desired future
state of the process, optimized to remove or reduce
delays, waste & constraints.
5. Develop a roadmap for creating the optimized state.
6. Plan to revisit the process in the future to continually
improve.

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Slide 9
Value Stream Mapping You & friend

You
eat cake
Cake Bakery Checkout Unpack & You & friend

You
selection counter line slice eat cake

You
Bakers Sales

You
Bakers Sales
1 minute 2 minutes 2 minutes 2 minutes 10 minutes
Value Add
Nonvalue Add
4 minutes 6 minutes 15 minutes 5 minutes
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Slide 10
Value Stream Mapping

 Total Cycle Time = Value Add + NonValue
Added Time
 TCT = (1+2+2+2+10) + (4+6+15+5) = 47

Minutes
Total Value Added Time
 Process Cycle Efficiency =
Total Cycle Time
17
 PCE = 47 = 36%

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Slide 11
 Poppendieck’s 7 Lean Wastes Manufacturing

to Software.
Waste Description Example
Partially Done Work Work started, but not completed; partially done work can • Code waiting for testing
entropy • Specs waiting for
development
Extra Processes Extra work that does not add value • Unused documentation
• Unnecessary approvals
Extra Features Features that are not required, or are thought of as “nice- • Gold-plating
to-haves” • Technology features
Task Switching Multitasking between several different projects when there • People on multiple projects
are context-switching penalties
Waiting Delays waiting for reviews and approvals • Waiting for prototype reviews
• Waiting for document
approvals
Motion The effort required to communicate or move information • Distributed teams

or deliverables from one group to another; if teams are • Handoffs
not co-located, this effort may need to be greater
Defects Defective documents or software that needs correction • Requirements defects

• Software bugs

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Slide 12
 Customer-valued prioritization
◦ Working on the things that yield the greatest return
for the customer.
◦ Scrum = Product Backlog
◦ FDD = Feature list
◦ DSDM = Prioritized Requirements List
 MoSCoW Prioritization Schemes

◦ Must Have
◦ Should Have
◦ Could Have
◦ Would like to have, but not this time
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Slide 13
 Monopoly Money = to total project budget

 100 Point Method – Used with Use Cases from
Leffingwell & Widrig
 Kano Analysis – Customer satisfaction &
product development theory developed in the
1984 by Professor Noriaki Kano designed to
classify customer preferences into three
categories.

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Slide 14
Kano Analysis
 Performance Needs – These requirements can both satisfy &
dissatisfy customers. They are at the top of the customers’
mind. Customers will also talk about them readily when asked
what is important. You must choose the correct ones of these.
 Basic Needs – Having these requirements will NOT result in

customer satisfaction, but NOT having them will result in
dissatisfaction. Customers don’t give these items a thought
unless they are absent. They are sometimes referred to as
MUST HAVES.
 Excitement Needs – Customers are delighted when these are

delivered, but their absence doesn’t cause dissatisfaction.
They are often called UNIQUE SELLING or VALUE
PROPOSITIONS.

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Slide 15
Kano Analysis

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Slide 16
 Requirements Prioritization Model

◦ By Karl Wiegers
◦ Measures benefit, penalty, cost & risk of each feature.
◦ Scores from 1 to 9
 Relative Prioritization - A simple list removes the

categories that people tend to fixate on from the
debate and allows the focus of the discussion to
be on priorities. It also provides a framework for
deciding if and when to incorporate changes.
When change is requested, the team can ask the
business representatives, "What items are more
important than this change?"
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Slide 17
A Sample Story Map

The Story Story Story Story Story Story Story Story Story
Backbone
Story Story Story Story Story
Sequence
Walking Story Story Story Story Story Story Story Story Story
Skeleton
Less
Optional Story Story Story Story
Story Story Story Story
Story Story Story Story Story Story Story Story

Optionality
Story Story
Story Story Story Story

More Story
Optional
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Slide 18
 Risk – an uncertain event or condition

that, if realized, has a positive or
negative impact on at least one
project objective (such as time, cost,
scope or quality).
 Risks can have one or more causes
and one or more impacts. Planning Process Group
11. Project Risk Management
Negative risks are anti-value.

11.3

11.1
Perform
Plan Risk
Qualitative
Management
Risk Analysis
11.4
11.2 Perform
Identify Risks Quantitative
Risk Analysis
11.5
v. 6.0- © Copyright and all rights reserved – Plan Risk
Looking Glass Development, LLC. Responses
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Slide 19
Major Risk Classes

 Known Risks - Can be analyzed, possible
to plan. Contingency reserve or other
plans.
 Unknown Risks - Cannot be managed
proactively. General contingency or
management reserve.

