Organised byCentre for Excellence in Project Management (P) Ltd. A-48, Sector 5, Noida 201301 Tel: (0120) 242-0444, 242-0463 M: +91 9999 684 632 Email:
[email protected] &
[email protected] for Three Day Workshop on leading to the Certificate In Project Management (CIPM) Totality of Project Management 7 - 9 April 2014 Indo German Tool Room Aurangabad Three day Workshop on Totality of Project Management Leading to the Certification in Project Management (CIPM) Workshop Agenda © Centre for Excellence in Project Management (P) Ltd. (CEPM) 2014 A - 48, Sector - 5, Noida - 201 301, India Tel.: (120) 242 0444, 242 0463 Fax: (120) 242 1482 Email:
[email protected] Website: http://www.cepm.com ii Day 1 0930 - 0945 Inauguration - Saraswati Invocation - Introduction 0950 - 1100 Project Management Knowledge (PMKQ™) Test Project, Programme, Operations Project Management 1100 - 1120 Tea Break 1120 - 1315 Project Life Cycle Need Analysis Project Stakeholders Business Case - Payback Period, NPV, IRR Project Charter Project Management Plan Practice Q&As 1315 - 1400 Lunch 1400 - 1510 Success Criteria for project Scope & Deliverables Management - Work Breakdown Structures 1510 - 1530 Tea Break 1530 - 1745 Time Management Network Diagrams - Critical Path analysis (CPM) - Bar charts - Resource Histograms - PERT, Standard Deviation Duration Compression - Crashing - Fast Tracking Practice Q&As Three day Workshop on Totality of Project Management Leading to the Certification in Project Management (CIPM) Workshop Agenda © Centre for Excellence in Project Management (P) Ltd. (CEPM) 2014 A - 48, Sector - 5, Noida - 201 301, India Tel.: (120) 242 0444, 242 0463 Fax: (120) 242 1482 Email:
[email protected] Website: http://www.cepm.com iii Day 2 0930 - 1100 Cost Management Cost Estimation Cost Budgeting Earned Value Management System Practice Q&As 1100 - 1120 Tea Break 1120 - 1315 Quality Management Quality Planning, Assurance, Control - Quality tools Practice Q&As 1315 - 1400 Lunch 1400 - 1510 Risk Management - Risk identification - Qualitative andQuantitative Risk analysis - Risk Response Strategies Practice Q&As 1510 - 1530 Tea Break 1530 - 1745 HR Management Organization Structures Roles & Responsibilities Responsibility Assignment Matrix Teamwork Conflict Management Leadership Motivating Team Members Practice Q&A’s Three day Workshop on Totality of Project Management Leading to the Certification in Project Management (CIPM) Workshop Agenda © Centre for Excellence in Project Management (P) Ltd. (CEPM) 2014 A - 48, Sector - 5, Noida - 201 301, India Tel.: (120) 242 0444, 242 0463 Fax: (120) 242 1482 Email:
[email protected] Website: http://www.cepm.com iv Day 3 0930 - 1100 Communication Management Information & Reports Procurement & Contract Management Practice Q&As 1100 - 1120 Tea Break 1120 - 1215 Procurement & Contract Management (Contd.) 1215 - 1315 Negotiation Change Control processes Configuration Management Integration Problem Solving Deliver & Closeout Lessons Learned Practice Q&As 1315 - 1400 Lunch 1400 - 1500 Mock Test (60 Minutes) 1500 - 1520 Mock Test Discussion 1520 - 1540 Tea Break 1545 - 1745 CIPM final Examination (2 hrs) - CIPM exam is administered by the Institute of Project Management Certification ( IPMC), the national PM Certification Body of PMA, India v The CIPM examination The CIPM examination Is Administered Is Administered by by PMA PMA The Indian National Certification body of The Indian National Certification body of International Project Management Association International Project Management Association (IPMA), Switzerland (IPMA), Switzerland ——IPMA membership across 56+ IPMA membership across 56+ countries countries Some Leading companies that have opted for CIPM •NTPC •NHPC •Coal Indi a •Adani Power •Avera •Bharat Hotels •Forti s Heal thcare •GAIL •HCL Technologies •Indi an Oil •IL&FS Property Mgmt •Lanco •Idea Cel lular •Jindal Steel & Power •Mazagon Dock Ltd. •Max Healthcare •GENPACT •MECON •North Del hi Power Ltd •Numaligarh Refi nery •Neyvel i Li gnite •Nuclear Power •Oil Indi a Ltd •Phi li ps Carbon Bl ack •Rai l Vikas Ni gam Ltd •RITES Ltd. •Power Gri d Corp. •SAIL •Tehri Hydro •Xansa (Indi a) Ltd CIPM Exam consists of 1 Paper CIPM Exam consists of 1 Paper Total Time: 2 Hours Total Questions: 125 multiple choice questions in 4 sections Total Marks: Total Marks: 175 175 Passing Score: Overall 60% 50% in each section Must CIPM Exam CIPM Exam –– has 3 Types of Questions has 3 Types of Questions Type 1: Type 1: Has 1 answer from Has 1 answer from 44 opti ons. opti ons. Carri es Carri es 11 mark mark Type 2: Type 2: Has 1 answer from Has 1 answer from 5 5 opti ons. opti ons. Carri es Carri es 22 marks marks Type 3: Type 3: Sel ect 1 answer from Sel ect 1 answer from 44 opti ons. opti ons. Needs cal cul ati ons. Carri es Needs cal cul ati ons. Carri es 55 marks marks Negati ve Marki ng: 25% of the marks for the questi on Negati ve Marki ng: 25% of the marks for the questi on CIPM Exam CIPM Exam –– Break Break- -up of Questions up of Questions Section Type 3 Questi ons 5 marks per Qstn Type 2 Questi ons 2 marks per Qstn Type 1 Questi ons 1 mark per Qstn Total marks in Paper Pass marks Sections 50% Paper 60% 1 2 (10 mks) 5 (10 mks) 15 (15 mks) 35 17 2 4 (20 mks) 11 (22 mks) 28 (28 mks) 70 35 3 - 5 (10 mks) 25 (25 mks) 35 17 4 - 5 (10 mks) 25 (25 mks) 35 17 Total no. of Qstns in Paper 6 out of 125 Qstns 26 out of 125 Qstns 93 out of 125 Qstns 175 105 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Cer t i f i c at i on I n Pr oj ec t Cer t i f i c at i on I n Pr oj ec t Management (CI PM) 1 Tot al i t y of Pr oj ec t Management Tot al i t y of Pr oj ec t Management Leadi ng t o ©2014 CEPM What is a Project? Means of converting Vision to Reality A set of activities undertaken to meet specific objectives for changes A temporary endeavor undertaken to create a unique product, service or result 2 1 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM • Newproducts / services / Business processes / Infrastructure • Changes in existing products and services Projects can be undertaken for: Projects are undertaken for diverse reasons: • Business • Industry • Government • Social sector 3 What is a Project? ©2014 CEPM What is a Project? Project has following Characteristics: • Temporary – have a definite beginning and an end • Unique– no two projects are identical • Predefined goals & objectives – financial/ social /economic • Budgets & schedules – prefixed budget and timeframe • Uses Resources & Manpower – both are limited • Quality / Performance – determined at beginning • Face Risks – known and unknown risks • Have a Project Life cycle– many phases from start to end 4 2 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM What is a Programme? Management of a coherent group or a collection of projects that are related to a common objective to deliver additional benefits to the organization. 