PM0010- Introduction to Project Management- Cover Page

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Master of Business Administration-MBA Semester III

Name: Ashwatha Narayanan.B

Roll No: 511032634

Learning Centre: GLACE

Learning Centre Code: 2815

Course: Master of Business Administration

Subject: Introduction to Project Management

Subject Code PM0010

Semester: III

Assignment No: 1236

Date of Submission at the Learning Centre: 06/12/2010

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ASSIGNMENTS Set 1

Q.1 Explain the following

a. Project Vs. Program Vs. Portfolio

b. Project work and Traditional functional work

Ans:

Definition of a Project

The term project has multiple definitions. Some of the definitions are as

follows:

The British standard BS6079[2] defines a project as a unique set of coordinated

activities with definite starting and finishing points, undertaken by an

individual, or organisation to meet specific objectives within defined schedule,

cost and performance parameters.

A general definition is given by Mr. J.M Juran[3], a quality guru, who defines

project as a problem scheduled for solution. PMBoK[4] defines project as "a temporary endeavour undertaken to produce a

unique product, service or result." A general definition for project is a "problem

scheduled for solution".

It is a temporary endeavour, with a defined beginning and end date, defined

responsibilities, defined budget, and undertaken to meet unique goals and

objectives, usually to bring about beneficial change or added value.

The following are some examples of project initiatives:

Setting up a production facility

Constructing National highways

Constructing a dam

Developing a software application

Implementing a Management Information System

Building a new arc furnace

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Relocating a production facility

Let us get familiar with some of the terms that we will commonly come across

during this course.

Program Management

Program management is the process of managing related projects of an

organisation, in order to improve the organisations performance.

Portfolio Management

Portfolio management is a process of managing the assets to hold in a portfolio

which includes choosing and monitoring of appropriate investments and

allocating the funds accordingly.

Difference between Project, Program and Portfolio Management

Project Management: A project has a definite start and end date with a clearly

mentioned deliverable produced and project management is the application of

knowledge, skills, tools, techniques and processes to effectively manage a team

to achieve this final deliverables, which means the management of a specific

project. Project management focuses on delivering the specific objectives of the

project.

Program Management: A program is a group of related projects which are

managed together to obtain specific benefits and which cannot be obtain if the

projects are managed individually. Program management is focused on

achieving the strategic objectives of the integrated project.

Portfolio Management: A portfolio is the collection of projects or programs

grouped together to facilitate effective management of effort to meet strategic

business objectives and this typically includes identifying, and prioritisingprojects and programs to achieve specific strategic business objectives.

If you consider projects as the bottom of a hierarchy then programs sit above

them in the middle of the hierarchy and address a related set of projects. This

allows the portfolio management level to stand at the top of this hierarchy.

The primary roles of a project manager, program manager and portfolio

manager differs, however, many organisations blend these roles together and

treat them as basic project management.



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Differences between Project Work and Traditional Functional Work

Project work and traditional functional work differ in many ways. It is

important to understand these differences.

Functional work is routine ongoing work. Each day machine operators, car

salesmen, secretaries, accountants, financial analysts and quality inspectors

perform functional work that is routine, notwithstanding some variations from

day to day. The functional worker gets training from a manager assigned to the

specific function, and the manager supervises and manages the worker

according to standards of productivity and quality set for the particular function.

In contrast to functional work, project work is a temporary endeavour

undertaken to create a unique, non-routine product or service. A project

manager manages a specific project with people and other resources assigned to

him only for project management support on the specific project, and not on an

ongoing basis. The project manager is responsible for the approved objectives

of a project such as budget, schedule and specifications. Project terms are

typically not organised in the same hierarchical structure as that of functional

group.

Q.2 Compare Operation and project procurement. Also list and explain the

project procurement process.

Ans:

Operations Procurement and Project Procurement

The differences between the procurement carried out for the overall operation of

an organisation, and the procurement carried out for a specific project

Differences between Operations Procurement and Project Procurement

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Project Procurement Management Process

The project procurement method varies depending on the category of the

contracted product or service. The broad categories are:

Materials or products

Equipment or tools

Labours

Professional services

Totally engineered systems

Total project

Project Procurement Management generally involves the following:

Deciding to Make or Buy

Outsourcing the work for a Buy decision.

Managing risk (although risk management is often addressed separately, it is

noteworthy that contracts are, at their core, risk management tools.)

All procurement requires some level of planning. The intensity and the effort

required in planning depend on the complexity of the scope of work in the

procurement package.