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Slide 20
Agile Helps Mitigate Risks

 Schedule Risks - In waterfall it can be a
long time before a product is ready for
release. In Agile this can be shorter,
sometimes a few weeks.
 Budget Risks – Agile estimates are no more
accurate, but it is easier to manage.
 Cancellation Risk – Waterfall projects tend
to be cancelled late. An Agile project
produces functionality quickly so the
project can be cancelled.
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Slide 21

 Scope Creep – In waterfall projects scope is
added without any being removed. The
backlog forces hard decisions.
 Requirements Error – Waterfall projects specify
requirements long before they are delivered.
An incorrect requirement can generate
significant effort before the error is discovered.
 Technology Risks – Many projects require
unproven technologies. Waterfall extends the
time it takes to discover failed tech. Agile
allows for rapid discovery.
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Slide 22

 Security Risks – Waterfall projects often
take significant time before system
security can be tested. Agile projects
test security quickly, often and at regular
intervals.

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Slide 23
Plan Do
Successful Agile projects are

both business & risk driven
Act Check

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Slide 24
Expected Monetary Value (EMV)

• Calculates the average outcome when future
events are uncertain
Cost Probability Product
Optimistic Outcome $150,000 .20 $30,000
Likely Outcome $225,000 .50 $112,500
Pessimistic Outcome $300,000 .30 $90,000
$ 232,500

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Slide 25
Decision Tree Analysis

Outcome EMV
60% $250K $150K
Chance
Event
40% -$100K -$40K
Choice
Event 20% -$45K -$9K
Chance
Event
80% $20K $16K
Conservative EMV = $7,000
Aggressive EMV = $110,000

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Slide 26
B. C.
Probability Outcome
& Minus D. C * Probability
Outcome Cost
Well
A. $ 300K $ 195K
65% received E. Final
Cost of $550K Outcomes
Choice OTS
OTS
$ 72.5K
35%
$ - 250K $ -100K
Rejected $ - 350K $ -123K
OTS or
Develop
Well
$ 150K $ 128K
$ - 350K 85% received
$500K
Develop
Develop
$ 66K
15%
-60K
Rejected $ - 410K $ -61.5K

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Slide 27
 Use EMV to determine risk value

 Insert risks into backlog with requirements
sorted by cost. Risk-Adjusted
Prioritized
Backlog
Requirements
Requirement 1 $6,500
Requirement 1
Prioritized Risk $6,500
Risk 1 $6,000
List Requirement 2 $5,000
Requirement 2
Risk 1 $5,000 Requirement 3 $4,000
$10,000 x 30% = $6,000
Risk 2 $3,500
Requirement 3
+ =
Risk 2
$4,000 Requirement 4 $3,000
$7,000 x 50% = $3,500
Requirement 4 Risk 3 $3,000
Risk 3
$12,000 x 50% = $3,000 $3,000 Requirement 5 $2,500
Risk 4 Requirement 5 Risk 4 $2,000
$5,000 X 20% = $2,000 $2,500 Requirement 6 $1,000
Risk 5
Requirement 6 Risk 5 $1,000
$6,000 x 33% = $1,000
$1,000

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Slide 28
Agile Contracting
 Traditional contracting attempts to fix scope
& cost. This often leads to overruns
 Agile contracting fixes time & costs leaving
scope flexible.
 This requires greater communication.
Functionality Fixed Resources Time
Time Costs
Variable Functionality

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Slide 29
Agile Contracting
 DSDM Contracting – Focuses on work being
“fit for business purpose” & passing tests
rather than matching specifications.
 Jeff Sutherland – “Money for Nothing &
Change for Free” suggests early termination
options & flexibility in making changes.
Standard fixed price contract + T&M for
additional work + a “change for free” clause if
they work with the team on every iteration.

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Slide 30
Agile Contracting
 Graduated Fixed Price Contracts
◦ Thorup & Jensen
◦ Both parties share risk
◦ Hourly rates are defined based on delivery
Completi Graduated Total Fee

on Rate
Early $200 / Hour $150,000
On Time $180 / Hour $175,000
Late $160 / Hour $200,000
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Slide 31
Agile Contracting
 Fixed Price Work Packages –
◦ Work is estimated at a lower level
◦ Seller is allowed to re-estimate remaining work
packages as project progresses.
◦ Customer allowed to focus on greatest value.

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Slide 32
Why not Gantt Charts & other

software?
 Data accuracy perception increases.
 Barriers for stakeholder interaction increase.

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Slide 33
Little’s Law
 The cycle time, how long we are going to
have to wait for benefits, is proportional to
the size of the queue or how much WIP we
have.
Things we’ve started Things we’ve finished
Cycle Time Cumulative Flow Chart

WIP

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Slide 34
 Demonstrations – Critical to confirming

success.
◦ We learn about the differences between what is
asked for and what was interpreted & built.
◦ We learn about new or adjusted functionality.
 IKIWISI – I’ll Know It When I See It.

