V2

Question Paper for the Mid-Term, MBA-V Trimester, Batch- 2018-20

Project Management Concept and Application
Section A
Answer any 5 Questions
(5x8=40 Marks)
Note : Use Templates and list out Assumptions made wherever required

1. Company AI Automation was aware that their production and supply of widgets will not
be able to meet customer demand. They have seen widget demand increase by 10% year on year
for the last 5 years there has been no respite to the increase in demand. The CEO constituted an
internal team had asked the team to prepare a scope document to review current manufacturing
processes and recommend changes to the processes, with upgrades to equipment to meet
comfortably the demand for the future. The CEO also chose to engage a project management
consulting company, PM Solutions (PMS), to work along with the team on the scope of the project

As a Project Management Consultant of PMS, prepare the detailed project scope document
consisting of various parameters that are important. As a consultant what would be your project
management plan for process improvement?

Answer
The objective of this question to understand the project scope management.
The project plan included the discovery and identification of needs for increased production, as
well as identification of affected departments and/or processes if the increase in production were
carried out. The important bullet points of answer are discussed below:
Project scope:
The background of the project is to analyse the manufacturing process and identify the scope of
improvement to increase the current production rate for maintaining the increasing future demand.
The major objectives of the project are as follows-
 To review the existing manufacturing process including purchasing, manufacturing
process, warehouse facility, distributions and capacity analysis.
 To recommend process change to mitigate the increasing demand.
 To analyse the change or upgrades on purchasing, equipment, manufacturing system, and
warehousing facilities.

Parameters for a Project Scope document that a student should mention ( a minimum of 5 pointers)
2. As a Project Manager of DLF Construction, you are engaged in construction of 500 flats
for your upcoming first project at Bangalore. The project has been launched 18 months back.
You have promised on time delivery of flats as per the specification and people have booked
flats for your reputation all over India. Since it is your first project in Bangalore, there are delays
up to 1 year due to land acquisition and obtaining No objection certificate (NOC) from the
authorities to start your project. Suitable contractors are also not available. As a Project Manager
what would be the steps you would take to meet your customer commitment.
Explain through Iron Triangle / Triple Constraints what are the various trade-offs you may
consider ensuring timely project delivery. Justify with realistic assumptions. Elaborate on how
you would work towards mapping the possible risks , project acceptance criteria and define the
critical success factors,

Answer :
Students could formulate a Risk Matrix / give analysis of 3 possible risks , an example of 1 or 2
acceptance criteria and define 2 critical success factors minimum
Support points
Project deliverables
  Manufacturing change management plan.
 Upgraded Process Management plan.
 Risk analysis of upgraded process management plan on other operational decisions.

Assumptions and project constraints.

 It is assumed that the process analysis is based on simple manufacturing process consisting
suppliers, manufacturing and distribution.
 It is assumed that the existing manufacturing process does not have the capacity to fulfil
the existing demand.
 It is also assumed that you can recommend change on equipment, process, and any other
systems.

Identify the triple constraints for the project

The triple constraints of the project are time, cost, and scope. The constraints related to scope are
to equipment, supplier capacity, warehouse capacity etc. The constraints related to time are to how
much time is required to adapt the change by the existing manufacturing process. It is also
important to analyse the capital investment required to change in the equipment or process.
3. Over the last few months, the Operations department of an auto ecommerce portal
Ninjacart discovered that it takes four times longer than their competitor to place an order in their
online ordering system. The department wants to develop new management information system to
improve the current condition. Mr. Das will be the Project Manager and responsible for the project
team selection, final budget and schedules. It is expected that the current project will increase the
sales revenue by $2,00,000 in near years through better customer service. Key departments
involved in this project are quality, customer service and marketing. The company does not want
to invest in the new hardware and the project to be completed within 3 months from the initiation
of the project. The quality department must approve the project before initiation.
Prepare a detailed Project Charter with feasibility study for this project that you need to submit to
the CEO.

Answer : This objective of this question is to the analysis of the project charter.
Project Charter Format and Form is advisable and must fetch more marks
Some possible points
Project Charter:
Background:
 Longer ordering time in the online ordering system.
 Competitions are doing well in terms of customer ordering system.
 Existing information system took 10 times more time than competitors for online ordering.

Scope:
Objective: To develop new information system that reduces the customer ordering time.
Business Case: It is expected that the current project will increase the sales revenue by $2,00,000
in near years through better customer service.
Deliverables:
 Customer service department assess the customer requirement
 Product development department develop new information system.
 Quality department asses the performance of the new information system.

Constraints:
 Company does not want to invest in the new hardware.
  The project should be completed within 3 months from the initiation of the project.

