Project Management Assignmnet Q & A
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Q.1 Discuss the duties and responsibilities of a Project Manager. How critical is a Project Manager to the success of a project?
Ans. The project manager's responsibilities as well as his/her critical nature of work for success of a project are broadly fall in the following three categories:-
i) Responsibility to the project
The project manager's responsibility to the project involves meeting conflicting demands made be parties who have interest in the project, while maintaining overall integrity of the project. For example, the project manager may have to deal with the manufacturing department to overcome resistance to a change in the order from a client. The marketing department may be suggesting the change to be carried out while the manufacturing or engineering departments may argue that the change would necessitate a complete re-design. Similarly, the administration department may also have its objections. It is the project manager's responsibility to tactfully handle such conflicting situations and at the same time preserve integrity of the project.
ii) Responsibility to the parent organization
The project manager's responsibility to the parent organization includes keeping the senior management fully informed about the project. The project manager should also warn the senior management of parent organization of likely future problems. For example, if the project is likely to be delayed or run out of budget, the project manager should not only warn the management about this but also suggest methods to minimize the chances of such problems.
iii) Responsibility to members of the project team
Most commonly the staff working for a project is not directly subordinate to the project manager. Inspite of this, the members of the project team have to work very closely with the project manager who has the responsibility of making the project happen through these members. Since a project is of temporary nature, it has to come to an end after certain period of time, therefore, the project manager's responsibility to the members of the project team also involves looking after their career path or helping them with the transition back to their normal duties or to a new project; otherwise the project workers may lose interest in the project towards its end and may be paying more attention to protect their personal career.
Q.2 Discuss how the following project selection models are used in real world applications.
a) Capital investment with discounted cash flow.
b) Goal programming models.
c) Simulation models.
Ans. Project selection is the process of evaluating individual projects and then choosing one or more of them so that objectives of the parent organization are met. There are basically two types of project selection models, i.e. numeric models and non-numeric models.
a) Capital investment with discounted cash flow
This project selection model is a numeric model. This method determines the net present value of all the cash flows by discounting them by the required rate of return. The formula for calculating the net present value of the project is as given below:-
b) Goal programming models.
The goal programming model also appears in the category of numeric models but it is more general in the sense that it is based on multiple criteria. Instead of a single decision criteria, more than one goals can be stated in this model. This model is a variation of the linear programming model, in which we first establish a set of goals to be achieved, such as "maximize profits", or "maximum equipment utilization" etc. Then we gather a set of constraints under which the goals must be achieved. Finally, linear programming techniques such as the simplex method are applied to determine if the goals can be achieved under given constraints.
c) Simulation models
Simulation models are used in situations of high uncertainty. Sometimes it is impossible to predict the outcome of a project because little information is available. For example, a research and development (R&D) project aimed at developing a new product may have an immense amount of uncertainty about how long will it take to develop the new product, and what will be the cost. In such situations, the usual numeric methods cannot be applied.
Q.3 Explain as to how should the following projects be organized?
Ans. Organization is the process of people working with each other toward their common goals. Organization is a logical process that helps to turn an idea or plan into an accomplished reality. It provides a framework for action so that employees know what is expected of them, how they are to proceed, and where to turn for guidance when problems come up. When projects are initiated two issues immediately arise. First a decision must be made about how to tie the project to the parent firm. Second, a decision must be made about how to organize the project itself.
A bank's investment banking department.
In my view in the organization of this project “a bank's investment banking department”, it will be easy to organize it in a form of “Functional Organization” because this project is basically a part of one of the functional organization. In this form the project is placed under the general supervision of one of the senior executives and the task of specific supervision is assigned to the head of that unit which is going to be established. The other work is assigned to the other members of this unit. As is done in the functionally organized projects, the project is assigned to the functional unit that has the most interest in ensuring its success or can be most helpful in implementing it. By using this form we have certain advantages which are as under:
• There is maximum flexibility in the use of existing staff of the bank. Experts can be temporarily assigned to the project, make the required contributions, and immediately be reassigned to their normal work.
• Specialists in the bank can be grouped to share knowledge and experience.
• The other functional department also serves as a base of technological continuity.
• Finally, the other functional departments contain the normal path of advancement for individuals whose expertise is in the investment banking area.
A firm's basic research laboratory.
For this project we can use the “Project Organization” because this project is being established as a separate entity from the rest of the parent system. It becomes a self-contained unit with its own technical, it own administration, tied to the parent firm by the tenuous strands of periodic progress reports and oversight. In this case some parent organizations prescribe administrative, financial, personnel, and control procedures in detail. Others allow the project almost total freedom within the limits of final accountability. In this case we can also use the form of “Project Matrix” in which a person is assigned to oversee the project and interacts on an equal basis with functional managers. This person and the functional managers jointly direct work flow segments. There are certain advantages in these forms such as:
• The project manager has full line authority over the project.