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Slide 35
Cumulative Cost Curve EAC
VALUE PV BAC
SCHEDULE
AC VARIANCE
COST
VARIANCE
EV
SLIPPAGE
TIME
NOW
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Slide 36
In Alphabetical Order
Actual Costs Earned Value Planned Value
Minus Minus
CV = = SV
CPI = = SPI
Divided By Divided By

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Slide 37
Forecasting - ETC
 ETC based on new estimate
 ETC based on atypical variances
◦ ETC = BAC-EV
 ETC based on typical variances
◦ ETC = (BAC-EV)/CPI
 ETC based on both the CPI & SPI
◦ ETC = (BAC-EV)/(CPI*SPI)
BAC = Budget at Completion

BAC-EV = Remaining Work
VAC = Variance at Completion
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Slide 38
Forecasting - EAC
 Using a new estimate
◦ EAC = AC + ETC
 Using remaining budget
◦ EAC = AC + (BAC-EV)
 Using CPI
◦ EAC = AC + ((BAC-EV)/CPI)
 Using both CPI & SPI
◦ EAC = AC + ((BAC-EV)/(CPI*SPI))

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Slide 39
Forecasting - TCPI
 The calculated projection of cost
performance that must be achieved on the
remaining work to meet a specified
management goal.
 Using BAC
◦ TCPI = (BAC – EV) / (BAC – AC)
 Using EAC
◦ TCPI = (BAC - EV) / (EAC - AC)
 VAC = BAC - EAC

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Slide 40
Burndown Chart
2000
Work Remaining
1800
1600
1400
1200
1000
800
600
400
200
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

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Slide 41
Burndown Chart
Work Remaining / Rate = Days to Completion
2000
1800
Work Remaining
1600
1400
1200
1000
800
600
400
200
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
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Slide 42
To show when the product will be released use a Burn Up Chart
Forecast showing scope creep

Forecast
Productivity
Time
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Review Questions – Part 1:
1. Which of the following variables represents the budgeted cost for the work
scheduled to be completed up to a given point?
A. Actual cost
B. Planned value
C. Earned value
D. Estimate at completion
2. Which of the following variables represents the budgeted amount for the work
completed on the scheduled activity up to a given point?
A. Planned value
B. Actual costs
C. Estimate to completion
D. Earned value
3. Which of the following variables represents the total cost incurred in

accomplishing work on the scheduled activity during a specific time period?
A. Actual costs
B. Summary costs
C. Earned value
D. Planned value
4. Which of the following variables represents the amount of additional money that
needs to be spent to complete the project?
A. EAC
B. ETC
C. CPI
D. SPI
5. Which of the following variables represents the total amount of money that is
estimated to be spent when the project is completed?
A. ETC
B. CPI
C. EAC
D. SPI
6. Which of the following variables represents the formula: Earned Value minus
Actual Costs?
A. CV
B. CPI
C. SV
D. SPI
7. Which of the following variables represents the formula: Earned Value minus
Planned Value?
A. SPI
B. CV
C. CPI
D. SV
8. Which of the following variables represents the formula: Earned Value divided by
Actual Costs?
A. CV
B. SPI
C. SV
D. CPI
9. Which of the following variables is represented by the formula: Earned Value

divided by the Planned Value?
A. SPI
B. SV
C. CPI
D. CV
10. Which of the following is used to forecast project costs at completion?

A. CPI
B. SPI
C. Cumulative CPI
D. Cumulative SPI
11. Which of the following is used to display earned value data over time?
A. A Gantt chart
B. An S-curve
C. An EV table
D. A cost & schedule baseline chart
12. Your boss enters your office and asks for the cost variance on your project that
has an AC of $225, a PV of $200, and an EV of $180. What value do you provide
them?
A. -45
B. -20
C. 0.80
D. 0.90
them?
A. -30
B. 0.95
C. 0.92
D. -20
them?
A. 10
B. 5
C. 1.11
D. 1.25
15. Your boss enters your office and asks for the schedule variance on your project
that has an AC of $45, a PV of $40, and an EV of $50. What value do you
provide them?
A. 10
B. 5
C. 1.11
D. 1.25
Review Questions – Part 2:
1. After reviewing a series of tasks being completed by the team, you determine
they are focusing on defining positive value. Which of the listed tasks does not
belong in that determination?
A. Define deliverables by identifying units that can be produced incrementally
in order to maximize their value to stakeholders while minimizing non-
value added work.
B. Refine requirements by gaining consensus on the acceptance criteria for
features on a just-in-time basis in order to deliver value.
C. Select and tailor the team's process based on project and organizational
characteristics as well as team experience in order to optimize value
delivery.
D. Plan for small releasable increments by organizing requirements into
minimally marketable features/minimally viable products in order to allow
for the early recognition & delivery of value.
2. You and a coworker are arguing about the advantages of using Agile
development. Which of the following might you list as a key advantage?
A. Small releasable increments that offer early recognition and delivery of
value.
B. An increased number of increments that ensure the team identifies and
responds to risks early.
C. Obtain more frequent customer feedback through retrospective reviews at
the end of each iteration.
D. Prioritization of business value through constant delivery of small
increments.
3. Which of the following statements concerning value driven delivery is NOT true?
A. Agile's notion of value driven delivery says that every project has at its
center a responsibility to deliver real business value.
B. Agile believes it is critical that project deliver the most important features
first while also considering technical dependencies and risks.
C. Value-driven delivery represents the big picture view, the wearing of the
sponsor's hat when making decisions.
D. Value driven delivery is the focus of the project once it reaches execution
processes.
4. The team is working to determine the business value for the project all of the
following EXCEPT ________________ represent techniques the team might
use.
A. Benefit measurement methods
B. Constrained optimization methods
C. Both A and B are used to determine business value
D. None of the above are used to determine business value
5. Linear programming is an example of what type of project selection criteria?

