PMP Vocabulary — Project Management Certification Language
5 exercises — critical path & float, earned value management (PV/EV/AC/CPI/SPI), risk response strategies, RACI matrices, and contingency vs. management reserve. The precise English vocabulary the PMP exam tests.
Why precise PMP vocabulary matters
Critical path / float — which tasks can slip without delaying the project
CPI / SPI — numeric, objective language for cost and schedule health
Avoid / mitigate / transfer / accept / escalate — five distinct risk response strategies, often confused
RACI — exactly one Accountable owner per task, distinct from Responsible
Contingency reserve vs. management reserve — known unknowns vs. unknown unknowns
0 / 5 completed
1 / 5
A project schedule shows Task A (5 days) → Task B (3 days) → Task D (2 days) as one path, and Task A (5 days) → Task C (7 days) → Task D (2 days) as another path. Both paths converge at Task D. What is the critical path?
The critical path is the longest sequence of dependent activities through the project network — it determines the minimum time the project can take. Here, A→C→D totals 14 days versus A→B→D at 10 days, so A→C→D is critical.
Key related terms:
Float (or slack) — the amount of time a task can be delayed without delaying the project finish date. Critical path tasks have zero float by definition.
Critical Chain Method — a related scheduling technique that also accounts for resource constraints, not just task dependencies.
Exam trap: a path with fewer tasks or shorter individual durations is not automatically critical — only the total duration of the path matters. If Task C slips by even one day, the whole project slips by one day (assuming no float is used elsewhere).
2 / 5
A project has Planned Value (PV) = $50,000, Earned Value (EV) = $40,000, and Actual Cost (AC) = $55,000 at the reporting date. What do the Cost Performance Index (CPI) and Schedule Performance Index (SPI) tell the project manager?
Earned Value Management (EVM) formulas: CPI = EV / AC (cost efficiency) and SPI = EV / PV (schedule efficiency). A value below 1.0 for either index signals underperformance; above 1.0 signals overperformance.
Here: CPI = 40,000 / 55,000 ≈ 0.73 — for every dollar spent, only $0.73 of planned work value was earned (over budget). SPI = 40,000 / 50,000 = 0.80 — only 80% of the planned work has been completed by this point (behind schedule).
Other core EVM terms tested on the exam:
PV (Planned Value) — the budgeted cost of work scheduled to be done by this point
EV (Earned Value) — the budgeted cost of work actually completed
AC (Actual Cost) — the real cost incurred for the work completed
EAC (Estimate at Completion) — the forecasted total cost of the project given current performance
ETC (Estimate to Complete) — the forecasted cost of the remaining work
VAC (Variance at Completion) — BAC minus EAC
These indices give a project manager an objective, numeric way to describe project health rather than a vague "things are a bit behind."
3 / 5
A risk register lists a risk with the response "Purchase insurance to cover the financial impact if this risk occurs." Which risk response strategy does this represent, and how is it different from mitigation?
Transfer shifts the ownership and/or financial consequence of a risk to a third party, most commonly through insurance, warranties, performance bonds, or outsourcing/contracts. Crucially, transfer does not reduce the probability of the risk occurring or its non-financial impact — it only shifts who bears the cost.
The five negative risk response strategies (PMBOK):
Avoid — change the project plan to eliminate the threat entirely (e.g. remove a risky scope item)
Mitigate — take action to reduce the probability and/or impact of the risk (e.g. add extra testing, use a proven technology instead of a new one)
Transfer — shift the financial impact to a third party (insurance, contract clauses) — the risk event can still happen
Accept — acknowledge the risk and take no proactive action (passive acceptance), or set aside a contingency reserve for it (active acceptance)
Escalate — the risk is outside the project manager's authority or the project's scope, so it is raised to programme or portfolio level
Exam distinction: mitigate reduces the risk itself; transfer redistributes who pays if it happens anyway.
4 / 5
In a RACI matrix, the "Marketing Manager" is marked as "C" (Consulted) for the task "Finalise product launch date," while the "Product Owner" is marked as "A" (Accountable). What does this distinction mean in practice?
RACI = Responsible (does the work), Accountable (owns the outcome and has final sign-off — there should be exactly one "A" per task), Consulted (provides input, two-way communication, before or during the work), Informed (receives updates, one-way communication, typically after a decision or milestone).
Here, the Product Owner (Accountable) makes the final call and answers for the outcome, while the Marketing Manager (Consulted) is asked for input — e.g. campaign readiness — before the decision is finalised, but does not have decision authority.
Common exam trap: confusing Responsible and Accountable. Multiple people can be Responsible for pieces of work, but PMI stresses that each task should have exactly one Accountable person to avoid diffusion of ownership. A stakeholder engagement or communications plan will often reference RACI to clarify exactly who needs to sign off versus who just needs updates — precise use of this vocabulary avoids the common workplace confusion of "I thought you were deciding this."
5 / 5
A project budget includes $20,000 set aside for "known unknowns" — identified risks with quantified potential cost impact, calculated using quantitative risk analysis — separate from $15,000 held by senior management for "unknown unknowns" that cannot be identified in advance. The first amount is the _____, and the second is the _____.
The contingency reserve ($20,000) covers known unknowns — specific, identified risks in the risk register with an estimated probability and impact, calculated through quantitative risk analysis (e.g. Expected Monetary Value). It is typically part of the cost baseline and can be used at the project manager's discretion for those identified risks.
The management reserve ($15,000) covers unknown unknowns — risks that were not, and could not have been, identified in advance. It sits outside the cost baseline and typically requires approval from management/sponsor before it can be tapped, since it represents budget beyond the performance measurement baseline.
Why this distinction matters on the exam: "cost baseline" or "total project budget" questions often hinge on whether a reserve is included in the baseline (contingency, yes) or added on top of it (management reserve, no). In workplace terms: "we've got contingency for the risks we already know about, but if something totally unexpected happens, that comes out of management reserve and needs sponsor sign-off."