5 ©2014 CEPM What is a Programme? • A group of projects related to a common objectives e.g. business aim • An interdependency between number of projects • Creating more benefit for the organization • Resource allocation amongst a portfolio of projects • Achieve overall benefits for the business not just for a project • An organization’s business strategy required to be implemented through projects Programme management can cover: 6 3 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM What is Operation Operations are used for: • Routine, Ongoing, Repetitive work • Production / Manufacturing of Standard Product • Sustaining existing business Operations NOT used for Change Management 7 ©2014 CEPM Operations Vs Projects Projects Operations Unique Repetitive Temporary Ongoing Aim is to achieve the objectives of the project & then close the project Objective of operation is to sustain the business Future orientation Present Orientation Create new things Maintain existing things Differences between Projects & Operations 8 4 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Project Life Cycle Project Life Cycle (PLC): Length of each phase will vary Each phase associated with major processes and deliverables Names used to describe each phase wil l vary A PLC is a sequence of phases from project start to project end Generically there are 4 phases :Start or Concept phase, Planni ng phase , Execution Phase & Delivery/Closeout Phase However, Number of Phases in PLC wil l vary dependi ng on the industry or sector 9 © 2014 CEPM Project Life Cycle 5. Requirements 10 5 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM What is a Project? Project Life Cycle: •Conceptualize •Plan •Organize •Implement •Control •Integrate •Deliver & Closeout •Knowl edge Leverage In CIPM, the PLC is divided into these 8 generic phases 11 © 2014 CEPM Project Life Cycle Work can be broken up into manageable blocks or phases Each phase has specific deliverables More efficient allocation of all kinds of resources –requirements vary with phase Better cost control – funds needed for next phase, procurement can be planned & released as needed Allows better planning, scheduling, estimating & control Some Advantages of a Project Life Cycle: 12 6 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Characteristics Of A Life Cycle High Low Opportunity to add Value Cost to make change Life Cycle of Project (Time) 13 ©2014 CEPM Characteristics Of A Life Cycle High Low Uncertainty of Success Amount at Stake Life Cycle of Project (Time) Low 14 7 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Project Management What is Project Management (PM)? Project Management is the application of processes, knowledge, skills, tools and techniques to meet project requirements and to produce deliverables within specified goals & objectives. Project Management is the most efficient way for implementing unique changes 15 ©2014 CEPM Project Management Project Management manages and controls the project work by: • Planning the work in detail : ‘Why’, ‘What’, ‘Who’, ‘When’, ‘Where’, ‘How’ and ‘How Much’ • Understanding specific requirements of all Stakeholders that may be conflicting • Identifying the Scope, Time, Cost and Quality/performance criteria and potential risks • Making one person, generally the project manager accountable for the project 16 8 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Project Management Project Management manages and controls the project work by: •PM combines “ Hard” and “ Soft” skills Hard skills – Technology, Tools & Techniques, Processes Soft skills – Leadership, Team Building, Communication, Decision Making, Trust Building, Conflict Management, Coaching, Political and Cultural Awareness 17 © 2014 CEPM Project Stakeholders Who is a Stakeholder? All individuals, groups and organizati ons directly involved in the project or that may be affected by the project activities and the project outcome Understanding and Managing stakeholder needs and requirements is critical for project success 18 9 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM A stakeholder could be: Passively involved in the project Actively involved in the project work and proj ect outcome Positive about the project and help the Project to succeed Negative about the project and be opposed to it A Stakeholder can help or hinder the project Project Stakeholders 19 © 2014 CEPM Key Stakeholders are: •Project Manager - is overall responsible to ensure project meets it's goals and objectives •Project Sponsor – represents top management. Is responsible to ensure funds availabl e and to provide overall, high level gui dance to project •Team Members – perform the work. At core of success •Customer / Client – individual /group /organi zation that wil l use the deliverables. Can have one or many •Performing organization – employs the people engaged in project work. Internal project or external project Project Stakeholders 20 10 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Stakeholder Analysis: Stakeholders are classified according to their interest, influence and involvement in project. Project manager should follow below steps while doing stakeholder analysis : Step 1 : Stakeholder Identification • Identify all potential project stakeholders and relevant information such as their roles, departments, interest, knowledge levels, expectations and influence levels . • Key stakeholders are easy to identify. Other stakeholders usually identified by interviewing identified stakeholders and expanding the list until all potential stakeholders included. Stakeholder Analysis 21 ©2014 CEPM Step 2 : Analyze Stakeholder Authority , Interest and Influence • Identify potential impact or support each stakeholder could generate and classify them so as to define an approach strategy . • Multiple classification models available e.g. – Power / interest grid ( Authority / Concern) – Power / influence grid (Authority / involvement ) – Influence / impact grid (Involvement / ability to effect changes) Stakeholder Analysis 22 11 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Keep Satisfied Manage Closely Monitor (Minimum effort) Keep Informed Low High High Low Power Interest Power/Interest grid for mapping stakeholders Manage closely – High interest & high power in project High interest, less power – keep informed Monitor – Low interest, low power Low interest, high power – keep satisfied Step 3 : Develop strategies to manage stakehol ders’ expectations 23 © 2014 CEPM Need Analysis goes through three phases – Need Emergence, Need Recognition & Need Articulation • Needs Recognition The Need is recognized by the organizati on - it’s validity and urgency is studied and rated against other needs • Needs Emergence A Need Emerges in organization from any level for a new requirement Need Analysis Cycle 24 12 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Need for Change • Needs Articulation The Need is evaluated Need Analysis 25 © 2014 CEPM Business Case A Key document in the project that shows the justification for undertaking the proj ect i.e. the “ why” of the project Used to make a decision of whether to invest in the project or not - justifies the investment Business Case is “ owned” by the Sponsor & Sponsor is responsible for it’s development Is developed from the Need statement 26 13 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM To identify the stakeholders and their needs Link the project to the business/corporate strategy and show the priority of the project in the overall business plan of organization Show key project requirements to achieve the stated business goals Document the financial and non-financial