A. Regression analysis
B. Benefit cost measurement
C. Quantitative scoring
D. Constrained optimization
6. Your company is evaluating three different projects, but can do only one. Project
A has an NPV of $120,000 and will take 6 years to complete. Project B will take
3 years and has and NPV of $91,500 and Project C has an NPV of $83,000.
Based on this information, which project would you pick?
A. Project A
B. Project B
C. Project C
D. Not enough information to determine
7. What is the Present Value of a project that is forecasted to have a future value of
1,020.87 USD in five years assuming an 8% rate of return?
A. $1,750
B. $1,500
C. $1,250
D. $1,000
8. What is the Present Value of a project that is forecasted to have a future value of
18,782.87 USD in three years assuming a 10% rate of return?
A. $20,000
B. $22,500
C. $25,000
D. $27,500
9. What is the future value of a project believed to have a present value of 19,000
USD if you assume a four year term and a three percent rate of return?
A. $20,793.41
B. $21,384.67
C. $22,621.83
D. $23,112.14
10. What is the future value of a project believed to have a present value of 16,000
USD if you assume a three year term and a 10.25 percent rate of return?
A. $21,441.53
B. $22,375.14
C. $23,648.16
D. $24,110.13
11. Which of the following terms represents the calculation used to determine the
value of a project in today's dollars minus its costs and is used for comparative
purposes?
A. Future value
B. Present value
C. Net present value
D. Internal rate of return
12. When determining the business value of a project, which of the following terms
represents the money or value the organization receives back as a measure
against its investment?
A. Future value
B. Present value
C. Net present value
D. Internal rate of return
13. You have been asked to choose one of three projects. Project A has an NPV of
U.S. $17,000. Project B has an NPV of U.S. $32,000. And Project C has an
NPV of U.S. $39,000. What is the opportunity cost of selecting Project B?
A. U.S. $39,000
B. U.S. $32,000
C. U.S. $17,000
D. U.S. $7,000
14. The team has just finished reviewing your value stream map to find delays, waste
and constraints. What should it do next?
A. Develop a roadmap for creating the optimized state.
B. Create a new value stream map of the desired future state of the process,
optimized to remove or reduce delays, waste & constraints.
C. Identify the product or service that you are analyzing.
D. Create a value stream map of the current process, identifying steps,
queues, delays, & information flows.
15. The team has just finished developing a roadmap for the optimized state as part
of a value stream mapping exercise. What should you do next?
A. Review the map to find delays, waste & constraints.
B. Create a new value stream map of the desired future state of the process,
optimized to remove or reduce delays, waste & constraints.
C. Plan to revisit the process in the future to continually improve.
D. Identify the product or service that you are analyzing.
16. A large part of value stream mapping is calculating something called _______.
A. Mission critical time
B. Total cycle time
C. Total project time
D. Total time
17. Mathematically, Total Cycle Time is defined by which of the following equations?
A. Value Added Time + Non-Value Added Time = TCT
B. Overall Cycle Time + Non-Value Added Time = TCT
C. Value Added Time - Non-Value Added Time = TCT
D. Overall Cycle Time - Non-Value Added Time = TCT
18. Mathematically, the Process Cycle Efficiency is defined by which of the following
equations?
A. Total Cycle Time / Value Added Time
B. Value Added Time/ Overall Cycle Time
C. Overall Cycle Time / Total Cycle Time
D. Value Added Time / Total Cycle Time
19. Which of the following are NOT part of Taiichi Ohno's acronym TIMWOOD?
A. Transportation
B. Waiting
C. Income
D. Overproduction
20. Which of the following is NOT an Agile prioritization technique?