For a manufacturing company deciding to starts a project, the make or buy

decision forms the first step in the procurement planning. This decision is basedon a cost comparison between make and buy, and the timely availability of

the manufacturing equipment or shop personnel for meeting deliveries without

adversely affecting their other job orders. Several companies in India exist,

wherein; the company or a division of the company already manufactures a

product, and the company is also executing projects for its clients which require

the same product as part of another project scope. For example, Larsen & Turbo

manufactures switchgear, pressure vessels, heat exchangers etc. These products

are also required in several electrical projects or petrochemical projects that

they execute for clients. Another example, Kamani Engineering manufactures

transmission towers, and also executes large power transmission projects for



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Power Grid Corporation of India, where the bulk of the transmission towers are

their in-house supply.

Q.3 Describe the role of project managers in Human resource management andcommunication management.

Ans:

Roles and Responsibilities of a Project Manager

Project Management is often the state and responsibility of an individual projectmanager. This individual rarely takes part directly in the activities that canproduce the end result, but strives to maintain the progress and the mutual

interaction and the tasks of different parties in such a way that it minimises therisks, maximises the benefits, and restricts the costs.

The project manager is responsible for ensuring the success of the project. Theproject managers responsibility begins by defining the project and scheduling theproject. A project manager is usually the project organisations representative forthe client and will have to determine and implement the accurate needs of theclient, which will be based on the knowledge of the firm the project manager isrepresenting. The project manager is responsible to adjust different internalprocedures of the contracting party and also form a close association with theselected representatives which is necessary in ensuring that the main issues of the

cost, the time, the quality and the client satisfaction be realised. If the projectbegins and if any of the team members is not clear on the scope of the project orif the project activities are not executed as scheduled, then the project manageris held responsible for it.

The work around defining the project involves understanding and agreeing on theoverall objectives, scope, time and budget for the project. It also includes definingand adopting a specific project management procedure which can be used tomanage the project. This does not mean all the tasks are to be accomplished bythe project manager himself. He has an entire team to support him for the tasks.

However, if there are any issues left unidentified in the project, the entire blamefalls on the project manager.

The roles and responsibilities of the project manager are quite simple andstraightforward. Firstly, the project manager should be able to establish andmaintain a balance between quality, cost, time and the customer. The projectexperience shows that the customer should be a prime focus area for a successfulprojects completion. Including the customer in all aspects of the project willdefinitely help towards project success.

Secondly, the project manager is the one, who is responsible for the successfuldelivery of the project. This involves meeting stakeholder expectations, the timeframes and the project goals. The project manager must therefore have a full



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understanding of what each stakeholder needs. Therefore a project manager hastwo very clear responsibilities i.e, balancing and delivery the project.

Project managers roles and responsibilities include the comprehension andimplementation of organisational project policies and procedures. They are also

required to maintain project staffs technical proficiency and productivity, andprovide training to them as and when required.

Roles of a Project Manager

Leading a project is like leading a department where there are people withdifferent backgrounds and skills, and the project manager has to co-ordinate withall the people to get desired overall result. The project manager should have theskills required to make the project go smoothly. This includes paying constantattention to communication, where it has to be made sure that the project

sponsors and the team members are clear on the boundaries and expectations,documenting the project details like the tasks, responsibilities, relationships andunderstanding the customer and business needs.

The project manager is responsible for documenting, in coordination with theproject sponsors, a definition of the project. The project manager then makes surethat the project is delivered on time, to budget and to the required qualitystandard within the agreed specifications. The project manager should ensure thatthe project is effectively resourced and should also manage the relationships witha wide range of groups which consists of all the project contributors. The projectmanager is also responsible for handling the work of consultants, allocating and

utilising resources in a proper manner and maintaining a co-operative, motivatedand successful team.

The general roles of a project manager are as follows:

Understand and apply the organisational project policies and procedures.

Maintain the project staffs technical skill and efficiency, and provide trainingwhen required.

Establish and maintenance of project quality.

Identify and procure the project infrastructure needs.

Develop project charter and obtain approval for the same.

Define project goals, objectives and success criteria.

Identify and document project constraints.

Identify and document project assumptions.



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Estimating the time

Estimating the cost

Developing the budget

Controlling the budget

Controlling the quality

Analysing risk

Managing risks and issues

Realising the benefits

Analysing scalability, interoperability and portability

Documenting the work

Maintaining customer relationship

Q.4 If the optimistic estimate of an activity is 12 days & pessimistic estimate is 18 days.

What is the variance of this activity?

Ans:

Estimated time of the project = (to + 4* tm + tp)

If three standard deviations are chosen for the optimistic and pessimistic times,then there will be six standard deviations between them. In this case the varianceof each activity completion time is given by

Variance= [(tp - to) / 6]2

. to=12,tp=18 . [(18-12)/6]2 = [6/6]2 =[1]2= 2

Variance = 2



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Project Evaluation and Review Technique

Project Evaluation and Review Technique (PERT) is a project management toolthat is designed to analyse and represent the tasks involved in project. Itschedules, organises and coordinates tasks within the project. It is used inconjunction with critical path method. It identifies the time needed to completeeach task and minimum time required to complete entire project.