feasibi lity of the project Document high level scope of the project, the assumptions made and constraints Role of Business Case 27 © 2014 CEPM Contents of Business Case The project’s success criteria and Key Performance Indicators (KPIs) Investment appraisal data The business Need for taking up the project Objectives of the project Product / service to be delivered by the project Rough Cost of implementing the project and the income expected from project after it is completed 28 14 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Contents of Business Case Project’s overall time, cost and quality obj ectives Assumptions and constraints Major risks perceived and opportunities PESTLE Analysis – Political, Economic, Social, Technological, Legal and Environmental Organization’s strategy for implementing project Key resource requirements 29 © 2014 CEPM Payback Period Discounted cash flow (DCF) method Net Present Value (NPV) which uses DCF method Internal Rate of Return (IRR) which uses DCF method Investment appraisal techniques widely used to appraise projects are: Investment Appraisal 30 15 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Is the time expected to be taken by the proposed project to get a financial return equal to the original investment made Payback Period is achieved when the cumulative cash flow becomes equal to the initial investment Does not consider the whole life span of the project - calculation stops once the original investment has been recovered Payback Period Investment Appraisal 31 © 2014 CEPM Payback Period Initial Investment (year 0) =100K Payback period for Project A is 4 years 2.57 months Cash Flow up to year 4 =85K Shortfall of 15K (100K - 85K) Cash Flow in year 5 =70K Per month cash Flow in year 5 =70K / 12 = 5,833 15K / 5833 =2.57 months Cash Flow =100,000 in 4 years 2.57 months Investment Appraisal 32 16 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Is simple to use Good as an initial filter Standard technique used worldwide Favours projects with faster returns, better for liquidity Effective for high risk situations Payback Period - Advantages Investment Appraisal Ignores the Time Value of money Does not consider project cash flows after Payback Period has been reached Not good for long term projects Payback Period - Disadvantages 33 © 2014 CEPM Discounted Cash Flow (DCF) method Relates future cash flows over the project’s life to a common base value DCF based on fact that the value of money depreciates with time Expected Cash flows are adj usted for money over ti me Discounting Cash Flow gives more realistic picture of potential project’s feasibili ty Investment Appraisal 34 17 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Net Present Value (NPV) Internal Rate of Return (IRR) Used by two key Investment appraisal techniques: Discounted Cash Flow (DCF) method Investment Appraisal 35 © 2014 CEPM Net Present Value (NPV) Differ in Time spans, Initial Investments, and Cash Flows •Higher the NPV, better the project •NPV helps to compare viabili ty of projects that: •Expected Cash flows adjusted for money over time •Reject any project having Negative NPV •Quantifies expected profit in absol ute terms Investment Appraisal •Shows project’s net value in today's monetary terms 36 18 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Step 1:Calculate Cash Flowfor each year (Income - Expenses) Step 2:Calculate the PV for each year - discount annual cash flow by the given Discount Rate Step 3:Sum up the Present Values calculated for each year Step 4:Subtract project's Initial Investment from cumulative Present Values to obtain the project’s NPV Net Present Value (NPV) Investment Appraisal Present Value (PV) =FV / (1 +r) n FV =Future Value; r =Discount rate; n =No. of years 37 ©2014 CEPM Investment Appraisal Calculating NPV • Year 0=Initial Investment Discount (Interest) Rate is 10% Discount Factor @ 10% is given • Year 1=25 x .91 or 25 / 1.10 =22.7 • Year 2=25 x .83 or 25 / 1.210 (1.10 x 1.10) =20.75 • Year 3 =20 x .75 or 20 / 1.331 (1.10 x 1.10 x 1.10) =15.00 • Year 4=15 x .68 or 15 / 1.464 (1.10 x 1.10 x 1.10 x 1.10) =10.20 Cumulative PV =112,100 NPV =112.100 less 100,000 =12,100 • Year 5=70 x .62 or 70 / 1.610 (1.10 x 1.10 x 1.10 x 1.10 x 1.10) =43.40 38 19 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Investment Appraisal - NPV Disadvantages Accuracy depends on how well future cash flows and discount rate is predicted Does not consider non- financial data Has bias towards short termprojects Advantages NPV is more realistic – considers time value of money Considers whole life span of product / service – from project beginning to product termination Higher the Discount rate, Lower the NPV 39 © 2014 CEPM Investment Appraisal IRR is the Discount Rate at which NPV for project = 0 Shows the Discount Rate at which project will break even IRR expresses profitability as a percentage while NPV expressed profitability in absolute terms Internal Rate of Return (IRR) 40 20 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Higher the IRR, better the project IRR arrived at by trial and error Higher the Discount rate (Interest rate) lower the NPV Calculated to nullify impact of time value of money on proposed project Investment Appraisal Internal Rate of Return (IRR) 41 © 2014 CEPM How Project Comes into Existence ? Need Analysis Project Management Plan Business Case Project Charter Business Case Approval 42 21 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Project Charter The Project Charter formally authorizes the project to go ahead Once Business Case is approved it can act as the Project Charter or a separate Charter is documented A contract can also act as the Charter Charter forms link between project and the on-going work of the organization 43 © 2014 CEPM Project Charter Can also be issued by another person / organization associated with funding e.g. government dept., funding agency Project Charter gives the project manager authority to use organization's resources for the project The Sponsor is responsible to issue the Project Charter 44 22 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Name of Project Manager Expected project budget Assumptions / constraints High level description of product/service to be delivered by the project Milestone schedule showing summary of required completion dates Organizations/departments to be involved Contents of Project Charter 45 © 2014 CEPM Why – Management’s statement of success criteria What – What are we going to accompl ish Who – Who will do the work When – Schedules to do work How – PM’s vision of doing the work: Resources, Tools & techniques, IT needs, Technical issues, Quality, validation & testing, Risk management, Procurement, Change management etc. How much – project costs and budget Answers to the following: Project Management Plan (PMP) 46 23 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Project Management Plan (PMP) Detailed planning done for different aspects of project & integrated into a single plan known as the Project Management Plan (PMP) PMP is key document of the project Is owned by the Project Manager Is used to control the project Forms the baseline of project Developed by Project Manager with project team Approved by the Sponsor / client Should