A. Monopoly Money
B. Moscow Mule
C. Dot Voting
D. CARVER
21. When Professor Noriaki Kano created his customer satisfaction and product
development theory, which of the following was one of his categories of customer
preferences?
A. Technical needs
B. Sponsor needs
C. Excitement needs
D. Fundamental needs
22. Which of the following prioritization techniques has each feature rated by benefits
for having, not having, cost of producing, risks, etc., and a score is calculated
using a weighting formula predefined by the team?
A. Requirements prioritization model
B. Relative prioritization model
C. CARVER
D. Kano analysis
23. Which of the following terms represents the group of User Stories or package of
features that delivers the fewest number of features that someone would be
willing to pay money to obtain?
A. Base feature set
B. Baseline feature set
C. Minimally marketable features
D. Minimum feature set
24. A member of your team suggest the use of a Story Map to improve the team's
project understanding. Which of the following best describes the purpose of a
Story Map?
A. Story Maps present a visual way of seeing all the features in a project.
B. Story Maps present a visual method for understanding the business need.
C. Story Maps present a basic chronology of the project.
D. Story Maps present a basic understanding of the project justification.
25. Within a Story Map where would you find the product backbone or MMF?
A. The MMF or product backbone is not located on a Story Map.
B. The MMF or product backbone is located on the left of the Story Map.
C. The MMF or product backbone is located on the bottom of the Story Map.
D. The MMF or product backbone is located on the top of the Story Map.
26. When dealing with project risks, which of the following account for up to 90% of
the risks the team might encounter?
A. Known unknowns
B. Unknown unknowns
C. Critical risks
D. Unbudgeted risks
27. When dealing with project risk on an Agile project, which of the following
statements is NOT true?
A. Agile project typically have shorter timelines before a product is ready for
release.
B. Customers receive the most important features first hereby reducing risk.
C. At the latter stages of the project the customer often must decide to
continue the project or lose less important features.
D. At the end of the project the customer decides whether or not to accept all
the features.
28. If the project has a best case estimate of U.S. $10,000 with a probability of 20%,
a most likely case estimate of U.S. $12,000 with a probability of 50%, and a
worst case estimate of U.S. $14,400 with a probability of 30% what is the EMV
for the project?
A. U.S. $12,320
B. U.S. $12,400
C. U.S. $13,010
D. U.S. $13,260
for the project?
A. U.S. $19.190
B. U.S. $19,515
C. U.S. $20,110
D. U.S. $20,350
for the project?
A. U.S. $30.190
B. U.S. $31,560
C. U.S. $32,219
D. U.S. $33,350
31. You must choose between A or B. A will cost $650K & B will cost $467K. There
is a 56% chance that A will be successful, with a gain of $1,800K. If A fails there
it loses $900K. There is a 67% B will be successful, with a gain of $950K. If B
fails it loses $670K. What is the value of the best alternative?
A. U.S. $-38,000
B. U.S. $38,000
C. U.S. $-51,600
D. U.S. $51,600
32. A will cost $54K & B will cost $90K. There is a 54% chance that project A will be
successful, & have a $206,540 gain. If A fails it will have a loss of $90.5K. There
is a 61% B will be successful & have a $269K gain. If B fails there will be a loss
of $118K. Which do you choose?
A. Project A
B. Project B
C. The projects offer the same valuation.
D. There is not enough information to determine.
33. A will cost U.S. $300K & B will cost $255K. There is a 67% chance A will be
successful & result in a $650K gain. If A fails there will be a loss of $310K. There
is a 58% B will be successful, & that will result in a $650K gain. If B fails there will
be a loss of $225K. What is the value of the best alternative?
A. U.S. $60,700
B. U.S. $27,500
C. U.S. $33,200
D. U.S. $51,600
34. Most Agile methodologies flexes which leg of the project management triangle?
A. Time
B. Cost
C. Quality
D. Scope
35. Which of the following Agile methodologies uses the concept of "money for
nothing and change for free" as a basis for contracting?
A. Scrum
B. DSDM
C. Feature Driven Development
D. Extreme Programming
36. Little's Law states that Cycle time is proportional to what?

A. The size of the queue
B. The work in progress
C. The size of the team
D. The length of the schedule
37. In which area does the acronym IKIWISI MOST apply?