The main objective of PERT is to facilitate decision making process and to reduceboth the time and cost required to complete a project. PERT is useful in verylarge-scale, one-time, non-routine, complex projects with a high degree of inter-task dependency, projects which require a series of activities, some of which mustbe performed sequentially and others that can be performed in parallel with otheractivities. PERT planning has following steps:

1. Identifying the specific activities and milestones: Activities are the tasks thatare required to complete a project. The milestones are the events which marks thebeginning and the end of the activities of the project. It is a good practice inproject management to list the tasks in table which can be expanded in later stageof project to include information on sequence and duration.

2. Determining the proper sequence of the activities: This step of PERT can bemerged with the activity identification step since the activity sequence is requiredfrom some tasks. Other tasks of the project may require more analysis todetermine the exact order in which they must be performed.

3. Constructing a network diagram: Based on the activity sequence information,network diagram can be drawn which shows the sequence of the serial and parallelactivities. Each activity is represented by a node in the network and the arrowdepicts the relation between activities.

4. Estimating the time required for each activity: Week is the commonly usedunit of time to track the activity completion period. The ability to deal withuncertainty in activity completion time is the most distinguishing feature of PERT.

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Q.5 Describe the following quality control tools:

a. Ishikawa diagram

b. Flow chart

c. Pareto chart

d. Scatter diagram

Ishikawa Diagram

The Ishikawa Diagram, also known as the Fishbone Diagram or the Cause-

and-Effect Diagram, is a tool used for systematically identifying and presenting

all the possible causes of a particular problem in graphical format. The

possible causes are presented at various levels of detail in connected branches,

with the level of detail increasing as the branch goes outward, i.e., an outer

branch is a cause of the inner branch it is attached to. Thus, the outermost

branches usually indicate the root causes of the problem.

The Ishikawa Diagram resembles a fishbone (hence the alternative name

"Fishbone Diagram") - it has a box (the 'fish head') that contains the statement

of the problem at one end of the diagram. From this box originates the main

branch (the 'fish spine') of the diagram. Sticking out of this main branch are

major branches that categorize the causes according to their nature.

In semiconductor manufacturing, 4 major branches are often used bybeginners, referred to as the '4 M's', corresponding to 'Man', 'Machine',

'Materials', and 'Methods'. Sometimes 5 branches are used ('5 M's'), with the

fifth branch standing for 'Measurement', or even 'M-vironment.' These 'M's' or

problem cause categories are used to classify each cause identified for easier

analysis of data. Of course, one is not constrained to use these categories in a

fishbone diagram.

Experienced users of the diagram add more branches and/or use different

categories, depending on what would be more effective in dealing with theproblem.

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The Ishikawa Diagram is employed by a problem-solving team as a tool

for collating all inputs (as to what are the causes of the problem they're

addressing) systematically and graphically, with the inputs usually coming from

a brainstorming session. It enables the team to focus on why the problem

occurs, and not on the history or symptoms of the problem, or other topics that

digress from the intent of the session. It also displays a real-time 'snap-shot' of

the collective inputs of the team as it is updated

FLOW CHART DEFINED

A typical definition of "Flow Chart" usually reads something like ...

A flow chart is a graphical or symbolic representation of a process. Each step in

the process is represented by a different symbol and contains a short description

of the process step. The flow chart symbols are linked together with arrows

showing the process flow direction.

AS-IS FLOWCHART

The first cool thing about flow charts is that they let you see the process flow at

a glance, so my first alternate definition of "Flow Chart" is a Snap Shot of

your Business Processes. This is commonly called an As-Is Flowchart. You

can tell a lot about the complexity (and often over-complexity) of many

business processes just by looking at an as-is flow chart of them - without even

reading the text in the symbols. You can easily see the flow of information and

materials, branches in the process, opportunities for infinite loops, the number

of process steps, inter-departmental operations, and more.

A Note on Flowchart Symbols

Different flow chart symbols have different meanings. The most common flow

chart symbols are:

Terminator: An oval flow chart shape indicating the start or end of

the process.

Process: A rectangular flow chart shape indicating a normal process

flow step.

Decision: A diamond flow chart shape indication a branch in the

process flow.

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Connector: A small, labeled, circular flow chart shape used to indicate

a jump in the process flow.

Data: A parallelogram that indicates data input or output (I/O) for a

process.

Document: used to indicate a document or report (see image in sampleflow chart below)

What is a Pareto Chart?

A Pareto Chart is a series of bars whose heights reflect the frequency or impact

of

problems. The bars are arranged in descending order of height from left to right.

