MAIN ONLINE SUMMATIVE ASSESSMENT

PROGRAMME Bachelor of Commerce in Project Management

MODULE Introduction to Project Management

INTAKE January 2022

DATE 04 July 2022

TOTAL MARKS 100

SECTION A [100 Marks]
Read the following case study and answer the questions that follow.

The Museum Company

Oleg Zahar, the CEO of the Museum Company (MC), was an architect by training and had recently been
appointment to the CEO role. His biggest challenge in this new position was getting his hands around the
concept of baseline costs. Baseline costs are time - phased budgets used to measure and monitor the
cost performance of projects. They ensure that each phase of a project is profitable and on time. Despite
being very good at what it did and having a large backlog of contracts, MC had no positive cash flow at
the end of each month. A detailed analysis revealed that the lack of cash was a result of the cash inflow
(money the company earned) being less than the cash outflow (money the company paid out) during the
course of its projects. The only time the company’s inflow and outflow were the same was after the
completion of the projects. Thus, this lack of cash meant that the company was struggling to meet its
payroll obligations and had to borrow money from the bank and incur high interest rates each month to
pay its employees. The high interest fees the company was paying to its bank significantly ate away at
its profitability and could eventually lead to the company’s collapse.

BACKGROUND

The MC was a reputable military contractor whose main line of work was building museum exhibits. The
company was founded in 1977 and its annual sales were approximately $ 20 million. The differentiating
factor in this industry was that the military, unlike most other entities, was more concerned with the quality
of its exhibits than with the cost of each one. Thus, if they were working with a reputable contractor who
they had experience with they were unlikely to question the price charged for the work being done. MC
was a reliable contractor that had the reputation of delivering on – time high quality exhibits among the
industry players. Their reputation brought in a consistent stream of work and its pipeline was backfilled
months in advance. However, despite its respectable external perceptions the internal practices of the
Museum Company were questionable at best. Their biggest weakness, which was attributable to the lack
of positive cash flow, was that they didn’t negotiate payment deadlines in advance of performing/finishing
work. Thus, payments (cash inflows) would frequently
be made long after project completion and were the root cause of the cash starvation the company was
experiencing.

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TRAINING

In order to address and fix the Museum Company’s cash inflow issue, Oleg had some hard work ahead
of him. First, he had to identify his most senior/ experienced 15 project managers who would help him
turn the company around. Once this team was identified he had to hire an experienced project
management (PM) training company, which would set up a customized training program for him and his
project managers to help them solve the cash flow problem. The company he hired helped him set up a
four - day training that he and his core team would attend. The training consisted of four modules and
would help the company’s leaders identify/solve the cash inflow problem. The training would cover the
following areas of project management:

1. Scope — During the first day of training the core team would identify a standard scope template to
apply to each project. This would allow them to define what each project is supposed to accomplish and
identify what the end result of each project should be. Furthermore, they would identify activities that
would enable them to achieve the predetermined end result and the appropriate deliverables to
accompany the project activities.

2. Time — The second day would be spent putting together a standard Gantt chart that the company
would use for all its future projects. The chart would help identify start and finish dates of the core
elements of each project as well as payment points that would ensure positive cash flows during the
duration of each project.

3. Cost — The third day would allow the team to identify a standard cost estimate template to use for all
upcoming projects. The cost estimates combined with cost contingencies and time - phased budgets
would be used to establish cost baselines,
which would ensure that all phases of a project would be profitable.

4. Integration — The last day the team would integrate the scope, time, and cost modules to establish
an execution strategy/plan for all future projects. This would include identifying all changes the company
would have to make in its daily operations in order to implement its new execution strategy. During the
last hour of training, the team would apply its execution strategy to its new and existing projects to see if
the new approach would eliminate the cash inflow problem. This exercise would test their ability to work
as a cohesive team as well as their ability to apply new knowledge to the problem and save their company.

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LEARNING

The final step in fixing the Museum Company would take place after the training was complete.
Implementing the execution strategy would require all PMs to have in-depth knowledge of military exhibit
design. In addition to understanding design the team would have to understand how the architecture
piece of each project fit in with the actual construction of each exhibit. Since this understanding could not
be gained from a book, but rather from on - the - job experience, Oleg would have to hire a technical
expert who would provide advice to the PMs and the young engineers until they gained the necessary
knowledge and understanding of the co-workings of the two disciplines. Once the technical expert was
in place and the execution strategy was implemented, the Museum Company would finally be on its way
to being cashflow positive during each phase of its projects.
Source:https://www.studypool.com/documents/2484473/museum-company-case-
study

Answer ALL the questions in this section.

QUESTION 1 (25 Marks)

1.1. Briefly, explain some of the challenges the new CEO faced when he was appointed. (6 marks)

1.2. “His biggest challenge in this new position was getting his hands around the concept of baseline
costs”. Briefly define cost baseline and its importance in project management. (5 marks)

1.3. “MC was a reliable contractor that had the reputation of delivering on – time high quality exhibits
among the industry players. Their reputation brought in a consistent stream of work and its
pipeline was backfilled months in advance”. From the extract, MC delivered projects on time,
high quality and consistent work. This points out the company managed to balance project
constraints. Provide a detailed description of the THREE (3) major project constraints and how
they affect each other. Your response must include a diagram. (14 marks)

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QUESTION 2 (25 Marks)

“During the first day of training the core team would identify a standard scope template to apply to each
project”. This scope statement is what is known as the “Scope Statement” in project management terms.
Briefly define a scope statement and explain ANY SIX (6) items that the team can include in their scope
statement.

QUESTION 3 (25 Marks)

“The second day would be spent putting together a standard Gantt chart that the company would use for
all its future projects. The chart would help identify start and finish dates of the core elements of each
project as well as payment points that would ensure positive cash flows during the duration of each
project”. Give a detailed definition of the Gantt Chart and list ANY FIVE (5) items that the Gantt presents.
Briefly discuss ANY FIVE (5) benefits of using Gantt Charts to the MC Museum team.

QUESTION 4 (25 Marks)

4.1. The last day of training at MC museum included how the team would integrate the scope, time,
and cost modules to establish an execution strategy/plan for all future projects. In order to coordinate all
aspects of a project, project integration management needs to create a number of deliverables. To start
is the development of the project charter. List ANY TEN (10) items that can be included in the project
charter. (10 marks)

4.2. The third day would allow the team to identify a standard cost estimate template to use for all
upcoming projects. Identify and explain ANY THREE (3) cost-estimating tools and techniques that MC
Museum can use for their projects. (15 marks)

END OF PAPER