A. Time
B. Cost
C. Scope
D. Quality
Answer Key – Part 1:
1. B
Planned value.
2. A
Planned value.
3. A
Actual costs.
4. B
ETC.
5. C
EAC.
6. A
CV.
7. D
SV.
8. D
CPI.
9. A
SPI.
10. C
Cumulative CPI.
11. B
An S-curve.
12. A
-45.
13. D
-20.
14. B
5.
15. A
10.
Answer Key – Part 2:
1. D
LGd course manual p. 104 - The tasks found in the Define positive value group
include: Define deliverables by identifying units that can be produced
incrementally in order to maximize their value to stakeholders while minimizing
non-value added work; Refine requirements by gaining consensus on the
acceptance criteria for features on a just-in-time basis in order to deliver value;
Select and tailor the team's process based on project and organizational
characteristics as well as team experience in order to optimize value delivery.
2. A
LGd course manual p. 104 - Be careful here as several items are close to true,
but the Value Driven Delivery area lists three specific tasks Agile uses to avoid
potential downsides: Plan for small releasable increments by organizing
requirements into minimally marketable features/minimally viable products in
order to allow for the early recognition and delivery of value. Limit increment size
and increase review frequency with appropriate stakeholders in order to identify
and respond to risks early on and at minimal cost. Solicit customer and user
feedback by reviewing increments often in order to confirm and enhance
business value.
3. D
LGd course manual p. 105 - Agile carries this simple idea one step further by
also contending that it is critical that project deliver the most important features
first while also considering technical dependencies and risks. Key is
remembering why projects are initiated in the first place. Projects are undertaken
to generate some type of business value, be it to produce a benefit, product or
service. Even safety and regulatory compliance projects can be expressed in
terms of business value by considering the business risk and impact of not
undertaking them. If value then is the reason for doing projects, value driven
delivery is the focus of the project throughout the project planning, execution, and
control processes. Value-Driven Delivery represents the big picture view, the
wearing of the sponsor's hat when making decisions.
4. C
LGd course manual p. 105 - There are two ways to determine business value.
These include: benefit measurement methods and constrained optimization
methods.
5. D
LGd course manual p. 105 - Constrained optimization methods represent
advanced mathematical models used to calculate project value. Methods
included in this class are linear, integer, dynamic and multi-objective
programming.
6. A
LGd course manual p. 106 - The years are irrelevant to this question as the
whole point of NPV is to convert the project value into today's dollars. In this
case project A is the correct choice with an NPV of $120,000.
7. B
LGd course manual p. 106 - The Present Value, or discounting, refers to a Future
Value that has been discounted to express it in today's currency. For example,
imagine you had U.S. $100 buried in a coffee can in your backyard. Twenty-five
years later you dig up the coffee can and find the U.S. $100 bill. Does it still have
the same purchasing power? Absolutely not! Inflation has made that U.S. $100
worth significantly less. This equation also is not often seen on the exam, but it
is necessary to understand the next formula. The equation for the Present Value
is: PV = FV / (1 + i)n.
8. C
LGd course manual p. 106 - The Present Value, or discounting, refers to a Future
Value that has been discounted to express it in today's currency. For example,
imagine you had U.S. $100 buried in a coffee can in your backyard. Twenty-five
years later you dig up the coffee can and find the U.S. $100 bill. Does it still have
the same purchasing power? Absolutely not! Inflation has made that U.S. $100
worth significantly less. This equation also is not often seen on the exam, but it
is necessary to understand the next formula. The equation for the Present Value
is: PV = FV / (1 + i)n
9. B
LGd course manual p. 106 - The Future Value represents the value of an
investment at some future point based upon a provided interest rate. Very few, if
any, test candidates have to calculate the future value, but understanding it is
necessary to answer comparative questions you might see. It is defined by the
formula: FV = PV * (1 + i)n
10. A
LGd course manual p. 106 - The Future Value represents the value of an
investment at some future point based upon a provided interest rate. Very few, if
any, test candidates have to calculate the future value, but understanding it is
necessary to answer comparative questions you might see. It is defined by the
formula: FV = PV * (1 + i)n
11. C
LGd course manual p. 106 - The Net Present Value is almost identical to the
present value. In the Present Value calculation you discount the value, typically
representing a revenue stream, to account for inflation or some other similar rate.
Net Present Value does the same thing, but it also takes into consideration the
money that must be spent to complete the project over time. To do so it costs
the Present Value from the net costs to obtain the NPV.
12. D
LGd course manual p. 106 - In an Internal Rate of Return equation, it is the
interest rate that must be determined. Unfortunately, there is no simple equation
to calculate the internal rate of return. To solve for the IRR you must use the
NPV calculation and select the middle most interest rate of the four potential
answers. You are looking for an interest rate which produces an NPV of zero.
Based upon the result from the first calculation you can determine if you need a
larger or smaller value. You should not have to calculate the NPV more than
twice to determine the correct IRR.
13. A
LGd course manual p. 107 - Opportunity cost is the value of the next highest
alternative assuming the alternatives are mutually exclusive. It defines what you
are giving up by making the choice. In this case, the correct answer is U.S.
$39,000.
14. B
LGd course manual p. 108 - Value Stream Mapping is a lean management
technique for analyzing the current and future state for the series of events that
tracks a specific product or service from beginning to end. It is a visual technique
that uses something called a "Visual Map" The process of Value Stream
Mapping consists of six steps. These steps include: Identify the product or
service that you are analyzing; Create a value stream map of the current
process, identifying steps, queues, delays, & information flows; Review the map
to find delays, waste & constraints; Create a new value stream map of the
desired future state of the process, optimized to remove or reduce delays, waste
& constraints; Develop a roadmap for creating the optimized state; and plan to
revisit the process in the future to continually improve.
15. C
LGd course manual p. 108 - Value Stream Mapping is a lean management
technique for analyzing the current and future state for the series of events that
tracks a specific product or service from beginning to end. It is a visual technique
that uses something called a "Visual Map". The process of Value Stream
Mapping consists of six steps. These steps include: Identify the product or
service that you are analyzing; Create a value stream map of the current
