Master of Business Administration - MBA Semester 2

MB0049 Project Management

(Book ID:B1632 )
ASSIGNMENT- Set I
Q1. Describe the CPM model. Briefly explain.
Answer -The critical path method (CPM) is a step-by-step technique for process planning that defines critical and
non-critical tasks with the goal of preventing time-frame problems and process bottlenecks. The CPM is ideally
suited to projects consisting of numerous activities that interact in a complex manner. For projects considered
uncertain, the PERT model was developed and for projects which are comparatively risk-free the CPM model was
developed. Both the approaches start with the development of the network and a focal point on the critical path. The
PERT approach is 'probabilistic' while the CPM approach is 'deterministic'. This does not, however, mean that in
CPM analysis we work with single time estimates. Actually the main focus of CPM analysis is on variations in
activity times as a consequence of changes in resource assignments. These variations are planned plus related to
resource assignments as well as are not caused by random factors outside the control of management as in the case
of PERT analysis. The major focus of CPM analysis is on time cost relationships and it seeks a project schedule that
minimises total cost.
In applying the CPM, there are several steps that can be summarized as follows:

Define the required tasks and put them down in an ordered (sequenced) list.

Create a flowchart or other diagram showing each task in relation to the others.

Identify the critical and non-critical relationships (paths) among tasks.

Determine the expected completion or execution time for each task.

Locate or devise alternatives (backups) for the most critical paths.

The CPM was developed in the 1950s by DuPont, and was first used in missile-defense construction projects. Since
that time, the CPM has been adapted to other fields including hardware and software product research and
development. Various computer programs are available to help project managers use the CPM.
Features of CPM
1. CPM is activity oriented i.e., CPM network is built on the basis of activities.
2. CPM is a deterministic model. It does not take into account in uncertainties involved in the estimation of time.
3. CPM places dual emphasis on project time as well as cost and finds the trade off between project time and project
cost.
4. CPM is primarily used for projects which are repetitive in nature and comparatively small in size.
Q2. Define risk management. What the different types are of risks that can affect a project?
Answer- Risk Management is a field of management that deals with the possibility that various future events may
cause harm or threat to the organisation. Risk Management comprises of strategies and techniques to recognise and
confront any threat faced by a business in fulfilling its mission. Risk is inevitable in a business organization when
undertaking projects. However, the project manager needs to ensure that risks are kept to a minimal.
Types of risks
Macro risk levels A chance of a loss or injury is called risk. It has two components the systematic risk and
unsystematic risk. Risks that are caused by factors external to the particular organisation and cannot be controlled