be accepted by Sponsor & project team 47 © 2014 CEPM The Project Management Plan contains : Project Management Plan (PMP) 1. Scope Management Plan 2. Schedule Management Plan 3. Cost Management Plan 4. Staffing (HR) Management Plan 5. Communication Management Plan 6. Procurement Management Plan 7. Risk Management Plan 8. Quality Management Plan 9. Process Improvement Plan 48 24 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Project Management Plan (PMP) 10. Scope Baseline 11. Schedule Baseline 12. Cost Baseline 13. Quality baseline 14. Risk Register 15. Milestone List 16. Resource Calendar 17. Change Management Plan 18. Configurati on Management Plan The Project Management Plan contains: 49 © 2014 CEPM Success Criteria What is Success Criteria? Criteria by which project success will be judged by stakeholders Success criteria should be clearly defined with stakeholders at project beginning Includes Internal & External parameters Traditional view - a project is successful if completed on time, within budget and meet's required quality/performance criteria 50 25 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Success Criteria What is Success Criteria? Different stakeholders have different success criteria for same project which may conflict e.g. • Business obj ectives for undertaking project • Key deli verables • Key parameters li ke Time , Cost •Customer Satisfaction • Quali ty requirements • KPIs meeting stakeholder specifications 51 © 2014 CEPM Success Criteria What is Success Criteria? Key Performance Indicators (KPIs) The measurable values of success criteria are known as Key Performance Indicators KPI’s help to achieve the success criteria by allowi ng PM to take corrective actions timely 52 26 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Project Success Factors • Goals and Objectives are clear and agreed with stakeholder • Support from senior management • Clear Scope from client / sponsor / users • Timely communication with all stakeholders • Motivated team / Positive attitude of team members • Subject matter expertise • Realistic Schedule and Cost Estimates • Continuous Risk assessment and management Factors required for success – more within control of the Client ,PM, Sponsor, team, top management etc. ©2014 CEPM Triple Constraints of Project Management Conventionally, project’s focus on three major aspects of Scope, Time and Cost Maintaining Quality is implied in the project Challenge is to manage all 3 sides 54 27 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Scope, which lies at base of the Triple Constraints defines the total work required to execute a project and is the constraining factor within which the project has to perform Scope Management Scope Definition 55 © 2014 CEPM Scope Definition Project Manager and project team must have clear understanding of the scope The product or service to be delivered by project Scope covers two aspects: The project work that will have to be done to successfully deliver the product or service Scope Management Uncontrolled changes in scope, without getting a corresponding increase in the time and budget allowances are called Scope Creep . 56 28 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Scope Management Plan How total scope will be managed & controlled How scope will be identified, defi ned, classified, documented, managed and integrated into the project How WBS will be developed How scope changes made after WBS is finalized will be managed & integrated into project Scope Management Plan describes the various steps needed to manage project’s scope and the scope changes 57 © 2014 CEPM Scope Planning Develops the Scope Statement Scope statement acts as agreement for understanding between project team & customer Scope Statement is a detailed, description of the work required to be done to deliver the project’s product or service or result. First a broad, macro level planning done then the micro level detailed planning done 58 29 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Product Scope Description - Characteristics of the Product, Services or Result Product acceptance Criteria Project Objectives - Measurable success criteria e.g. Cost, schedule, quality or Business objectives Project Deliverables - Product, Services or Results of the project including ancillary results (Reports and Documentation) Project Requirements - Conditions or capabilities that must be satisfied by the Deliverables as specified in the contract, specification or Stakeholder analyses Scope Statement Project Scope Statement should include: 59 © 2014 CEPM Project Constraints - Pre-defined budget , imposed schedule end date Project assumptions Project Boundaries (What is not included in the scope) Initial Project Organization Initial Identified Risk Schedule Milestone Preliminary Cost estimate Approval Requirement Scope Statement Project Scope Statement should include: 60 30 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Scope Management - WBS Work Breakdown Structure (WBS) The WBS is a task oriented hierarchical decomposition showing all the work to be done by project team to deliver the project’s product / service and achieve the project objectives 61 © 2014 CEPM Scope Management - WBS After scope statement is made, entire scope is reviewed and all deliverables are decomposed into smaller more manageable components giving rise to what is known as the Work Breakdown Structure Each descending level shows greater detail WBS developed by project team based on collective experience and by brainstorming with other stakeholders to list out all possible tasks to be performed Work Breakdown Structure (WBS) 62 31 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Scope Management - WBS Decomposition Decompose higher level elements to lower level Decompose to level where work can be scheduled cost estimated, assigned and controlled Verify that the level of decomposition of work is correct and adequate Identifying the deliverables and related work Breaking-up the entire project into smaller, more manageable elements of work Different deliverables will be decomposed to different levels 63 © 2014 CEPM Sample WBS 64 32 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Work Breakdown Structure Residential Construction Build Foundation Build Structure Internal services External Services Earth Work Base Preparation Blinding Layout Excavation Leveling Anti-termite Polythene Work Shuttering Concreting Compound Wall Driveway Water Supply lines Sewage Lines Electric Connection 65 ©2014 CEPM A SW Project 1.0 Prepare SRS Prepare Design Documents Code Software SW Testing SW Documentation Deployment Gather Requirement Analyze requirements Document SRS Prepare HLD Prepare LLD Code Module1 Code Module 2 Test module 1 Test Module 2 Integration Test User Acceptance SW Training LLD Module 1 LLD Module 2 SW Transition 1.1 1.2 1.3 1.4 1.5 1.6 1.1.1 1.1.2 1.1.3 1.2.1 1.2.2 1.3.1 1.3.2 1.4.1 1.4.2 1.4.3 1.6.1 1.6.2 1.6.3 1.2.2.1 1.2.2.2 66 33 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Scope Management - WBS WBS Levels : The Top most Level is the Name of the Project Level 1 Can be Phase or Deliverable or Sub-Projects Lowest Level – known as Work Package Decomposition done till level where possible to allocate the work, estimate the