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MB 0049 - PROJECT MANAGEMENT

Q1. Describe the CPM model.


In the critical path method, the critical activities of a program or a project are identified. These
are the activities that have a direct impact on the completion date of the project.
Key Steps in Critical Path Method
Let's have a look at how critical path method is used in practice. The process of using critical
path method in project planning phase has six steps.
Step 1: Activity specification
You can use the Work Breakdown Structure (WBS) to identify the activities involved in the
project. This is the main input for the critical path method.
In activity specification, only the higher-level activities are selected for critical path method.
When detailed activities are used, the critical path method may become too complex to manage
and maintain.
Step 2: Activity sequence establishment
In this step, the correct activity sequence is established. For that, you need to ask three questions
for each task of your list.
Which tasks should take place before this task happens.
Which tasks should be completed at the same time as this task?
Which tasks should happen immediately after this task?
Step 3: Network diagram
Once the activity sequence is correctly identified, the network diagram can be drawn (refer to the
sample diagram above).
Although the early diagrams were drawn on paper, there are a number of computer softwares,
such as Primavera, for this purpose nowadays.
Step 4: Estimates for each activity

This could be a direct input from the WBS based estimation sheet. Most of the companies use 3point estimation method or COCOMO based (function points based) estimation methods for
tasks estimation.
You can use such estimation information for this step of the process.
Step 5: Identification of the critical path
For this, you need to determine four parameters of each activity of the network.
Earliest start time (ES) - The earliest time an activity can start once the previous dependent
activities are over.
Earliest finish time (EF) - ES + activity duration.
Latest finish time (LF) - The latest time an activity can finish without delaying the project.
Latest start time (LS) - LF - activity duration.
The float time for an activity is the time between the earliest (ES) and the latest (LS) start time or
between the earliest (EF) and latest (LF) finish times.
During the float time, an activity can be delayed without delaying the project finish date.
The critical path is the longest path of the network diagram. The activities in the critical path
have an effect on the deadline of the project. If an activity of this path is delayed, the project will
be delayed.
In case if the project management needs to accelerate the project, the times for critical path
activities should be reduced.
Step 6: Critical path diagram to show project progresses
Critical path diagram is a live artefact. Therefore, this diagram should be updated with actual
values once the task is completed.
This gives more realistic figure for the deadline and the project management can know whether
they are on track regarding the deliverables.
Q2. Write short notes on:

The Shewhart Cycle


Project procurement process
Role of Risk Management in Overall Project Management
Design of PMIS(Project Management Information System)

The Shewhart Cycle


The Shewhart cycle or Shewhart learning and improvement cycle combines management
thinking with statistical analysis. The constant evaluation of management policy and procedures
leads to continuous improvement. This cycle has also been called the Deming cycle, the Plan
DoCheckAct (PDCA) cycle, or the PlanDoStudyAct (PDSA) cycle. While Deming
marketed the cycle to the massesa cycle which he called the Shewhart cyclemost people
referred to it as the Deming cycle.
The Shewhart cycle has the following four stages:
Plan: identify what can be improved and what change is needed
Do: implement the design change
Study: measure and analyse the process or outcome
Act: if the results are not as hoped for
Project procurement process
A project procurement process covers the following functions:
Request to invite bids or tenders: This covers the listing requirements of equipment,
preparing specifications, and sending request to invite bids.
Shortlist suppliers: This includes identifying the required number of suppliers out of the
possible ones.
Invite bids: This element covers the invitation of bids to receiving them.
Evaluate, negotiate, and choose bid(s): This involves making comparative statement of
various elements of price, negotiate technical and commercial aspects including price,
select the lowest bidder(s), and get the approval of a competent person.
Prepare and place orders: This includes writing the purchase order which describe the
products and state all the commercial terms in simple and clear words, obtaining the
signature of a competent, authorized person, and send order to supplier and get his or her
acknowledgement.
Order fulfillment: This includes monitoring the progress of manufacturing of equipment,
its quality, packaging, and associated documentation.
Transport and shipping: This covers all the formalities needed to get the equipments from
the supplier to the project site.

Receive, inspect and store equipment at site: This includes activities like general
inspection, marking the identification number, and inspecting and storing it at a secure
place.