by the company are termed as systematic risks. Such a risk affects the market as a whole. On the other hand, in case
of unsystematic risk the factors are unique, specific and related to the particular industry or organisation.
Systematic risk: A systematic risk cannot be controlled or foreseen in any manner, therefore it is almost
impossible to predict or protect the organisation or a project against this type of risk. Such a risk affects the
entire market.
Unsystematic risk: Unsystematic risk is sometimes referred to as "specific risk". It is unique and peculiar to
a firm or an industry and can usually be eliminated through a process called diversification. Unsystematic
risk stems from managerial inefficiency, technological change in the production process, availability of raw
material, changes in the consumer preference, and labour problems.
Business risk: It is that portion of unsystematic risk caused by the operating environment of the business
which arises from the inability of a firm to maintain its competitive edge and the growth or stability of
earnings.
Financial risk: It refers to the variability of the income to the equity capital due to the debt capital. Financial
risk in a company is associated with the capital structure of the company. Capital structure of the company
consists of equity funds and borrowed funds.
Micro risk levels The types of risks discussed above were the macro scale levels of risk, but in addition to these,
there are some more significant micro (small-scale) types of risks that are vital when talking about a business.
Project risk: Project risk relates to the uncertain events or situations that have the potential to adversely
affect a planned project, usually in terms of cost, schedule, and/or product quality. Project risk is a function
of two components: likelihood and consequence.
Country risk: Country risk, also referred to as political risk, is an important risk for investors today. With
more investors investing internationally, both directly and indirectly, the political and economic stability
and viability of a country's economy needs to be considered.
Q3. Briefly discuss the steps to close the project
Answer: Project Close-out is the final stage of the project life-cycle and it is mostly ignored by large organisations,
in particular when they operate in multi-project environments. They learn to switch from one project to another and
complete the finishing of each project as time and resources are costly. Subsequently projects keep deteriorating and
organisations take no counteractive actions, simply for the reason that they do not have the time to consider what
went wrong and what should be fixed next time. A lesson that is learned can be discussed at project reviews as part
of the closeout phase. Moreover closure also deals with the final details of the project and presents a normal ending
for all procedures, which includes the delivery of the final product.
The project closeout and termination phase can be thought of as a project unto itself. Often termed commissioning,
this phase must be planned and programmed, tasks must be assigned, the phase must be executed effectively and its
costs, schedule and quality must be controlled. On large projects, a specialist team is often engaged to assure that
project closeout is carried out in the best manner possible. We have chosen to divide the tasks into two categories:
(1) Completing the work, this includes the physical activities that must be accomplished on the site
(2) Closing out the project, involving the multitude of required documents and other paper work issues, some
related obviously to finances but others to certificates, project records and provision to the owner of the required
training, operational information, spare parts and the like. The two categories overlap and interact. The presentation
in each category is generally in the order in which the activities occur on the project, although many activities take
place concurrently.
Most frequently project managers identify when to finish a project but they overlook how to do it. They are so
willing to complete a project that they hardly miss the completion indicators. "Ideally, the project ends when the
project objective has been attained and is ready to hand over to customer". At the boom and bubbles period, senior
management can instruct the immediate termination of costly projects. A quality example of that is Bangkok's over
investment in construction of sky-scrapers, where most of them left abandoned without finalising the last floors

because of enormous costs. Those projects that are greatly attached to time can be terminated earlier than normal
finishing point if they miss a critical deadline, such as an invitation to tender.
Q-4Discuss the various steps of PMIS planning
Answer: The success of a PMIS depends on its effective planning. The PMIS is used for many purposes by a
project manager like budget estimation of costs, creating a schedule, define the scope, etc. Hence, these should be
considered while planning for PMIS. The planning of PMIS includes the following steps:
1. Identify the information needed
2. Capture data
3. Process data into information and store it
4. Communicate information to stakeholders
Identify the information needed: Identification of the information that is needed is necessary for improving the
decision making and the structure of the PMIS. Information requirements of project stakeholders include the
recipients of information, the type of information that is needed, which includes format, contents, and level of
details, the time the information is required and how (by what media) will it be communicated to them.
(i)
Who needs information?
(ii)
What type of information is needed?
a) Selection phase
b) Planning phase
c) Execution and control phase
(iii)
When information is needed?
Capture data: Term Capture data is used to state a process of preparing and collecting data i.e., as element of a
process improvement or similar project. The function of data collection is to attain information to maintain record,
to make decisions for vital issues, and to pass information on to others. Data can come from actual observation or
from records. Data collected from records is known as secondary data. Data collected from direct observation is
known as primary data. It should be ensured that all relevant groups are represented in the data. A formal data
collection process is essential as it makes certain that the gathered data are both defined and precise and that
subsequent decisions based on opinion embodied in the findings are valid. Data possibly is arranged in tabular form,
data array or frequency distribution.
Process data into information An organisation, to achieve its aims, needs to process the data collected into
meaningful information. It should be presented in its most useful formats. Data must be processed in a context to
give it meaning. Data is transformed into information using mathematical, statistical, or other tools including
computer software. Information can be stored in electronic form or hard copies represented in the most useful form.
Communicate information to stakeholders Communication is the process by which information is exchanged
between individuals through a common system of symbols, signs, or behaviour.
Q5. What are the important approaches to project control?
Answer: Project planning is an essential part of project management. Successful completion of a project is heavily
dependent on effective planning. A project plan allows you to complete a project within a specified timeline and a
specified budget. Project planning is fundamental in order to avoid failure and disappointment. In project