time and cost and manage and control the work WBS developed using Top-down approach, Bottom-up approach or both Work not reflected in WBS NOT part of project 67 © 2014 CEPM Scope Management - WBS Work Packages Work package is further broken down into smaller activities for the project’s network schedule Lowest level in the WBS – work assigned and controlled at this level A single owner responsible to see work is completed. Can own many work packages Should have scheduled start & finish dates A time phased budget assigned to it 68 34 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Scope Management - WBS Some key advantages of using a WBS WBS Key tool to PLAN and CONTROL the project Helps to assign work and track project progress Basis for making network schedule and bar charts Basis for budget, schedule and resources data required for determining the earned value criteria for the project Provides common understanding and clarity of work and the total project among all the team members and other stakeholders 69 © 2014 CEPM Scope Management - WBS Some key advantages of using a WBS Identifies project's key milestones & deliverables Basis for developing the Organizational, Risk, Communication, Cost Breakdown structures and Responsibility Assignment Matrix Work package assignment to the right person/team members Risk identification and management can be done more effectively Using lowest level of WBS an accurate bottom- up cost estimation can be done 70 35 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Each WBS dictionary entry generally includes following details about the Work Package : • Code of account identifier • Description of work • Responsible organization /department/Unit • Quality requirements • Technical information relevant to task performance • A list of related schedule activities • Resource requirements • Cost estimate Scope Management - WBS 71 ©2014 CEPM Scope Baseline The scope baseline consists of the: The project scope undergoes progressive elaboration 1. Scope Statement 2. WBS 3. WBS Dictionary Build Foundation Earth Work Base Preparation Scope Statement WBS Dictionary 72 36 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Time Management To complete the project on time a schedule of the project work must be fully planned in detail 73 © 2014 CEPM A project schedule developed of total work required to be done to plan and control the time The PM uses a formal change control process to control any changes in the schedule Time Buffers/Reserve/Contingency kept in schedule to meet unanticipated delay Work packages are further broken down to activities that are used to estimate, schedule, assign, implement and control project work Time Management 74 37 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Decompose the work packages into lists of activities to be performed Sequence the activities based on logical relationships Identify & estimate all resource requirements for each activity – type & quantity Estimate activity durations using appropriate estimating technique. Consider resource constraints Develop and analyze the project’s network schedule Network Schedule To develop the project network schedule: 75 © 2014 CEPM Order Cable Deliver Cable at site Lay Cable Dig Trench at site Start Test Conne ctivity “ Laying underground Cable” Work Package consists of 5 activities 2d 1d 5d 7d 7d Finish 76 38 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Critical Path Method (CPM) • CPM is a project scheduling method that helps to determine the Early Start, Early Finish, Late Start, Late Finish for individual tasks. • The Critical Path determines the earliest possible completion date of the project Time Management 77 ©2014 CEPM Activity Logical Relationships 3 types of logical relationships possible: • Discretionary or ‘soft logic’ – based on experience or best practices • External – based on outside factors e.g. political, govt. rules, other projects • Mandatory or ‘hard’ logic’ – work requires a specific sequence Activity Relationships 78 39 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM The Four Types of activity Interrelationships are: Activity Relationships B A B B Finish – Start (FS) Start – Finish (SF) Start – Start (SS) Finish – Finish (FF) A A A B 79 ©2014 CEPM LEAD: A modification of the logical relationship that accelerates the successor task. LAG: A modification in the logical relationship that causes the successor task to be delayed. A B Days Activity Relationships B A Days In a FS relationship B has a Lead of 1 day There are Two Modifiers: In a FS relationship B has Lag of 1 day 80 40 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM ARROW DIAGRAMMING METHOD (ADM) also called ACTIVITY On ARROW (AOA) Start C D E F Finish 1 2 4 6 7 B A 5 3 8 Dummy Project Networks 81 © 2014 CEPM ARROW DIAGRAMMING METHOD (ADM) Arrows represent the Activity Nodes (Event) represent the activity completion ADM allows only Finish-to-Start dependencies Dummy activities i.e. dotted arrows used to show logical dependency Dummy activities consume NO Time or Resources Project Networks 82 41 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM PRECEDENCE DIAGRAMMING METHOD (PDM) also called ACTIVITY ON NODE (AON) Start A B D E C F Finish Project Networks 83 © 2014 CEPM PRECEDENCE DIAGRAMMING METHOD (PDM) also called ACTIVITY ON NODE (AON) Node represents the Activity Arrow used to show logical dependency Allows use of all 4 logical dependencies Project Networks 84 42 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Early Start The earliest time a task can start based on the network logic and schedule constraints. Early Finish The earliest time a task can finish based on the network logic and schedule constraints. Project Networks Forward Pass Late Start The latest time by which a task can begin without violating a schedule constraint / project end date. Late Finish The latest time a task can be completed without violating a schedule constraint or the project end date. Backward Pass 85 ©2014 CEPM FLOAT / TOTAL FLOAT Length of time a non-critical task can be delayed or extended without affecting the project end date. Is measure of time flexibility available in performance of an Activity For an activity: FLOAT =LF - EF or LS - ES Project Networks ES EF LS LF A 6 9 16 13 Activity A has a Float of 7 days 86 43 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM FREE FLOAT Length of time a non-critical task can be delayed or extended without affecting earliest start date of any subsequent activity and the project end date. Project Networks ES EF LS LF A ES EF LS LF B ES EF LS LF C 3 6 6 9 16 13 13 10 13 11 3 5 Activity C has a Free Float of 1 day FREE FLOAT of Activity =ES J - EF I J =Succeeding Activity I=Preceding Activity 87 ©2014 CEPM Exercise: Critical Path Method BB CC Start Start Finish Finish EE AA DD FF ES ES EF EF LS LS LF LF AA 33 77 44 55 22 88 88 D F 44 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Exercise: Critical Path Method(CPM) ES ES EF EF AA ES ES EF EF BB ES ES EF EF ES ES EE EF EF ES ES EF EF 33 77 44 55 22 88 ES ES CC DD FF EF EF Backward Pass LF LF LS LS EF EF LF LF LS LS LF LF LS LS ES ES EF EF ES ES LF LF LS LS Please find out all the ES,EF,LS,LF=? Forward Pass 89 ©2014 CEPM Exercise: Critical Path Method(CPM) 00 33 AA 33 10 10 BB 10 10 14 14 33 EE 55 55 13 13 33 77 44 55 22 88 14 14 CC DD FF 19 19 Forward Pass ?? 