Individual Assignment

Project Management

Attempted from Con.2041-07 BB-8609 Q1. Define a Project. What are the characteristics of a project? (5 marks) Ans: Any set of activity(s) carried out with a definite purpose or goal can be termed as a project. The outcome of such activity(s) is a product or service. Following are some characteristics of a project: 1. Temporary Duration: Every project has a start, an end & and estimated duration. Any activity carried out perpetually cannot be termed as a project for e.g. production of cars or motorcycles. 2. Unique & Non-Repetitive: Each project goal or outcome is always unique & can never be the same. Even construction of 2 identical houses would be different in some way or the other hence construction of each house is unique & a separate project by itself. 3. Scope: A project has a defined scope of activity(s) to be carried which are very well defined. 4. Costs: All project costs are estimated & evaluated prior to commencement of the project. 5. Management: The project management team is responsible of conduction & monitoring the activity(s) of a project & this team may comprise of various members of the organisation generally not working together but have been bought together a particular project.

Q2. State any two situations where a Dummy activity is used. (5 marks) Ans: In a Activity-on-Arrow network diagram where two activities (e.g. A & B) have to complete in order for a following activity to start but the two activities (A & B) cannot end on the same node due to constraints of other following activities, a Dummy activity is used to show relation between the two activities (A & B) with the help of a dotted arrow, depicting that both have completed & activity depending on completion can start. Dummy activities can be used to maintain the pre-defined precedence relationships between 2 activities. Any nodes (activities) which, in the original network, have no precedence relationships coming out from them must be connected to a dummy activity to ensure that we correctly account for the end of the project. i.e. to ensure one common end-point of a project.

Q3. Why is a project manager called an Entrepreneur? (5 marks) Ans: A project manager must take responsibility for leading the project effort towards the stated and agreed upon goals and objectives of the project. He or she must also have a very clear idea of what constitutes the successful conclusion of the project and work towards that end. Along the way, the project manager has a number of duties to fulfil such as helping the sponsor to understand the details of the project where changes (scope changes) may be required, planning and contingency planning, scheduling, communication (technical and project public relations) progress reporting, coordination and supervision. All of this must be carried out as necessary to ensure the proper and efficient execution of the work by all those involved. Since all of the above are also carried by any entrepreneur for his or her business, a project manager can be considered as an entrepreneur for the duration of the project for the projects managed by him or her.

Individual Assignment

Project Management

Q4. Write short note on Types of Project Risk (5 Marks) Ans: Every risk has 2 components, probability of occurrence (chance) & severity or impact. In any project evaluation, only projects with Low-to-medium chance & low-to-medium impact should be considered as safe to be engaged in, called as projects in Green Zone. All projects with medium-to-high chance & medium-to-high impact should be avoided as they are considered to be in Red Zone. All other projects fall in the White Zone & extreme caution should be exercised while engaging in them. Some common types of Project Risks are as follows: 1. Scope: This should be clearly defined before the project is commenced as any changes in the scope can delay the project & also make it commercially non-viable 2. Schedule: Delay on the part of materials, resources or finance etc. can cause delays to schedule of the project 3. Resources: Outsourcing, Attrition, Scarcity of Skills, faulty or un-useable material can be attributed to risk arising out of improper resources. Attempted from Con.2194-06 BB-10620 Q The following table provides normal & crash times as well as normal & crash cost for the activities of a project. (20 Marks) Normal Normal Cost Crash Activi Time (Rs. Time ty (Weeks) Lakhs) (Weeks) 1-2 3 5 1 2-3 4 8 3 2-4 3 4 2 2-5 8 6 7 3-6 4 3 2 4-6 6 2 4 5-7 5 10 4 6-7 3 7 1 i. Draw the network & find critical path Crash Cost (Rs. Lakhs) 9 14 6 6 5 3 14 10

ii. Using the above information, crash or shorten the activities step by step until the shortest duration is reached. Solution: The project will cost Rs. 45 Lakhs under normal duration & cost. Normal Time (Weeks) [A] 3 4 3 8 4 6 Normal Cost (Rs. Lakhs) [B] 5 8 4 6 3 2 Crash Time (Weeks) [C] 1 3 2 7 2 4 Weeks Crashing Possible = A-C 2 1 1 1 2 2 Crashing Cost Per Week (Rs. Lakhs) =(D-B)/(A-C) [CCPW] 2 6 2 0 1 0.5