This means the categories represented by the tall bars on the left are relatively

moresignificant than those on the right [Ref. 5]. The chart gets its name from the

Pareto

Principle, which postulates that 80 percent of the trouble comes from 20 percent

of

the problems. Viewgraph 1 highlights the elements of this definition.

Why should teams use Pareto Charts?

You can think of the benefits of using Pareto Charts in economic terms

(Viewgraph

2). A Pareto Chart breaks a big problem into smaller pieces (and) identifies the

biggest contributors. . . (It can) help us get the most improvement with the

resources

available by showing where to focus efforts in order to maximize achievements.

The

Pareto Principle states that a small number of causes accounts for most of the

problems. Focusing efforts on the vital few causes is usually a better use of

valuable resources [Ref. 1a].

When should we use a Pareto Chart?

A Pareto Chart is a good tool to use when the process you are investigating

produces data that are broken down into categories and you can count thenumber of

times each category occurs.

No matter where you are in your process improvement efforts, Pareto Charts

can be

helpful, . . . early on to identify which problem should be studied, later to

narrow

down which causes of the problem to address first. Since they draw everyone's

attention to the vital few important factors where the payback is likely to be

greatest,

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(they) can be used to build consensus. In general, teams should focus their

attention

first on the biggest problemsthose with the highest bars [Ref. 5].

Makingproblem-solvingdecisions isnt the only use of the Pareto Principle.

SincePareto Charts convey information in a way that enables you to see clearly the

choices that should be made, they can be used toset priorities for many

practical

applications in your command. Some examples are:

! Process improvement efforts for increased unit readiness

! Skills you want your division to have

! Customer needs

! Suppliers

! Investment opportunities

SCATTER DIAGRAM

What it is:

A scatter diagram is a tool for analyzing relationships between two variables.

One variable is

plotted on the horizontal axis and the other is plotted on the vertical axis. The

pattern of their

intersecting points can graphically show relationship patterns. Most often a

scatter diagram is used

to prove or disprove cause-and-effect relationships. While the diagram shows

relationships, it

does not by itself prove that one variable causes the other. In addition to

showing possible causeand-

effect relationships, a scatter diagram can show that two variables are from a

common cause

that is unknown or that one variable can be used as a surrogate for the other.

When to use it:

Use a scatter diagram to examine theories about cause-and-effect relationships

and to search forroot causes of an identified problem.

Use a scatter diagram to design a control system to ensure that gains from

quality improvement

efforts are maintained.

How to use it:

Collect data. Gather 50 to 100 paired samples of data that show a possible

relationship.

Draw the diagram. Draw roughly equal horizontal and vertical axes of the

diagram, creating a

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square plotting area. Label the axes in convenient multiples (1, 2, 5, etc.)

increasing on the

horizontal axes from left to right and on the vertical axis from bottom to top.

Label both axes.

Plot the paired data. Plot the data on the chart, using concentric circles toindicate repeated data

points.

Title and label the diagram.

Interpret the data. Scatter diagrams will generally show one of six possible

correlations

between the variables:

Strong Positive Correlation The value of Y clearly increases as the value of X

increases.Strong Negative Correlation The value of Y clearly decreases as the value of X

increases.

Weak Positive Correlation The value of Y increases slightly as the value of X

increases.

Weak Negative Correlation The value of Y decreases slightly as the value of X

increases.Complex Correlation The value of Y seems to be related to the value of X, but

the

relationship is not easily determined.

No Correlation There is no demonstrated connection between the two variables

Q.6 List the benefits of WBS? Need for risk management in an organisation-

comment.

Ans:

Work Breakdown Structure

Work breakdown structure (WBS) is a fundamental component of project

management process that helps in defining and organising the total scope of a

project using hierarchical tree structure. According to Project Management

Body of Knowledge (PMBoK), WBS is a deliverable-oriented hierarchical

decomposition of the work to be executed by the project team to accomplish the

project objectives and create the required deliverables. The hierarchy structure

approach of WBS helps the project team to know the requirements of total

project more accurately and specifically. WBS can also be used to assign

responsibilities and allocate resources to the project. It helps the team tomonitor and control the project.

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WBS is the critical input to various project management processes and

deliverables like activity definitions, project schedule network diagrams, project

and program schedules, performance reports, risk analysis and response, control

tools or project organisation. WBS has several levels in its hierarchy structure.

These can be further used as an input to the scheduling process that supportselaboration of tasks, activities, resources and milestones which can be cost

estimated, monitored, and controlled.

Benefits of WBS

Work breakdown structure represents family tree hierarchy structure of project

operations required to accomplish the objectives of the project. Tasks identified

in the WBS collectively describe the overall project. It serves to describe the

link between the end objective and activities required to reach that objective.

