Project3

Situation:

You work for an automobile industry. The organization has initiated a project to upgrade the cars. The
sponsor has appointed you as the Project Manager. For this project, one of the requirements is to have
special electronic auto parts. Your organization has the capability to produce these auto parts. However,
during the planning phase some stakeholders suggest that the production of the auto parts can be
outsourced. But you feel that there is a risk associated with it. Hence you decide to use the decision
tree tool to figure out whether it is worth outsourcing or doing it yourself. After brainstorming along
with the team, you identify the following values and the risk associated.

Decision Outcome
Probability 70%
Gain is
In-house investment is $100 Impact $120K
Probability 30%
Impact Loss is $30K
Probability 50%
Gain is
Outsourcing investment is $40K Impact $100K
Probability 50%
Impact Loss is $10K

A. Use the Decision Tree tool and decide which option is better? Producing in-house or
outsourcing15 Minutes

Irrespective of the Decision Tree outcome, you decide to outsource the electronic parts production. For
this you need to Plan the procurement. With this process you can come up with a subsidiary plan. Many
sellers in the market can produce these electronic parts. You need to evaluate and select a seller. To
make this happen, you decide to develop Source Selection Criteria.

B. Develop the relevant subsidiary plan and also the possible source election criteria list.30
Minutes

C. After the planning is done, you select the seller and give the contract. This process can be
termed as an agreement. Develop a sample agreement which have these key elements.20
minutes
As part of the control procurement process, you get the work performance data and report from the
seller. The data says that 40% of work is completed whereas the seller is supposed to complete 50%
of the work. It calls for a change request to bring the project on track.

D. Briefly explain work performance data, work performance information, and work performance
report. Develop a possible work performance data and work performance report documents for
this scenario. Also explain the techniques which are used in this process to address the
change.15 minutes

E. Once the procurement related activities are done, you use the close procurement process. List
the techniques used under close procurements and write down a few lines about these
techniques.30 Minutes

Total duration is 110 Minutes