Stakeholders:
 Quality department,
 Customer service Department
 Marketing Department
 Project Management Office
 Operations Department
 Customers
 Competitors

Assumption:
 It is assumed that better service will increase revenue.
 It is assumed that reduction in ordering time will improve customer service.

Milestones:
 Customer need identification
 Analysing existing information system
 Identifying the change requirement
 Development of new information system
 Implementing new information system
 Assessing the performance of the new Information System

Approval:
The quality department must approve the project before initiation.

4. There is a Alumni Mega Event that is being planned for your University where you need
to contact the Alumni across various geographies, conduct a Re-Union Event and also create a
database of the old alumni for placement opportunities of the students. As a Project Manager for
the event, prepare a comprehensive work break down structure (WBS) from initiation to closure
up to 4 levels identifying deliverables, sub-deliverables, work packages and activities. List down
various assumptions made for preparing the WBS.
Answer
Students are encouraged to be innvovative in the activity mapping
5. For a project initiated to create new training course, for any topic, the WBS consist of major
deliverables Training Materials, Resources, Advertising, Logistics, Training Administration. In
addition, Training Materials consist of work books and contents, Logistics consist of Location
rooms, parking, computer equipment, presentation media, Resources includes Instructors, Subject
matter experts, course developer, Advertising includes Marketing collateral, Advertising plan,
Advertising media, and Training admin management requires schedule, staffing support,
Registration. Similarly, Content requires presentation material and hand out, and computer
equipment requires laptop, server, network, printers. As a Project manager, prepare a
comprehensive Project work breakdown structure (WBS) up to 4 levels identifying deliverables,
sub-deliverables, work packages and activities. List down various assumptions made for preparing
the WBS.
Answer

The objective of this question is to analyse how to formulate a work breakdown structure. The
WBS is as follows
1.0 Training Materials
1.1 work books
1.2 contents
1.2.1 Presentation material
1.2.2 Hand out
2.0 Resources
2.1 Instructors
2.2 Subject matter experts
2.3 Course developer
3.0 Advertising
3.1 Marketing collateral
3.2 Advertising plan
3.3 Advertising media
4.0 Logistics
4.1 Location rooms
4.2 Parking,
4.3 Computer equipment
 4.3.1 Laptop
4.3.2 Server
4.3.3 Network
4.3.4 Printers
4.4 Presentation media
5.0 Training Administration
5.1 Schedule
5.2 Staffing support
5.3 Registration

Special Note: Student can also represent WBS in a tree Structure

6. Discuss possible methods of time and cost estimation with respect to a Project
Management Activity that you have taken up for the new Waste Management Project that you
are launching across 5 districts as a part of your State Government Initiative. Elaborate the
Project Life cycle planning for this project and what are the constraints. Use diagrammatic
methods to explain to your project team on the above, wherever required. What are the various
Reserves that you have planned and on what basis.

Answer
The organizational philosophy will dictate how top management conduct their business.
However in the current project situation the project manager has to take charge of what has been
assigned to him/her and make the best decision to create a win/win situation and project success.
Using the change management process will be best suited to adjust unrealistic expectations in
scope, cost and time without pointing fingers or creating hostility.
There are multiple estimating techniques available for project team. Some of the estimating
techniques available are:
 Parametric estimates
 Analogous estimates
 3-point estimate
 Macro (Top Down) Approach
o Consensus Method - Pooled Experience – Delphi Method
o Ratio Method (Thumb Rule Method)
o Apportion Method – Based on past project experience
o Function Points Method ( for S/W projects)
o Learning Curves (experience curve)
 Micro (Bottom up) Approach
o Hybrid – Phase Estimating
o Range Estimating
o Ratio Estimating Method

For effective project control and accurate estimating to gain detailed cost, time and resource
estimates a Micro (Bottom up) Approach is recommended. In this estimation model the front-line
workers or those involved in completing the different tasks are involved and hence a more accurate
estimate is derived.

7.

1. Question:
As a Project Manager evaluate the data given below.

(A) Refer to the table below. What is the cumulative budgeted cost at the end of week 8
and 10? Amounts are in thousands of dollars.

WEEK
TBC 1 2 3 4 5 6 7 8 9 10
Activity 1 550 150 100 200 100
Activity 2 900 50 75 230 145 260 140
Activity 3 1265 45 190 220 360 450
Activity 4 1009 115 125 325 444
Activity 5 690 105 115 120 350
TOTAL 4414 150 150 275 375 335 595 730 890 564 350

Answer: Cumulative budgeted cost at the end of Week 8 is 3500 K and at the end
of Week 10 is 4414K

WEEK
TBC 1 2 3 4 5 6 7 8 9 10
Activity 1 550 150 100 200 100
Activity 2 900 50 75 230 145 260 140
Activity 3 1265 45 190 220 360 450
Activity 4 1009 115 125 325 444
Activity 5 690 105 115 120 350
TOTAL 4414 150 150 275 375 335 595 730 890 564 350
Cumulative 150 300 575 950 1285 1880 2610 3500 4064 4414
(B) What is the cumulative actual cost at the end of week 10? Determine whether there is a
cost overrun or underrun. What is causing it?

