Gabriel Walton PMAN635

Quantitative Methods in Project Management

Final Exam (v.1)
Session 12 – PMAN635 Final Exam (v.1)

Name:

Please answer any ten of the following questions. If you complete all eleven, I will credit you
for the best ten. Each question you answer will be worth ten percent of your final exam grade.
Where a question has multiple parts, each part is equal.

1. For the network shown here, calculate the following:

a. Mean duration (µ) 45.83
b. Variance (σµ2) 4.17
c. Standard Deviation (σµ) 2.04
d. Probability that the network can be completed in 50 days or less.
Z = (X - µ) / σµ = (50 – 45.83) / 2.04 = 2.04
Prob. = 0.979

ACTIVITY OPT NORMAL PESS TE VAR

A 12 15 20 15.33333 1.333333
B 12 15 25 16.16667 2.166667
C 20 25 30 25 1.666667
D 20 25 30 25 1.666667
E 15 20 30 20.83333 2.5
F 6 10 15 10.16667 1.5
2. Given the following project to landscape a new building site:
Activity Immediate Activity Resource Used
Predecessor Duration (days)
A - 2 X,Y
B A 2 X
C A 3 X
D B,C 4 X,Y
E D 3 W,X
F D 1 W,X,Y
G E,F 2 X,Y

a. Draw a Gantt chart using MSP.

b. Assume a 5-day week, find the critical path and project duration in days.

Critical path: A, C, D, E, G.
Duration: 14 work days (20 days when weekend is included)

c. Given that each resource is assigned 100% to each task, identify the resource
constraints.
Resource X and Resource W are constrained. Resource X is overallocated,
working Activities B and C on the same day (16 hours). Resource W is
overallocated, working Activities E and F on the same day (16 hours).

d. Using the MSP default, level the resource and determine the new project duration
and critical path.
Critical path: A, B, D, E, G
Duration: 17 work days (25 days when weekend is included)

e. Identify what alternative solutions can be used to shorten the project duration
without overallocating the resources.
Crashing specific activities along the critical path can also shorten the
project duration. With this, you are adding additional resources to the
project (rather than overallocating current resources).

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3. How might using software tools to report project information lead to problems with
control?
In controlling a project, it is important to audit and perform evaluation. Using
software tools limit the ability of a PM to properly audit performance. In addition to
that, software tools are usually automated. With automation, controlling a project
becomes difficult because the handler (or the project team) is unable to adjust the
resources in the software or change its capabilities. Lastly, project control involves
reviewing and reporting information that might not be quantitative. Using software
that reports information does little to shed light on aspects of the project that might
not involve numerical data (i.e. methods, communication, and deliverables
acceptance).

4. Review the case and answer the questions that follow: BestSoft Enterprises, a leading
manufacturer of electronic devices such as television and handheld computers, is
currently in the process of developing its next generation device, the model 2000c. A key
feature of the 2000c is its color display. According to the original project schedule, the
2000c is to be released 1 month from now. Because the amount of time required to
convert the existing software to capitalize on the color display was significantly
underestimated, the project has fallen behind schedule. The project
manager estimates that without additional resources, the development project will be 3
months late. He has also estimated that increasing the project’s budget of $3 million by
30 percent would permit the project to be completed on schedule. The added budget
would be used primarily to staff the project with additional software engineers.
If released on schedule, first quarter demand for the 2000c is forecast to be 200,000 units
at an initial price of $450. Demand data for similar products suggest that unit sales will
increase 5 percent per quarter over the product’s 3-year life. Despite pricing pressures in
the market, accounting data indicate that BestSoft is able to maintain a 20 percent
contribution margin to profit and overhead through continuous process improvements and
efficiencies accruing from producing in larger volumes.
Question 1: What has a larger impact on BestSoft’s profits, delaying the 2000c’s
introduction by 3 months or increasing the project’s budget by 30 percent?
Delaying the 2000c’s introduction by 3 months will result in a $90 million dollars
loss. This delay has a larger impact than increasing the budget by 30 percent (or a
total of $3,900,000).

Question 2: Are there other factors you would consider in addition to profit?
Other factors to consider include possible staff turnover increase due to the decision
(i.e. unhappy software engineers with the new workload), future outlook for the
company, competence/performance of the additional resources, and residual costs of
the initial profit.

Question 3: What should BestSoft do? Why?

BestSoft should increase the budget by 30 percent and complete the project on
schedule. The amount of profits/income that will be gained is significant. The cash
flow this will generate for the first quarter is huge.

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 Question 4: How generalizable do you think the results of your analysis in this particular
case are to other situations?
I do not think this is generalizable to other situations. The projected income for the
first quarter compared to the cost of meeting the deadline in this situation seems
surreal. In addition, there are usually other factors to consider, other than cost.
Weather problems, resource constraints, and supplier constraints are some
examples. This case seems clean cut and uncomplicated.

5. You are preparing a project to lay fiber optic cable. The first task is to mobilize the team.
You estimate this will take one week and cost $3000. The second task is to lay the cable.
This will take three weeks and will cost $45,000. The total length of the cable is 15
miles. The last task, which will take one week, is to Terminate and test the cable. You
budget $5000 for this. At the end of the first week, you have completed mobilization, but
it cost a total of $4500. At the end of the third week, you have completed five miles of
cable at a total cost of $28,000 (installation only). It takes you a total of 10 weeks to
complete the entire project, for a total cost of $65,000.
a. At the end of week 1:
i. What is your SPI?
ii. What is your CPI?
iii. What is your EAC?
b. At the end of week 3:
i. What is your SPI?
ii. What is your CPI?
iii. What is your EAC?
c. At the end of the project:
i. What is your SPI?
ii. What is your CPI?
iii. What is your EAC?
6. Given the network below:
a. Draw and submit the AOA network

B D
A F

C E

b. What is the critical path? A, C, E, F

c. What is the duration of the network? 18
d. What is the normal (without crashing) cost? $1300
e. What is the minimum duration? 11
f. What is the new price? $2000

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 Task Pred Norm t Norm $ Crash t1 Crash $
A - 3 50 2 150
B A 4 100 2 150
C A 5 200 3 300
D B 6 250 4 350
E C 7 400 4 600
F D, E 3 300 2 450

7. Identify which of the following statements is true and which is false:

a. The primary purpose of project evaluation is to give feedback to senior
management for decision and control purposes. True
b. The original criteria for selecting and funding a project are largely irrelevant for
project evaluation. False
c. The timing of an audit depends on the purpose of the audit. True
d. It is best for the project manager and the project team to make the termination
decision. False
8. A project that cannot go over budget is considered (pick one):
a. Time constrained
b. Schedule constrained
c. Budget constrained
d. Performance constrained

9. A task has a normal duration of 9 days and crash duration (the minimum duration) of 7
days. Its normal cost (total for 9 days) is $4000 and its crash cost is $10000 (total for 7
days). What is the crash cost per day?
a. $14000
b. $7000
c. $5000
d. $4000
e. $3000

10. Identify which of the following statements is true and which is false:
a. The shortest time to complete a network is equal to the duration of the longest
path through the network. True
b. The actual project duration will be known with certainty when the project is
completed. True
c. The difference between EST and LFT is called slack. False
d. The start to finish linkage is normally used in situations where it is desirable for
two or more activities to finish at the same time. False
11. A task is expected to take 20 hours of labor at $25 per hour (direct cost). The required
material cost is $500. The organization adds a burden of 30% to all direct labor costs to
account for overhead. It does not add any burden on top of material costs. The total task
cost is:
a. $500
1

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b. $1,150
c. $1,250
d. $1,300
e. $1,500

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