process, identifying steps, queues, delays, & information flows; Review the map
to find delays, waste & constraints; Create a new value stream map of the
desired future state of the process, optimized to remove or reduce delays, waste
& constraints; Develop a roadmap for creating the optimized state; and plan to
revisit the process in the future to continually improve.
16. B
LGd course manual p. 109 - A big part of Value Stream Mapping is calculating
something called Total Cycle Time. Total Cycle Time represents all the
processes, steps, machine work and anything else through which a product must
pass before it is considered "finished". It is often broken into several different
types of time including: Manual Cycle Time, Machine Cycle Time, Auto Cycle
Time, and Overall Cycle Time.
17. A
LGd course manual p. 109 - Mathematically, the Total Cycle Time or TCT is
defined as the Value Added Time + Non-Value Added Time.
18. D
LGd course manual p. 109 - In addition to the Total Cycle Time, you must be
prepared to calculate the Process Cycle Efficiency which represents the Value
Added Time divided by the Total Cycle Time. According to Six Sigma, a lean
process is one in which the Value Added time in the process is 25% or more of
the total time in the process.
19. C
LGd course manual p. 109 - Here are the TIMWOOD seven forms of waste
translated from Lean Manufacturing to software development: Partially Done
Work; Extra Processes; Extra Features; Task Swiching; Waiting; Motion; and
Defects.
20. B
LGd course manual p. 110 - When the team is focused on Value-Driven Delivery
it has a customer valued prioritization. This means working on the things that
yield the greatest return for the customer. The primary tool used by the team
differs based on the Agile methodology being used. Techniques include
MoSCoW Prioritization Scheme; Monopoly Money; 100-Point Method; Dot Voting
/ Multi-Voting; CARVER; Kano Analysis; Requirements Prioritization Model; and
Relative Prioritization or Ranking.
21. C
LGd course manual p. 111 - Kano Analysis represents a customer satisfaction
and product development theory first developed in 1984 by Professor Noriaki
Kano, and was originally designed to classify customer preferences into three
categories: Performance Needs; Basic Needs; and Excitement Needs.
22. B
LGd course manual p. 112 - In the Requirements prioritization model each
feature is rated by benefits for having, not having, cost of producing, risks, etc.,
and a score is calculated using a weighting formula predefined by the team. This
method allows the team to value certain items as having greater importance by
increasing their weighting in the formula. Commonly, the scores range from one
to nine. This model was originally created by Karl Wiegers.
23. C
LGd course manual p. 112 - The Minimally Marketable Features or MMF
represents the minimal functionality set, a fancy way of saying a group of User
Stories or package of features, that delivers the fewest number of features that
someone would be willing to pay money to obtain. These represent distinct, and
deliverable features of the system that provide significant value to the customer.
24. A
LGd course manual p. 113 - Story Maps present a visual way of seeing all the
features in a project. It is typically read along two axis. Time is represented
along the X-axis with columns often placed for releases or iterations on smaller
projects. The Y-axis is used to represent how important the User Story is to the
customer. At the top are the most important Stories, referred to as the product
backbone or the MMF. Below that appears the walking skeleton and then more
and more optional features.
25. D
LGd course manual p. 113 - Story Maps present a visual way of seeing all the
features in a project. It is typically read along two axis. Time is represented
along the X-axis with columns often placed for releases or iterations on smaller
projects. The Y-axis is used to represent how important the User Story is to the
customer. At the top are the most important Stories, referred to as the product
backbone or the MMF. Below that appears the walking skeleton and then more
and more optional features.
26. A
LGd course manual p. 114 - Unknown unknowns cannot be planned for and
require management reserves or general contingency. Up to 90% of the risks on
a project fall into the known unknown category and can be identified.
27. D
LGd course manual p. 114 - In waterfall it can be a long time before a product is
ready for release. In Agile this can be shorter, sometimes only a few weeks.
This serves to reduce project risk because the customer receives the most
important features very early on in the process. As the project comes to its
deadline the team is typically working to deliver far less important features that in
many cases could be excluded if required without impacting business value.
This puts the customer in a position to make the decision as to whether or not
they want the desired features without losing the critical value.
28. A
LGd course manual p. 118 - To get the correct answer you must first realize you
are dealing with three mutually exclusive options. You cannot simultaneously
have the best and worst case scenarios. Therefore, your probabilities must sum
to 100%. Use the calculation probability * result for each case and then add the
results together to get the EMV.
29. B
30. C
31. A
LGd course manual p. 118 - To answer this question you must calculate the
expected monetary value of each choice using the decision tree model found in
your LGd training guide and then compare the options. Whichever option has
the greatest value is the one you should choose.
32. B
33. C
34. D
LGd course manual p. 125 - Agile Contracting fixes the time and cost legs of the
triangle while leaving the scope leg flexible. Agile Development then requires the
prioritization of the features and the customer to make decisions about the
scope. This inversion of the triangle priorities ensures the customer has greater
control of the product, at least theoretically, but it requires much greater
communication between the customer and team to prevent surprises.
35. A
LGd course manual p. 125 - Jeff Sutherland, one of the originators of Scrum
uses the phase, "money for nothing and change for free" to describe his notion of
Agile Contracting. In this notion, the customer is allowed to terminate the project
early and has the flexibility to make changes. His idea uses a standard Firm
Fixed Price Contract, but adds time and materials for and additional work plus a
change for free clause the customer works with the team on every iteration using
the Scrum process. This means daily.
36. A
LGd course manual p. 126 - Cycle Time represents how long the customer must
wait before receiving any benefit from the features created. Little's Law states
that Cycle Time is proportional to the size of the queue, or how much Work in
Progress the team has. This concept is displayed using a Cumulative Flow
Chart.
37. C
LGd course manual p. 127 - IKIWISI stands for an old truism from many
customers. It means I'll Know It When I See It, and points to the common
problem many development teams face. Sometimes the customer doesn't know
or fully understand what they want in terms of the features of the product until
they see it. Only by touching and using a product can they understand its
characteristics and fully understand how they would use it.