Activi ty 1-2 2-3 2-4 2-5 3-6 4-6

Crash Cost (Rs. Lakhs) [D] 9 14 6 6 5 3

Individual Assignment 5-7 5 6-7 3 Total

10 7 45

Project Management 4 14 1 10

1 2

4 1.5

Network Diagram (Activity on Arrow)

3 1
3 weeks

s 4 ek e 3w weeks 8 we ek s

4 5

4 we ek s 6 weeks

5 weeks

3 wee ks

Project Paths I : 1 2 3 6 7 : 14 weeks II : 1 2 4 6 7 : 15 weeks III : 1 2 5 7 : 16 weeks = Critical Path (CP)

Crashing Table Paths I:12367 II : 1 2 4 6 7 III : 1 2 5 7 Crash 0 Crash 1 Crash 2 Crash 3 Crash 4 14 weeks 14 weeks 13 weeks 12 weeks 12 weeks 15 weeks 15 weeks 14 weeks 13 weeks 12 weeks 16 weeks 15 weeks 14 weeks 13 weeks 12 weeks

Crashing Cost Analysis Table Crash # Duration Crash Cost (Weeks) (Rs. Lakhs) 0 16 0 1 15 0 2 14 2 3 13 2 4 12 4.5 Total 8.5 Crashing Step 1: Reduce CP by 1 week, Activities to be considered: 1 2 : CCPW = 2 2 5 : CCPW = 0 5 7 : CCPW = 4

Individual Assignment Project Management Since CCPW for activity 2 5 is 0, we crash it by 1 week. Crashed CP after step 1 is 15 weeks without any additional cost. Step 2: Reduce Path II & III by 1 week as both are now 15 weeks, Activities to be considered: 1 2 : CCPW = 2 5 7 : CCPW = 4 2 4 : CCPW = 2 4 6 : CCPW = 0.5 6 7 : CCPW = 1.5 Since activity 1 2 is common to both paths, we crash it by 1 week Paths II & III crashed to 14 weeks & path I crashed to 13 weeks after step 2 with additional cost of Rs. 2 lakhs

Step 3: Reduce Path II & III by 1 week as both are now 14 weeks, Activities to be considered: 1 2 : CCPW = 2 5 7 : CCPW = 4 2 4 : CCPW = 2 4 6 : CCPW = 0.5 6 7 : CCPW = 1.5 Since activity 1 2 is common to both paths, we crash it by 1 week Paths II & III crashed to 13 weeks & path I crashed to 12 weeks after step 3 with additional cost of Rs. 2 lakhs

Step 4: Reduce Path II & III by 1 week as both are now 13 weeks, Activities to be considered: 5 7 : CCPW = 4 2 4 : CCPW = 2 4 6 : CCPW = 0.5 6 7 : CCPW = 1.5 Since CCPW for activity 4 6 is least 0.5, we crash it by 1 week, accordingly we also crash activity 5 7 by 1 week to make all paths equal i.e. 12 weeks All paths crashed to 12 weeks after step 4 with additional cost of Rs. 4.5 lakhs

Ans: Since path III (1 2 5 7) cannot be crashed any further than 12 weeks, the shortest duration the project can be completed is 12 weeks, as compared to original project duration of 16 weeks,

Individual Assignment Project Management however while doing so total additional cost of Rs. 8.5 lakhs is incurred thereby increasing the project cost from original Rs. 45 lakhs to Rs. 53.5 lakhs.