WEEK
‘ AC 1 2 3 4 5 6 7 8 9 10
Activity 1 636 150 120 255 111
Activity 2 898 55 75 230 152 266 120
Activity 3 1401 45 203 229 399 525
Activity 4 1000 129 44 328 499
Activity 5 1106 111 230 320 445
TOTAL 5041 150 175 330 386 355 624 674 1083 819 445

Answer: The actual cost of Activity 1 was 636K while only 550K was budgeted for
it. The actual cost so far of all activities is 5041K, while only 4414K had been
budgeted. There is a cost overrun of $627k.

The cost overrum is since the actual costs of activity 1,3 and 5 are greater than the
budgeted cost.

WEEK
AC 1 2 3 4 5 6 7 8 9 10
Activity 1 636 150 120 255 111
Activity 2 898 55 75 230 152 266 120
Activity 3 1401 45 203 229 399 525
Activity 4 1000 129 44 328 499
Activity 5 1106 111 230 320 445
TOTAL 5041 150 175 330 386 355 624 674 1083 819 445
Cumulative 150 325 655 1041 1396 2020 2694 3777 4596 5041

(C) Below is a table of percentages of work completed on a weekly basis. What is the
cumulative earned value of the project at the end of week 7? Please explain if the cumulative
earned value at the end of week 7 is good? Give reasons.
 Below is a table of percentages of work completed on a weekly basis.
What is the cumulative earned value of the project at the end of week
7? Please explain if the cumulative earned value at the end of week 7
is good? Give reasons.
WEEK
1 2 3 4 5 6 7 8 9 10
Activity 1 5 25 35 35
Activity 2 11 29 15 10 25 10
Activity 3 20 11 15 45 9
Activity 4 10 29 31 30
Activity 5 33 29 22 16

Answer: The cumulative earned value at the end of week 7 is

only $3222.36 K however, $2694K has only been spent. This
is a good news story.
% Work Completed Each Week
EV
TBC 1 2 3 4 5 6 7
Activity 1 550 5 30 65 100 550 550
Activity 2 900 11 40 55 65 90 100 900 900
Activity 3 1265 20 31 46 91 1151 1151
Activity 4 1009 10 39 393.5 394
Activity 5 690 33 227.7 228
TOTAL 3970 3222 3222

Section B

8. Case Study (Compulsory) 10 Marks

Case: Sharp Printing, AG

Three years ago the Sharp Printing (SP) strategic management group set a goal of having a color
laser printer available for the consumer and small business market for less than $200. A few months
later the senior management met off-site to discuss the new product. The results of this meeting
were a set of general technical specifications along with major deliverables, a product launch date,
and a cost estimate based on prior experience.
Shortly afterward, a meeting was arranged for middle management explaining the project goals,
major responsibilities, the project start date, and importance of meeting the product launch date
within the cost estimate. Members of all departments involved attended the meeting. Excitement
was high. Although everyone saw the risks as high, the promised rewards for the company and the
personnel were emblazoned in their minds. A few participants questioned the legitimacy of the
project duration and cost estimates. A couple of R&D people were worried about the technology
required to produce the high-quality product for less than $200. But given the excitement of the
moment, everyone agreed the project was worth doing and doable. The color laser printer project
was to have the highest project priority in the company.
Lauren was selected to be the project manager. She had 15 years of experience in printer design
and manufacture, which included successful management of several projects related to printers for
commercial markets. Since she was one of those uncomfortable with the project cost and time
estimates, she felt getting good bottom-up time and cost estimates for the deliverables was her first
concern. She quickly had a meeting with the significant stakeholders to create a WBS identifying
the work packages and organizational unit responsible for implementing the work packages.
Lauren stressed she wanted time and cost estimates from those who would do the work or were
the most knowledgeable, if possible. Getting estimates from more than one source was encouraged.
Estimates were due in two weeks.
The compiled estimates were placed in the WBS/OBS. The corresponding cost estimate seemed
to be in error. The cost estimate was $1,250,000 over the senior management estimate; this
represents about a 20 percent overrun! The time estimate from the developed project network was
only four months over the top management time estimate. Another meeting was scheduled with
the significant stakeholders to check the estimates and to brainstorm for alternative solutions; the
cost and time estimates appeared to be reasonable.
Some of the suggestions for the brainstorming session are listed below.

• Change scope.
• Outsource technology design.