Role of Risk Management in Overall Project Management


Risk analysis and management is a process which enables the analysis and management of the
risks associated with a project. Properly undertaken, it will increase the likelihood of successful
completion of a project to cost, time, and performance objectives. There are a lot of benefits of
proper risk management in projects. Organisations can generate a lot of profit if they deal with
uncertain project events in a proactive manner. You can deliver a project on time, on budget, and
with proper quality if you are able to manage the risks properly. The proper risk management can
increase the roductivity and efficiency of the project team.
In risk management, the following steps should be considered for effective risk management:
Step 1 Recognition of assets at risk: The foremost step in the risk management technique is to
carefully identify the assets which might generate risks in project operations. These assets may
fall under various
groups, such as tangible and intangible assets, movable and immovable assets etc.
Step 2 Valuation of assets: The assets identified and grouped in the previous step are to be
valued and categorised into different classes such as critical and essential.
Step 3 Identifying the intimidation: Threats can be distinct as anything that contributes to the
intermission or devastation of any service/product.
Various compulsions can be grouped into environmental, internal, and external threats.
Step 4 Risk consideration: The process of risk appraisal includes not only assessment as to the
provability of occurrence but also the assessment as to the impending severity of loss, if risk
materialises. This will support in determining the appropriate risk lessening strategy, the residual
risk, and the investment required to alleviate the risk.
Step 5 Emergent strategies for risk management: After risks identification and assessment, one
must apply various risk management techniques such as risk avoidance, risk reduction, risk
retention and risk
transfer etc.

4. Design of PMIS(Project Management Information System)

A PMIS consists of people, equipment, and procedure to collect, process, store, combine,
andcommunicate the needed information to users for carrying out project management functions.
Design of PMIS consists of following four sub-systems
Capture data: This involves capturing data from primary as well as secondary sources
Processing data into information
Storing data/information/reports
Distribute/communicate information

4. Write a note on Earned Value Method (EVM).


The Earned Value Method (EVM) is a useful tool that allows the calculations of cost and
schedule performance measures including cost variance, schedule variance, cost and time overruns for a project. EVM uses the following parameters to calculate these measures:
Budgeted Cost of Work Schedule (BCWS): This is the budgeted cost of work scheduled up
to status date and calculated as:
BCWS = (Budgeted cost of work/day Scheduled days of work up to status date for each
activity)
Budgeted Cost of Work Actually Performed (BCWP) or Earned Value (EV): This is
budgeted cost of work actually accomplished up to the status date and calculated as:
BCWP = (Budgeted cost of an activity x proportion of it actually accomplished up to status
date).Where,
Proportion of an activity = (work completed in physical units)/(Total work planned in physical
units)
Actual Cost of Work Performed (ACWP): This is the cumulative actual cost of work
performed up to the status date and calculated as:
ACWP = (Actual cost of work performed for each activity up to status date)

Using above parameters, performance measures can be calculated as:


Cost Variance = BCWP ACWP (1)
A negative cost variance means that the project is spending more than it should.
Schedule variance (cost) = BCWP BCWS (2)
Negative schedule variance indicates that project is behind the schedule.
Cost performance index (CPI) = BCWP/ACWP
CPI less than one, indicates that the project is spending more than the schedule and is
unfavourable.
Schedule performance index (SPI) = BCWP/BCWS (4)
SPI less than one suggest that the work performed is less than the schedule and is naturally
unfavourable.

5. Discuss the various methods of conflict resolution.


Generally, there are five methods of conflict resolution. They are:
Forcing
Smoothing
Compromise
Problem solving
Withdrawal
These five methods have different results; some temporary and others permanent. They also have
different effects on the attitude of the conflicting parties.
1. Forcing
One way of resolving a conflict is when one party pressurises the other party to agree. It is used
when one person has authority over another and uses it. One example is the manager telling the
foreman, All right, enough of this discussion, and now you listen to my decision.
By this method, a permanent solution is achieved in resolution of the conflict. Though
permanent, this method is not the best solution as it brings frustration, but it saves the time.
2. Smoothing
This method reduces the scale of conflict by making differences seem less important. It occurs
when either one of the parties disagreeing tries to make the differences smaller than they look. If
it is successful, one or both parties will accept the settlement or will accept one of the given
options.
3. Compromise
This method of compromise is similar to smoothing. In this method, each conflicting party gives
up something to reach a compromise. The parties themselves agree to drop some points of
disagreement. Both parties reach a common agreement that has relatively only few points of
disagreement.

Compromise is kind of a middle-of-the-road solution. It is a no win, no loss n situation.