Benefits of Work Breakdown Structure

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ASSIGNMENTS Set 2

Q.1 Describe the various ways of representing network diagram logic.

Ans:

Network Logic Diagrams

The logic development in project planning is an iterative process. Initial logic

development starts after identification of the activities of the project and before

scheduling process occurs. The logic development process is further refined

during schedule development and optimisation. There are two common methods

of logic diagramming which are referred as network logic diagrams. Before

knowing the types of network logic diagrams, we should be familiar with rules

to be followed while developing and analysing it.

Rules to Develop a Network Logic Diagram

Activity Sequencing and Network Techniques

Activity is a definite task to be performed in a project to achieve the goals and

objectives of the project. It is represented by an arrow in the network and the

duration of it is represented by the number of days, weeks or months just above

it. The head of arrow denotes the start and tail denotes the end date of the

activity. Activity consumes resources of men, money, time and any other

resources like materials, software and so on.

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Activity sequencing involves identifying and documenting interactivity logical

relationships. Activities must be sequenced accurately to support later

development of a realistic and achievable schedule. Sequencing activities can be

performed using project management software or by manual techniques.

Manual techniques are beneficial in smaller project and also it is useful duringthe initial stages of huge projects. It is also possible to use both manual and

software together on a project.

Inputs to Activity Sequencing

The list below describes the inputs required for activity sequencing process:

Activity List: All the activities identified in the work breakdown structure of

the project should be listed.

Product Description: This is an important factor in a product development

projects. This input describes the various products involved in the project plan

required to accomplish the project.

Mandatory Dependencies: These are inherent in any nature of work being

done. This input often involves most of the physical limitations. This input of

activity sequencing is also referred as hard logic. For example, a prototype

should be built before it is tested in any electronic project.

Discretionary Dependencies: These are defined by the project management

team. This type of dependencies should be used with care and fully documented

as their effect will limit later scheduling options. This input of the activity

sequence is also called preferred logic or preferential logic or soft logic.

External dependencies: These are the dependencies that involve a

relationship between project activities and non-project activities. For example,

testing activity in a software project depends on delivery of hardware from an

external source.

Milestones: These events are essential for activity sequencing since it assures

that the requirements for meeting the milestones are met.

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Identify all the team members after drawing the structure. Assign each team

member a position in the structure. If there are extra positions that have not

been filled in the structure, fill them now. If there are additional resources left

free, assign those resources so that all resources and positions are accounted for.

Ensure that the OBS is structured from the most responsible department and

followed by the performing departments at the lower levels. The lower levels of

the structure are where the project responsibilities are matched up with the

resource needed.

Specify the functional group to every user where cost for the work the user

does is allocated.

Specify the approval group to every user who approves the work of the user

and any leave approvals.

After developing the WBS and the OBS of the project, both the structures are

merged to create a responsibility assignment matrix which gives the complete

details of accounting tasks and responsibilities. Figure 10.2 shows link between

WBS and OBS.

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Cost Breakdown Structure

Cost of a specific project activity refers to the monetary value or financial

pricing. It includes all anticipated expenditures that are expected to be part of

the entire project, as well as the monetary value of the total sum of resources to

be expended during the process.

Cost estimation and control is vital for success of a project. This is the reason

that Cost Breakdown Structure (CBS) is considered to be a major part of project

breakdown structure. CBS describes how different cost elements contribute to

the total cost of a project. According to Hundal[1], the contributions to the cost

of a product can be estimated in a variety of ways. These breakdowns are

expressed in the forms of cost structures.

A CBS is a document which outlines the criteria and activities that should be

carried out as part of project management. It provides details about the

input/output cost estimates and the amount of money being spent. It provides

the plan and structure necessary to control costs of the project and keep them

within the limits of the project budget.

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In CBS, a specific project cost is broken down into sub costs, which includes

number of unique categories. The identified categories of cost breakdown

structure include direct labour hours, indirect labour hours and other

direct/indirect costs of the project. It also includes the purchased price of any

specific materials and equipment which falls into resource cost category.

In a business, providing a budget that is adjusted to time is referred as a cost

baseline. It is the integral part of the cost breakdown structure. A cost baseline

is an essential facet of the project management plan used by companies to

ensure success of the project. Most larger projects have a variety of cost

baselines which should be calculated. The basic cost baselines of a project are

resources baselines and production variations baselines. These cost baselines

measurement ensure that the cost is evaluated in regards to the overall yield of a

specific project.

CBS defines and arranges all relevant cost elements suitable for a specific

project. It is a framework which shows the estimated cost requirement of the

project divided among different activities of the project identified at work

breakdown.

There are five major forms of cost breakdown structures. They are:

Grouped on the basis of the components that the product is made of and thus

following the bill of materials.