• Use the priority matrix to get top management to clarify their priorities.
• Partner with another organization or build a research consortium to share costs and to share the
newly developed technology and production methods.

• Cancel the project.

• Commission a break-even study for the laser printer.
Very little in the way of concrete savings was identified, although there was consensus that time
could be compressed to the market launch date, but at additional costs.
Lauren met with the marketing (Connor), production (Kim), and design (Gage) managers who
yielded some ideas for cutting costs, but nothing significant enough to have a large impact. Gage
remarked, “I wouldn’t want to be the one to deliver the message to top management that their cost
estimate is $1,250,000 off! Good luck, Lauren.”
1. At this point, what would you do if you were the project manager?
2. Was top management acting correctly in developing an estimate?
3. What estimating techniques should be used for a mission critical project such as this?

ANSWER:

At this point, what would you do if you were the project manager?
As a Project Manager my first task in hand to understand the rationale for the project scope, the
initial timeline and budget established by the senior management team.
To understand scope, I will investigate the following:
1. Product Scope Description – describes what the project will accomplish
2. Product Acceptance Criteria – describes what requirements must be met in order for the
project to be accepted as complete
3. Project Deliverables – detailed list of deliverables the project will result in
4. Project Exclusions – description of work that is not included in the project and outside
of the scope
5. Project Constraints – lists limits on resources for time, money, manpower, or equipment
(capital)
6. Project Assumptions – describes the list of assumptions the project team and
stakeholders are working under to complete the project

To understand timeline and budget, I will investigate the following:

1. WORK REQUIREMENTS would include a description of the actual tasks which the
project will require.
2. WORK BREAKDOWN STRUCTURE(WBS) discuss how the project scope is to be
subdivided into smaller deliverables in the WBS and WBS Dictionary and how these
smaller components are managed during the life of the project.
3. SCHEDULE/MILESTONES would define the schedule of deliverables, tasks and
milestones for this project.
4. ACCEPTANCE CRITERIA includes a description of how both parties will know when
work is acceptable, how it will be accepted, and who is authorized to accept the work.
 5. PROJECT BUDGET is derived from the costs for this project based on various
categories...
Fixed Costs: Rs xxx,xxx.xx
Material Costs Rs xxx,xxx.xx
Contractor Costs Rs xxx,xxx.xx
Management Reserve Rs x,xxx.xx
Total Project Cost Rs xxx,xxx.xx

Once the actual and not hypothetical details of the project scope, cost, and timeline has been fully
ascertained as a Project Manager I will leverage the Project Change management process. Change
Management is an important part of any project. Changes must be vetted and managed to ensure
that they are within the scope of the project and are communicated to all stakeholders if they are
approved.

DEFINITIONS OF CHANGE defines the different types of changes that may be requested and
considered for the project. These changes may include schedule change, budget change, scope
change, or project document changes. Most changes will impact at least one of these areas and it
is important to consider these impacts and how they will affect the project.

Three important types of changes are worth review:

1. Scheduling Changes: changes which will impact the approved project schedule. These
changes may require fast tracking, crashing, or re-baselining the schedule depending on
the significance of the impact.
2. Budget Changes: changes which will impact the approved project budget. These changes
may require requesting additional funding, releasing funding which would no longer be
required, or adding to project or management reserves. May require changes to the cost
baseline.
3. Scope Changes: changes which are necessary and impact the project’s scope which may
be the result of unforeseen requirements which were not initially planned for. These
changes may also impact budget and schedule. These changes may require revision to
WBS, project scope statement, and other project documentation as necessary.

Was top management acting correctly in developing an estimate?

The organizational philosophy will dictate how top management conduct their business.
However in the current project situation the project manager has to take charge of what has been
assigned to him/her and make the best decision to create a win/win situation and project success.
Using the change management process will be best suited to adjust unrealistic expectations in
scope, cost and time without pointing fingers or creating hostility.
What estimating techniques should be used for a mission critical project such
as this?
There are multiple estimating techniques available for project team. Some of the estimating
techniques available are:
 Parametric estimates
 Analogous estimates
 3-point estimate
 Macro (Top Down) Approach
o Consensus Method - Pooled Experience – Delphi Method
o Ratio Method (Thumb Rule Method)
o Apportion Method – Based on past project experience
o Function Points Method ( for S/W projects)
o Learning Curves (experience curve)
 Micro (Bottom up) Approach
o Hybrid – Phase Estimating
o Range Estimating
o Ratio Estimating Method

For effective project control and accurate estimating to gain detailed cost, time and resource
estimates a Micro (Bottom up) Approach is recommended. In this estimation model the front-line
workers or those involved in completing the different tasks are involved and hence a more accurate
estimate is derived.