Neither of the conflicting parties is keen to move forward with the compromise plan. This
method of resolution is neither good nor bad for building positive relations in the team. The
conflict is deflected, but the outcome is something that neither party supported in the first place.
4. Problem solving
In the method of problem solving, a committee is set up to find a solution.This method is derived
from the idea that all conflicts have one right solution. By working and discussing, the facts will
be revealed, and it will be clear which of the conflicting parties is right. This method of problem
solving is really the most effective way to settle any conflict. Once the indisputable facts are
found out, then there is no point for any of the parties to disagree, and the conflict is resolved.
5. Withdrawal
Withdrawal may be the most defective way to settle conflicts. In this method, one party
withdraws and pulls back. This method does not actually solve the conflict; just postpones it to
some other day. It has a very negative effect on the team. Even the other team feels bad about
the withdrawal of one team. This is like a small child saying, I do not like then way you are
playing, so, I am taking my toys and going home.

6. Answer the following questions:


a. What are the advantages of using PM software package?
b. What are the types of project performance evaluation techniques?
a) Advantages of using PM software package?
The following are the key advantages of using project management software:
Speed, effort, and accuracy: For a large project, manually carrying out activities like
drawing a network, carrying out time analysis, reporting project progress, generation of various
types of reports, updating network, and maintaining records is quite time and effort consuming.
Accuracy level is also below par.
Use of the software package greatly reduces the time and effort needed for these activities and at
the same time enhances accuracy.
Ability to carry out special functions: The software has the ability to carry out some special
functions like resource scheduling, what if experiment, and export and import of data with ease
and within reasonable time. Manually carrying out these functions is extremely difficult or not
feasible.
Affordability: The price of PC-based software is under $500 which is affordable for an
organisation.
Easy to use: Over the years, the project management software packages have become easy to
use. The package can be handled with minimum training.

Maintenance of record: A project generates a lot of data, reports, documents, etc. Manually
archiving and retrieving these are time and effort consuming. The software package can handle
these functions with relatively less time, effort, and cost.
b. What are the types of project performance evaluation techniques?
The following are the types of project performance evaluation techniques:
(i) Process (or implementation) evaluation: It is also called formative evaluations which are
designed to improve the implementation of a program, policy or strategy as it unfolds. In this
type of evaluation we measure the level to which a program is effective as it was planned. It
usually considers the program activities conformance to statutory and regulatory requirements,
program design, and professional standards or customer expectations.
(ii) Outcome evaluation: It is also called summative evaluations which are designed to judge a
program, policy or strategys relevance, success and/or cost-effectiveness which includes its
relative contribution to the intended outcomes. This type of evaluation measures the level to
which a program attains its outcome-oriented objectives. It mainly focuses on outputs and
outcomes including unintended effects to evaluate program effectiveness but may also consider
program process to understand how outcomes are produced.
(iii) Impact evaluation: This is a type of outcome evaluation that measures the net effect of a
program by evaluating program outcomes with an estimate of what would have happened in the
absence of the program. This type of evaluation is used when external factors are known to
influence the programs outcomes, in order to isolate the programs contribution to achievement
of its objectives.
(iv) Cost-benefit and cost-effectiveness analyses: Cost-benefit and cost effectiveness
analyses compare a programs outputs or outcomes with the costs (resources expended) in order
to produce them. When applied to existing programs, they are also regarded as a variety of
program evaluation. It measures the cost of meeting a single goal or objective, and can be used to
identify the least cost alternative to meet that goal. This analysis aims to recognize all relevant
costs and benefits, generally expressed in dollar terms.
The following are the key advantages of using project management software:
Speed, effort, and accuracy: For a large project, manually carrying out activities like
drawing a network, carrying out time analysis, reporting project progress, generation of various
types of reports, updating network, and maintaining records is quite time and effort consuming.
Accuracy level is also below par. Use of the software package greatly reduces the time and effort
needed for these activities and at the same time enhances accuracy.
Ability to carry out special functions: The software has the ability to carry out some special
functions like resource scheduling, what if experiment, and export and import of data with ease
and within reasonable time. Manually carrying out these functions is extremely difficult or not
feasible.

Affordability: The price of PC-based software is under $500 which is affordable for an
organisation.
Easy to use: Over the years, the project management software packages have become easy to
use. The package can be handled with minimum training.
Maintenance of record: A project generates a lot of data, reports, documents, etc. Manually
archiving and retrieving these are time and effort consuming. The software package can handle
these functions within relatively less time, effort, and cost.