Divided on the basis of organisational departments.

Divided based on the product functionalities which are very beneficial for a

product development purposes.

Divided based on the various activities and operations of the project.

Divided based on any desired way and then the result is arranged using the

Pareto chart rule. This indicates the most important and the least important cost

elements from the desired point of view.

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The cost elements of a CBS are usually associated with the three basic elements.

They are:

Resources

Activities

Product

Q.3 If optimistic time for an activity is 5 days, estimated time to complete the

activity 85 and most likely time 10 days. What is the variance of the activity?

Ans:

Estimated time of the project = (to + 4* tm + tp)

.ie: 85= (5+4*10+tp)

= 85(45+tp)

=tp= 40

So variance = Variance= [(tp - to) / 6]2

= [(40-5)/6]2= 11.6

If three standard deviations are chosen for the optimistic and pessimistic times,

then there will be six standard deviations between them. In this case the

variance of each activity completion time is given by

Project Evaluation and Review Technique

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Project Evaluation and Review Technique (PERT) is a project management tool

that is designed to analyse and represent the tasks involved in project. It

schedules, organises and coordinates tasks within the project. It is used in

conjunction with critical path method. It identifies the time needed to complete

each task and minimum time required to complete entire project.

The main objective of PERT is to facilitate decision making process and to

reduce both the time and cost required to complete a project. PERT is useful in

very large-scale, one-time, non-routine, complex projects with a high degree of

inter-task dependency, projects which require a series of activities, some of

which must be performed sequentially and others that can be performed in

parallel with other activities. PERT planning has following steps:

1. Identifying the specific activities and milestones: Activities are the tasks

that are required to complete a project. The milestones are the events which

marks the beginning and the end of the activities of the project. It is a good

practice in project management to list the tasks in table which can be expanded

in later stage of project to include information on sequence and duration.

2. Determining the proper sequence of the activities: This step of PERT can

be merged with the activity identification step since the activity sequence is

required from some tasks. Other tasks of the project may require more analysis

to determine the exact order in which they must be performed.

3. Constructing a network diagram: Based on the activity sequence

information, network diagram can be drawn which shows the sequence of the

serial and parallel activities. Each activity is represented by a node in the

network and the arrow depicts the relation between activities.

4. Estimating the time required for each activity: Week is the commonly

used unit of time to track the activity completion period. The ability to deal with

uncertainty in activity completion time is the most distinguishing feature of

PERT.

Q.4 Explain the following types of contract:

a. Cost reimbursable and its variation

b. Fixed price and lump sum contract

c. Time & material contract

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Ans:

Cost-reimbursable contracts: Here the seller is paid for his actual costs plus a

fee to cover his profit. The actual cost includes direct cost (salaries of full-time project staff) and indirect cost (salaries of management and support staff

indirectly involved in the project plus cost of office facilities like rent,

electricity etc.). The variations in this category are:

- Cost-Plus-Fee (CPF) or Cost-Plus-Percentage of Cost (CPPC): The payment is

made for the actual cost plus an agreed percentage of the actual cost as fee.

- Cost-Plus-Fixed-Fee (CPFF): This is same as CPPC except that the fee is fixed

and does not increase or decrease with the actual cost unless project scope

changes.

- Cost-Plus-Incentive-Fee (CPIF); Here, in addition to the payment as per the

CPPC or CPFF mode, an incentive is paid upon achieving certain specified

performance levels of the project.

Fixed price or lump sum contracts: Here, the product to be supplied or SOW

to be carried out is very well defined and the seller is paid a fixed price. Time

and Material (T&M) contracts: Here the contract contains the feature of both

cost reimbursable and fixed price contracts. Unit rate contracts are an example,where the unit rates for specific items of work are fixed, but the contractor is

paid for the actual quantities executed, since quantities are not known at the

time of signing the contract with the contractor.

To illustrate project procurement contract examples, we look at large

construction projects, where sharing of the risk between the major stakeholders,

like the buyer (owner) and the seller (contractor) is a very important

consideration. For a more comprehensive understanding of contracting in large

projects, we examine seven types of contracts with varying degrees of risks

assumed by these stakeholders as per a review conducted and presented in an

international publication Procurement strategies A Relationship based

approach by Derek Walker and Keith Hampson. Figure 9.1 shows a

construction cost continuum for project delivery.

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Q.5 Describe the factors to be considered when feasibility of a project is

examined. Also explain the various qualities that a good project management

process encompasses.

Ans:

Quality of a Project Management Process

The various qualities that a good Project Management process should

encompass are as listed below:

Creativity: A good Project Management process should be creative that

facilitates integrating various categories of the project into a unified structure. Itshould provide abilities to create enthusiasm and appeal in the process.