90 45 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Exercise: Critical Path Method(CPM) 00 33 AA 33 10 10 BB 10 10 14 14 33 EE 55 55 13 13 33 77 44 55 22 88 14 14 CC DD FF 19 19 Backward Pass 19 19 14 14 14 14 14 14 10 10 10 10 33 66 66 ?? 44 33 00 91 ©2014 CEPM Exercise: Critical Path Method(CPM) 00 33 AA 33 10 10 BB 10 10 14 14 33 EE 55 55 13 13 33 77 44 55 22 88 14 14 CC DD FF 19 19 19 19 14 14 14 14 14 14 10 10 10 10 33 66 66 44 33 00 TF=0 TF=0 TF=0 TF=0 TF=1 TF=1 Critical Path is: 92 46 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM THE CRITICAL PATH Is: The Longest path in the network Has zero float Can have more than one Critical Path Critical path can change through project Negative float in critical path shows project is behind schedule Critical Path 93 © 2014 CEPM Show summary level /activity level activities against time, drawn to a common time scale Drawback – Bar charts do not show activity dependencies Gantt / Bar Charts Bar / Gantt Charts 94 47 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Linked Bar / Gantt Charts The dependencies between activities is shown by arrows and the floats are depicted by single lines drawn after the bar Time Management 95 ©2014 CEPM Gantt/ Bar charts commonly used as: •Easy to draw, read and understand •Provide a clear picture of the project status •Summary of ten's of activities can be depicted by one bar •Easily view the planned time schedule versus the progress at a glance (% Completion) •Excellent tool for management reporting of project progress Gantt / Bar Charts 96 48 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Mapping Resources - Histogram Vertical bars used to display total resource allocation time wise Helps to plan and allocate resources 97 © 2014 CEPM Fast Tracking: Overlap work normally done sequentially e.g. order equipment before design finalized Critical Path activities are carried out in parallel to accelerate the project end date Fast tracking requires much more management control and co-ordination Fast Tracking increases RISK Fast Tracking increases Communication Fast Tracking 98 49 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Crashing: Extra resources added to Critical Path activities to reduce their duration Activities that will cost minimum to crash should be selected first Use more overtime / faster worked materials Costs likely to increase Crashing possible only up to a point – law of Diminishing Returns Crashing 99 © 2014 CEPM PERT Program Evaluation and Review technique (PERT) Also known as 3 Time estimates Used for time and cost estimating when it is difficult to arrive at an estimate due to lack of knowledge or experience Arrives at an estimate using a weighted average to reduce the risk Formula for PERT is: {Optimistic + (4 x Most likely) + Pessimistic} / 6 Standard deviation SD = (P-O)/6 100 50 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Standard Deviation Step 1 – Calculate PERT duration and SD for each activity Step 2 - Calculate Variance of each activity separately. Variance is {(P - O) / 6} 2 i.e. the Variance is the standard deviation squared. Step 3 - Add the Variances for all activities in critical path Step 4 - Take the square root of the total of the variances (calculated in step 3) Steps to calculate SD for the critical path Standard Deviation is a statistical tool used to measure variability in the data. Closer the data examples are to the mean, the smaller is the SD 101 ©2014 CEPM Application of PERT 102 The PERT duration is the Mean. In above example, the PERT duration (Mean) for Activity 1 is 30 days, for Activity 2 it is 116 days and for Activity 3 it is 52 days. There are 3 activities in the critical path with following data Activity Optimistic Most Likely Pessimistic PERT Duration SD Variance 1 20 30 40 30 3.3 10.9 2 70 120 146 116 12.6 158.8 3 40 50 72 52 5.3 28.1 51 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Standard Normal Distribution Mean +/- 1 SD =68.2 % Mean +/- 2 SD =95.4 % Mean +/- 3 SD =99.7 % 103 ©2014 CEPM Cost is the third leg of the Triple Constraints, and is a key aspect in planning, managing and controlling the project Cost Management 104 52 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Type of Costs Costs can be looked at in different ways: Direct costs Costs directly attributable to a project , product and job e.g. labour, material, plant & equipment, contractor Indirect costs Costs associated with the enterprise as a whole e.g. taxes, licenses, administrative salaries, Overhead & administration, training, utilities 105 © 2014 CEPM Estimating Techniques Analogous estimating technique Generally used in Initial / Conceptual phase of PLC when minimum information available Estimate arrived at by comparing proposed project with a similar project that was done in past Type of estimate prepared is known as Rough Order of Magnitude (ROM) Is also called top-down estimate 106 53 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Estimating Techniques Parametric estimating technique Uses project characteristics in a mathematical model (e.g. Unit Rate) to calculate an estimate for activity parameters Used for top down and bottom up estimates Common for construction, software Parametric models are used to estimate how much the product (or project) will cost based on physical attributes e.g. weight, volume, power, lines of code, price per sq. foot 107 © 2014 CEPM Estimating Techniques Bottom up estimating technique A detailed estimate built up from the knowledge of the design of the system Uses the WBS work packages details. Performed in the Planning Phase of the PLC. Most time consuming method but also most accurate estimate Resources needed first estimated and are then converted into monetary terms. Type of estimate prepared is known as Definitive Estimate. 108 54 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM 6. Cost baseline 4. Project 3. Control account 2. Work package 1. Activities 137000 7000 130000 10000 120000 50000 30000 70000 20000 10000 10000 10000 8. Cost budget 7. Management reserve 5. Contingency reserve Bottom-up estimating 109 ©2014 CEPM Type of Estimates • Rough Order of Magnitude (ROM) – is in a range of -30% to +50% from the expected or actual value; • Budget estimate – is in a range of -15% to +30% from the expected or actual value; • Definitive estimate – is in a range of -5% to +15% from the expected or actual value. (Range of accuracy is as per American Association of Cost Engineers (AACE)) Definitive estimates are provided at the end of the planning phase, or early in the execution phase, when the level of detail in the plan allows for greater accuracy in estimating costs. ROM estimate might be used during Project Inception when only high level information is available Budget Estimates are used for Bid, Proposal, Contract Change orders and not for Project Control 110 55 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Cost Budgeting Budgeting Costs Costs are allocated to schedule acti vities or work packages A time phased budget created for costs by aligning costs with the project schedule A cost baseline is established to measure the project’s performance 111 © 2014 CEPM Cost Baseline