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Agile Certified Practitioner (ACP) Exam Prep

Chapter 05 - Value-Driven Delivery

Domain Tasks – Define Positive Value

Domain Tasks – Avoid Potential Downsides

v. 6.0- © Copyright and all rights reserved –

Domain Tasks – Prioritization

Domain Tasks – Incremental Development

v. 6.0- © Copyright and all rights reserved –

 Value-Driven Delivery – Focusing on delivering real business value. The most

v. 6.0- © Copyright and all rights reserved –

v. 6.0- © Copyright and all rights reserved –

 Internal Rate of Return - Average rate

v. 6.0- © Copyright and all rights reserved –

v. 6.0- © Copyright and all rights reserved –

Value Stream Mapping

v. 6.0- © Copyright and all rights reserved –

Value Stream Mapping You & friend

Cake Bakery Checkout Unpack & You & friend

Cake Bakery Checkout Unpack & You & friend

Cake Bakery Checkout Unpack & You & friend

Value Stream Mapping

 TCT = (1+2+2+2+10) + (4+6+15+5) = 47

v. 6.0- © Copyright and all rights reserved –

 Poppendieck’s 7 Lean Wastes Manufacturing

Motion The effort required to communicate or move information • Distributed teams

Defects Defective documents or software that needs correction • Requirements defects

v. 6.0- © Copyright and all rights reserved –

 MoSCoW Prioritization Schemes

 Monopoly Money = to total project budget

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 Basic Needs – Having these requirements will NOT result in

 Excitement Needs – Customers are delighted when these are

v. 6.0- © Copyright and all rights reserved –

v. 6.0- © Copyright and all rights reserved –

 Requirements Prioritization Model

 Relative Prioritization - A simple list removes the

A Sample Story Map

Story Story Story Story Story Story Story Story

Story Story Story Story Story

 Risk – an uncertain event or condition

11. Project Risk Management

Negative risks are anti-value.

Major Risk Classes

v. 6.0- © Copyright and all rights reserved –

Agile Helps Mitigate Risks

Agile Helps Mitigate Risks

Agile Helps Mitigate Risks

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Successful Agile projects are

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Expected Monetary Value (EMV)

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Decision Tree Analysis

Conservative EMV = $7,000

Aggressive EMV = $110,000

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 Use EMV to determine risk value

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Functionality Fixed Resources Time

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Completi Graduated Total Fee

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