• All other members of the project work force are directly responsible to the Programme Manager.
• On the completion of the project, the lines of communication are shortened.
• Motivation is high and acts to foster the task.
• Unity of command exists.
• Structurally simple and flexible.
Q.4 What trade offs might exist among the three objectives of system integration? Elaborate.
Ans. Systems integration is the process of integrating the technical disciplines of a project to achieve the goals. The three major objectives of systems integration are as below:-
i) Maximizing performance:-
This includes system design, reliability, quality, and maintainability. A good system must meet the parameters specified by the client. Some system performance characteristics are subject to underdesign or overdesign but must fall within the parameters approved by the client.
ii) Maximizing effectiveness:-
Effectiveness means to achieve the desired performance level in an optimal manner. Usually clients specify tolerances to far closer limits than any possible system requirement, and superfluous components in the system, which makes it difficult for the designer to design an effective system. The clients' desire to overspecify the system usually stems from an inherent distrust and is taken for granted by both buyer and seller.
iii) Minimizing the cost:-
Cost is considered to be a design parameter in systems integration. Adding design cost usually yields reduced production costs. Value analysis is a technique used to examine all the cost trade-offs in systems integration. It is simply the consistent and thorough use of cost effectiveness analysis.
Systems integration usually plays an important role in success or failure of a project. For example, a risky approach might delay the project while a conservative approach may forego opportunities for enhanced project capabilities or reduced costs. A good design should take in account all these trade-offs in initial stages of technical approach. A good design should also avoid locking the project into a rigid solution in which changes are difficult to incorporate in case of problems arising at later stages.
Q.5 Why is learning curve analysis important to project management? Explain.
Ans. The learning curve analysis is very important to project management because for any task where labour is a significant cost factor and the production run is reasonably short, the Project Manager takes the learning curve into account when estimating costs. The learning curve is based on the observation that the amount of time required to produce one unit decreases a constant percentage every time the cumulative output doubles.
If the project being costed is one of many similar projects, the estimation of each cost element is fairly routine. If the project involves work in which the firm has little experience, cost estimation is more difficult, particularly for direct labour costs. For example, consider a project that requires 25 units of a complex electronic device to be assembled. The firm is experienced in building electronic equipment but has never before made this specific device, which differs significantly from the items it routinely assembles. Experience might indicate that if the firm where to build many such devices, it would use about seventy hours of direct labour per unit. If labour is paid a wage of Rs. 12 per honour, and if benefits equal 28 percent of the wage rate, the estimated labour cost for the 25 units is
(1.28)(Rs.12/hr.)(25 units) (70 hours/unit) = Rs.26,880
In fact, this would be an underestimate of the actual labour cost because more time pr unit output is used early in the production process. Studies have shown that human performance usually improves when a task is repeated. In general, performance improves by a fixed percent each time production doubles. More specifically, each time the output doubles, the worker hours per unit decrease to a fixed percentage of their previous value. That percentage is called the learning rate. If an individual requires 10 minutes to accomplish a certain task the first time it is attempted and only 8 minutes the second time, that person is said to have an 80 percent learning rate. If output is doubled against from two to four, we would expect the fourth item to be produced in
8(.8) = 6.4 minutes
Similarly, the eighth unit of output should require
6.4 (.8) = 5.12 minutes
and so on. The time required to produce a unit of output follows a well known formula:
Tn = T1 nr
Where
Tn = the time required for the nth unit of output.
T1 = the time required for the initial unit of output.
n = the number of units to be produced, and
r = log decimal learning rate/log 2.
The total time required for all units of a production run of size N is
In the example of the electronic device just given, assume that after producing the twentieth unit, there is no significant further improvement. Further assume that previous study established that the usual learning rate for assemblers in this plant is about 85 percent. We can estimate the time required for the first unit by letting Tn = 70 hours by the unit n=20. Then
r = long .85/log 2
= -.1626/.693
= -.235
and
70 = T1 (20)r
T1 = 141.3 hours
After knowing the time for the initial unit, using a table that shows the total time multiplier, we can find the appropriate total time multiplier for this example - the multiplier for 20 units given a learning rate of 85 percent. With this multiplier, 12.40, we can calculate the total time required to build all 20 units. it is:
(12.40) (141.3 hrs) = 1752.12 hrs
The last 5 units are produced in the steady-state time of seventy hours each. Thus the total assembly time is
1752.12 + 5(70 hrs.) = 2102.12 hours
We can now refigure the direct labour cost
2102.12 (Rs.12)(1.28) = Rs. 32,288.56
Our first estimate, which ignored learning effects, understated the cost by
Rs. 32,288.56 - Rs. 26,880 = Rs. 5,408.56
or about 17%
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