Cost Baseline is the time phased budget for the project. Is used to measure, monitor and control project’s overall cost performance Is the total estimated cost for project Shown as an ‘S’ curve Large projects can have different cost baselines for the project e.g. internal labour costs, contractor labour costs, material costs 112 56 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Cost Reserves A monetary provision kept for mitigating cost and/or schedule risks Contingency Reserve Management Reserves Budget kept for unpredictable parts of project - "unknown unknowns." Use of the management reserve generally requires a baseline change. Estimated costs used at PM’s discretion to deal with anticipated, but not certain, events. These events are "known unknowns" and are part of the project scope and cost baselines." Reserves 113 ©2014 CEPM Control Account and Chart of Account • Control Account – Are selected components of the WBS that are used for management control. The Scope, budget, schedule and actual cost are integrated at this level to measure work performance using Earned Value methods. Are kept above the Work Package level. Each Control account can contain more than one WP but each work package should be included only in one CA. • Chart of Account - Any numbering System used to Monitor Project Cost by category (e.g. Material, Equipment, Labor ). It is based organization’s Chart of Accounts. 114 57 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM EVMS measures project performance by integrating project scope, cost and schedule measures concurrently enabling a holistic view of project performance and progress Earned Value represents the value of work accomplished in terms of financial worth and is used to measure the performance of the project. Work is represented in terms of a cost based structure. Costs can be in Money or Man-Hours Anintegrated baseline is formed against which performance is measured. EARNED VALUE MANAGEMENT SYSTEM 115 © 2014 CEPM EVMS Key parameters used to represent physical progress achieved on the project in monetary units are: Planned Value (PV): formerly known as Budgeted Cost of Work Scheduled (BCWS). PV = BAC X % of Planned Work Earned Value (EV): formerly known as Budgeted Cost of Work Performed (BCWP). EV = PV x % of Actual Work done Actual Cost (AC) formerly known as Actual Cost of Work Performed (ACWP) Budget At Completi on (BAC) = total Budget for work planned (sum of all PV) 116 58 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM EVMS Variances Schedule Variance ( SV) = EV – PV Cost Variance ( CV) = EV - AC +ve is good performance 0 is on target -ve is poor performance 117 © 2014 CEPM EVMS Performance Indices CPI (Cost Performance Index i.e. cost efficiency) = EV / AC SPI (Schedule Performance Index i.e. schedule efficiency) = EV / PV CPI > 1 shows project is under budget SPI > 1 shows project is ahead of schedule >1 is good performance =1 is on target <1 is poor performance 118 59 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM EVMS EAC =BAC/CPI to-date or =AC +(BAC – EV) CPI New or =AC +ETC New EAC (Estimate at Completion) EAC forecasts the revised budget for the total project or an activity based on the project’s current performance or a new assumed performance in future. VAC (Variance at Completion) = BAC –EAC 119 ©2014 CEPM EVMS To forecast new completion time if future performance expected to be different: New Duration =Current month +[(Delay +Remaining months) / SPI Assumed ] To forecast new completion time based on current performance: New Duration =Original Duration / SPI to-date 120 60 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Cost EARNED VALUE MANAGEMENT THROUGH S-CURVE EV or BCWP PV or BCWS AC or ACWP SV CV Cost Progress Review BAC Slippage Time 121 ©2014 CEPM CPI SPI 2 1.0 .5 0 1.5 1.0 .5 1.5 2 Under Budget & Behind Schedule Under Budget & Ahead of Schedule Over Budget & Ahead of schedule Over Budget & Behind Schedule Project Status Determination 122 61 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Scope, Time, Cost and Quality SCOPE SCOPE QUALITY QUALITY Quality Management 123 ©2014 CEPM ” Quality is “the totality of characteristics of an entity that bear on its ability to satisfy stated or implied needs” - ISO “Degree to which a set of inherent characteristics fulfill requirements” - American Society for Quality Project Quality What is Quality? 124 62 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Quality Planning Quality Assurance Quality Control Quality Management QUALITY 125 Quality Management has following three processes : ©2014 CEPM Define Quality Standard Are we following the right processes ? Quality Policy Quality Requirement Statutory Requirement What Actions/Process/ Procedures ? Do we need to modify processes ? NO YES Defect Repair/Rework Quality Planning Quality Assurance Feedback to QP and QA End Results complying with Standards ? Quality Control Quality Management 126 63 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Quality Planning: Identifies & Determines which quality standards are applicable to project Quality Planning Preparation, checking and recording of actions necessary to achieve the standard of the product or service that is required by the customer and law Is driven by company’s quality poli cy 127 © 2014 CEPM The set of processes and procedures that demonstrate that the work is being done according to the quality plan and will satisfy the relevant quality standards Quality Assurance Quality Assurance is: 128 64 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM • Pre planned Audits and Reviews used to check compliance that all procedures are being met as planned Quality Assurance QA ensures compliance of the process not the product result •Performed by QA department or line organization personnel or separate 3 rd party organization 129 ©2014 CEPM Processes for planning & monitoring specific project results to verify if they comply with relevant quality standards, and identifying ways to eliminate causes of unsatisfactory results Quality Control Quality Control 130 65 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Broken into three main categories: 1. Prevention costs e.g. training, equipment, maintenance 2. Appraisal costs e.g. inspections, audits, testing Cost of Quality 3. Failure costs •Internal failure costs – before leaving organization e.g. rework, scrap •External failure costs – customer determines their requirements not satisfied e.g. liabilities, warranty work Cost of conformance Cost of nonconformance 131 © 2014 CEPM Total Quality Management (TQM) Total Quality Management TQM) TQM is an approach used to implement quality improvement programme involving everyone across the organization Get ideas from employees Environment of participative leadership Improve the customer service Benchmark major activities to improve Reduce cycle time 132 66 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Quality Gurus Deming Juran Crosby Key Quality Gurus who have shaped the Quality movement are: 133 © 2014 CEPM Quality Gurus – W. Edwards Deming Deming’s Plan-Do-Check-Act (PDCA) cycle for continuous improvement Plan - see how to improve present practices Do - implement improvement plan on small scale Check - test to check got desired results or not Act - implement corrective actions needed in plan Management commitment essential 85%of meeting quality is management responsibility 134 67 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM J uran advocated Three key concepts 1. Fitness for Use : • Availability: reliability (i.e., frequency of repairs) and maintainability (i.e. speed or ease of repair). • Safety: The potential hazards of product use • Field use: This refers to the way the product will be used by the customer 2. J uran Trilogy : Quality Improvement , Quality Planning and Quality Control 3. Cost of Quality 135 Quality Gurus – J oseph M J uran ©2014 CEPM Crosby developed his Four Absolutes of Quality: • Quality means conformance to requirements. •Quality comes from prevention, not from inspection. •Quality means that the performance standard is "zero defects." •Quality is measured by the cost of nonconformance. Crosby found that the cost of not doing things right the first time could be appreciable. 