management, effective planning is absolutely required if the individual or group wishes to deliver a finished project
on time and on budget.
A project schedule will provide all involved with an outline and detailed activities to minimize risk to the final
result and delivery. The basics you will get from the schedule include how long the project or any single stage
within it will take. Every successful project delivers your future organization and helps it to accomplish its strategic
goals. If organizations must flourish and keep up with competitive, its members must be effective at
project management. Appropriate, careful planning will ensure that projects will not overrun deadlines and/or pile
on unexpected costs. Such a situation would only endanger the anticipated corporate benefits of the organization.
The project schedule is the framework on which the actual resource plans and cost breakdowns are mapped. It
makes explicit each stage and activity, which combine to form the entire project. This greater visibility encourages
accurate real time status reports and analyses from multiple perspectives. So the ability to build and manage a
project schedule is a top priority if one needs to succeed at ones project.
Another immense benefit to planning is that in case a problem arises, it functions as an alarm mechanism. At such a
point risk management and going through contingencies for various scenarios can occur in order to restrict the
damage or compromise resulting from the problem. One final word of advice, though: a good plan is also a flexible
one, so dont be too preoccupied with maintaining its rigid form all through the duration of the project.
Planning is the process of analyzing the situation, determining the goals/ objectives that will be pursued in the
future, and deciding in advance the actions that will be taken to achieve
the goals.
The following are the steps involved in PLANNING PROCESS
1. Reviewing current operation situation.
2. Conducting the current operation strengths/ weaknesses.
3. Studying the External environmental factors affecting the operation.
4. Studying the expectations of the operations.
5. Determine the opportunities for improvements/growth and negatives constraints.
6. Based on the above analyses, determine the goals and objectives for the operation for the future period.
7. Based on the objectives, determine your strategy how you are going to achieve the objectives.
8. Based on the strategy, determine the action plans that have to be implemented.
9. Your action plan will determine the resources required manpower, finance and materials
10. Finally a system to monitor the plan/its progress.
Q6. Describe the project planning process and explain it in detail.
Answer: Project planning involves three processes.
The identification process: The main steps in the identification process of any project are:
Identifying initial requirements. For example, when a company identifies a need for a new or
improved product due to R & D results or a consumer survey, the management of that company
will acknowledge the necessity of improving the existing product in accordance with the
consumers demands.
Validating them against the project objective.
Identifying the criteria such as quality objectives and quantitative requirements for assessing
the success of both the final product and the process used to create it.
Identifying the framework of the solution.
Preparing a template of the framework of solution to illustrate the project feasibility.

 Preparing relevant charts to demonstrate the techniques of executing the project and its different
stages.
Preparing a proper project schema of achieving the defined business requirements for the
project.
Identifying training requirement.
Making a list of the training programme necessary for the personnel working on the project.
Identifying the training needs of the individuals working in various functions responsible in the
project.
Preparing a training plan and a training calendar.
Assessing the capabilities and skills of all those identified as part of the project organisation.
The review process: The main steps in the review process of any project are:
Instituting a training plan to explain the project team members with the methodologies,
technologies and business areas under study.
Updating the project schedule to accommodate scheduled training activities
Identifying the needs for review and reviewing the project scope
Re-evaluating a project with respect to its stages and progress by organising a plan for the
review, fixing an agenda to review the project progress and maintaining the reports ready for
discussion about stage performance
Reviewing the project scope, the objective statement, and the non- conformances in the project
stages and identifying the need to use the project plan
Preparing a proper project plan indicating all the requirements from start to finish of the project
and also at every stage of the project
Preparing a checklist of items to be monitored and controlled during the course of execution of
the project
The analysis process: The main steps in the analysis process of any project are:
Comparing the actual details with that in the plan with reference to project stages
Measuring various components of the project and its stages frequently to control the project
from deviating and also monitor the performance
Deciding how the task, the effort, and the defects are to be tracked; what tools to be used; and
what reporting structure and frequency will be followed at various stages
Identifying the preventive and corrective steps to be taken in case of any variance
Performing root cause analysis for all problems encountered