Structure: The structure of the organisation will have a set of specifications,

parameters, limitations as well as certain guidelines that has to be followed. The

members of the organisations are expected to work effectively within the

defined framework and structure of the organisation.

Intuition: Intuition is very important part of maintaining a good Project

Management process. It is that ability of understanding the uncertainties and thethings forth coming without the use of any rational processes. It is the

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foundation of emotional intelligence. It is vital to have a stronger intuition that

enables to sense what the other members are feeling and thinking.

Knowledge: Knowledge is an important part of the Project Management

process. It is required for the deeper understanding of the project with ease andalso to delegate the technical aspects training to the other members participating

in the project team.

Commitment: The commitment of the project manager is responsible for

holding the team together to pull the project to meet its delivery dates

successfully. Commitment ensures that there are fixed allotted timings for every

activity to be performed in the process.

Being Considerate: Being considerate infers that a task allotted to the

members of the team can be well completed in the allotted time. It ensures that

no employee is heavily loaded with unnecessary work he is not responsible for.

Thus, the loyalty and humbleness of the manager will further take the project

team to meet its objectives defined.

Versatility: The primary qualities of a Project Management process include

flexibility to any kind of environment. It requires versatility that enables the

project manager to change any decisions with respect to resources and other

constraints quickly.

Lightness: It complements the importance of the tasks as well as provides

options to resolve them. This leads to strong team results and team maintenance.

Discipline/focus: It is very essential to be self focused and disciplined to

maintain the moralities and ethics of self and the company.

Big picture, small actions: It is very essential for a good Project Management

process to visualise things in a broader perspective. This leads to thinking in a

wider range meanwhile paying attention to the details of the project. However,it requires good communication skills to interact with the team members in

order to establish the clear expectations of the clients. It is required that the

members of the team are also given the authority to make shared decisions

regarding developing the project. It gives a clear picture of the people who are

assigned to the specific tasks. Effective Project Management process adopts

various customs and ways in order to correspond and share the relevant

information such as conducting meetings and informal conversations with the

relevant and concerned people such as with the other members of the team, the

clients and other senior officials of the project. This requires that the manager of

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the project have good communication skills and believe in listening skills than

talking skills.

Benefits of Successful Project Management Process

The project management process deals with how a project is implemented from

start to finish. It offers various benefits to the organisation which includes:

Facilitates monitoring of the scheduled costs.

Ensures that the time to market and time to profitability is reduced to an extent

as required by the organisation.

Monitors resources effectively.

Prioritises the resources and the tasks allocated.

Facilitates a plan to maintain solutions to anticipated problems.

Provides co-ordination for various processes and identifies the various

dependencies of the tasks.

Project Management process ensures that efficient work is produced in a

minimum amount of time. This is possible by effectively planning theobjectives which helps a great deal in saving time and money and coordinating

the resources well.

Project Management process ensures that the defined goals are achieved. It

provides a structure that every member participating in the team has to adhere

to. After completion of every phase of the project, it is important to document

the requirements gathered in the application.Documenting the assigned tasks

may include designing their documents, noting the installation steps, providing

information of the hardware, grid location of the hardware, providing variousversions of software used. The documentation also facilitates in maintaining

information of how to support the application and how to keep the application

secure by performing various proactive monitoring. Various updates and

patches are also documented to keep the working environment more stable.

Back up and retention policies are also documented that ensures that, in case of

system crashes or any uncertainties, the data is available for recovery.

The major benefits that an organisation can derive from the effective project

Management Process are:

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Efficiency in delivery services: The effective project management process

ensures that it provides various ways that can be followed by all the members

participating in the team. It provides efficient delivery of the deliverables by

eliminating most of the uncertainties in the project.

Enhanced customer satisfaction: Effective management and delivery of the

project ensures the clients are satisfied. It requires that the delivery of the

project is made on the scheduled time and under the budget as fixed by the

company both internally and externally by the clients. It facilitates the enhanced

effectiveness in delivering the expected services by adopting various

management strategies for implementing the project.

Improved growth and development: It ensures that it motivates the members

of the team to progress in work which facilitate both personal and professional

growth.

Flexibility: It enables a project to be flexible to various kinds of environment

and situations. It holds good to various kinds and sizes of organisation such as

small size organisation, mid sized and large organisation.

Increased risk assessment: A good Project Management regularly monitors

the status of the work. Controlling and reviewing is a major activity of a project

management process. This ensures that the risks associated with the project are

analysed and solved.

Q.6 Describe the following project management approaches:

a. Critical chain project management approach

b. . Event chain methodology approach

c. Incremental approach

d. Phased approach

Ans:

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Critical Path Method (CPM):

The Critical Path Method (CPM) is a schedule network analysis technique.

CPM was developed by the DuPont Corporation in 1957.Critical path

determines the shortest time to complete the project and it is the longest

duration path through a network of tasks. Critical tasks (activities) are tasks(activities) on the critical path.

To understand CPM further let's first understand nature of the task. According

to PMBOK every scheduled task can be defined by the following four

parameters.

Early Start (ES): Earliest possible point in time on which a task can start.

Early Finish (EF): Earliest possible point in time on which a task can

finish.

Late Start (ES): Latest possible point in time on which a task can start.

Late Finish (EF): Latest possible point in time on which a task can finish.

Early Start and finish dates are calculated by means of Forward Pass and Late

Start and Late Finish dates are calculated by means of Backward Pass.

Many Tasks have some amount of buffer added to them referred as Slack Time

or Float. Float time is amount of time a task can slip before it delays project

schedule. There are two common types of floats.

Free Float: Amount of time a single task can be delayed without delaying

the early start of any successor task.

Total Float: Amount of time a single task can be delayed without delaying

project completion.

Mathematically Float is defined as: Float = LS - ES or LF - EF.

Critical path has zero or negative Total Float. A project can have several critical

paths.

Principles of Event Chain Methodology

Event Chain Methodology is based on six main principles:

Principle 1:

Moment of Risk and State of Activity: In a real life project process, a task or

an activity is not always a continuous procedure. Neither is it a uniform one. A

factor that influences tasks is external events, which in turn transform tasks or

activities from one position to another.

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During the course of a project, the time or moment when an event occurs is a

very important component of the event. This time or moment is predominantly

probabilistic and can be characterized using statistical distribution. More often

than not these external events have a negative impact on the project.

Principle 2:

Event Chains: An external event can lead to another event and so forth. This

creates event chains. Event chains have a significant impact of the course of a

project.

For example, any changed requirements to the materials needed for the project

can cause the activity to be delayed. The project manager then allocates

resources from another activity. This leads to missed deadlines and eventually

leads to the failure of the project.

Principle 3:

Monte Carlo Simulations: On the clear definition of events and event chains,

Monte Carlo Analysis is utilized in order to quantify the collective

consequences of the events.

The probability of the risks occurring and the effects they may have are used as

input data for the Monte Carlo Analysis. This analysis gives a probability curveof the project schedule.

Principle 4:

Critical Event Chains: Critical events or critical chains of events are those

with the potential to impinge on a project the most. By identifying such events

at the very beginning, it is possible to lessen the negative effect they have on

projects.

These types of events can be detected by examining the connections betweenthe primary project parameters.

Principle 5:

Performance Tracking With Event Chains: It is important for a manger to

track the progress of an activity, live. This ensures that updated information is

used for the Monte Carlo Analysis.

Hence during the duration of the project, the probability of events can be

calculated more accurately using actual data.

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Principle 6:

Event Chain Diagrams: Event Chain Diagrams depict the relationships

between external events and tasks and how the two affect each other. These

chains are represented by arrows that are associated with a particular activity ortime interval on a Gantt chart.

Each event and event chain is represented by a different color. Global events

affect all the tasks in a project while local events affect just one task or activity

in a project. Event Chain Diagrams allow for the simple modeling and analysis

of risks.

The Incremental Approach

We believe that an incremental approach offers the best way to reduce the

destructiveness of confrontations over intractable issues. This approach begins

by helping parties (both adversaries and intermediaries) identify conflict

problems which increase the conflict's overall destructiveness or threaten the

parties' ability to make wise decisions or advance their interests. We then

provide parties with information about options for dealing with each problem

and their advantages and disadvantages. While it is usually impossible to correct

all such problems, our goal is to help people fix as many of the problems aspossible, and reduce the magnitude of problems that cannot be eliminated .

Although many of our "treatments" require the cooperative efforts of

contending parties (often with the assistance of intermediaries), others can be

implemented unilaterally. Similarly, some treatments are relatively easy to

implement, while others require that the parties develop new dispute-handling

skills or secure the assistance of outside professionals. Unlike other forms of

dispute resolution, this incremental approach can work in situations where

resolution-based approaches are unworkable. It also makes sense in cases where

it is unrealistic to expect major changes in dispute-handling process or decision-

making institutions.

Accumulating Knowledge Base

While there are no proven and reliable strategies for resolving intractable

conflicts, the field's accumulating knowledge base does offer a rich array of

ideas for making inevitable confrontations far more constructive. Some of these

ideas have a long history as essential elements of every dispute resolution

practitioner's toolbox. Also of great value are many of the dispute handlingtechniques used by the many more traditional conflict professionals (e.g.

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represents the need for a real plan and serves as an introduction to those

individuals who have not worked within a formal project process in the past.

Documents

PM0010- Introduction to Project Management- Cover Page