136 Quality Gurus – Philip B. Crosby 68 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM • Meet customer needs through evaluation, defining and managing of their expectations More Quality Concepts Customer Satisfaction Quality & Grade • Grade is the level or functionality of the product or service • Quality is achieved by meeting the stated requirements • Project aims to satisfy customer’s quality expectations 137 ©2014 CEPM • Goal is to improve processes to avoid all defects • Management to establish a defect free environment Quality Concepts Zero Defects Prevention vs. Inspection • Cheaper to do things correctly at the first time. • Rework after removing defects after inspection more costly 138 69 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM • Cause and Effect Diagrams • Pareto Diagram • Control Chart • Histogram • Sampling • Benchmarking • Checklist • Flowchart 139 Key Quality Control Tools Quality Tools & Techniques ©2014 CEPM Cause & Effect Diagram (Fishbone/Ishikawa Diagram) • Breaks problems down for analysis • Graphical technique that helps team group ideas and identify the causes of a problem • Shows the relationships among different variables and the effect (problem) Quality Tools & Techniques 140 70 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Example of Cause and Effect Diagram 141 ©2014 CEPM Example of Cause and Effect Diagram 142 Fish Bone Diagram for Hotel Industry 71 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Pareto Chart • Histogram ranking no. of defects in order of frequency or importance Quality Tools & Techniques • 80% problems are due to 20% reasons – 80/20 rule 143 ©2014 CEPM Pareto Chart – Late for office 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 168.0 152.2 134.4 117.6 100.8 84.0 67.2 50.4 33.6 16.8 0.0 Traffic Children Transpor tation Parents Overslept Emergency Quality Tools & Techniques 144 72 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Left hand vertical axis representing the unit of comparison selected e.g. frequency, cost, time Horizontal axis representing different categories of data from max (L) to min. (R) Right hand axis represents the cumulative percent from 0% to 100% Pareto Chart The chart drawn using 3 axis: 145 © 2014 CEPM Used to decide whether the product or service is “in control”i.e. within a specified, acceptable range Graphically displays results of a process Does not provide causes for deviations or solutions Control Chart 0 4 Mean 8 Rule of Seven UCL LCL Out of Control ± 3 ± 2 ± 1 A Control Chart Process USL LSL 146 73 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM • Rule of Seven: When several successive points line up on one side of the central line, this pattern is called a RUN • As a rule of thumb, if the RUN has a length of seven points, there is an abnormality in the process. Quality Tools & Techniques 147 ©2014 CEPM Quality Tools & Techniques Common causes: • This source of random variation is always present in any process. • It is that part of the variability inherent in the process itself. The cause of this variation can be corrected only by a management decision to change the system. Special causes: • This variation can be controlled at the local or operational level. • Special causes are indicated by a point on the control chart that is beyond the control limit or by a persistent trend approaching the control limit. Control Chart 148 74 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Histogram Histogram is a chart with columns. This represents the distribution by mean. If the histogram is normal, the graph takes the shape of a bell curve. If it is not normal, it may take different shapes based on the condition of the distribution. 149 © 2014 CEPM Sampling Inspection done to a sample rather than entire populationdetermine the level of performance as per a predetermined standard. Includes measuring, examining and testing Quality Tools & Techniques Benchmarking Used for process and product improvement Can be done within organization or with other organizations which have similar processes Checklists Structured list of actions. Simple but very useful Show relation between different components of a system. Are excellent visual tools Flow charts 150 75 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Risk Management 151 ©2014 CEPM Risks effect on A risk is any uncertain event that may have a positive or a negative effect on the goals and objectives of the project if it occurs Risk can also be described as ‘the product of the probability of an event occurring times its impact if it did.’ 152 76 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Risk Categories Internal risks – controlled to some extent by project manager e.g. •Project schedule •Manpower •Technology used •Accuracy of estimates External risks – can not be controlled by PM e.g. •Gov. rules •Inflati on •Natural calamities 153 © 2014 CEPM Risk Categories Organizational risks •Fund availability •Resource utilization •Schedule expectations •Project priority Project Management risks •Poor use of PM techniques •Manpower allocation inexperienced 154 77 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Risk Management Processes Most of these processes are updated throughout the project life cycle Develop a Risk Management Plan Prepare a Risk Register Prioritize the Risks Probabilistic Treatment of Risks Develop Risk Responses Assess Risks Continuously Identify all possible Risks © 2014 CEPM Risk Identification Tools • Documentation Reviews • Brainstorming • Interviews • Delphi technique • SWOT analysis • Root cause identi fication Information gathering techniques Other techniques • Checklists • Assumption analysis • Flowcharts • Cause-and-effect diagram • Influence diagram 156 78 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Documentation Review • Contract Document • Work Breakdown Structure (WBS) – key tool • Product description • Scope statement • Project management plan, Network schedule • Risk management plan • Industry data • Historical information Review project documents e.g. 157 ©2014 CEPM Brainstorming •Use a experienced facilitator •List all ideas – all are good •Use WBS and risk categories for identification •Involve team members, other stakeholders •What is said important – be non critical Brainstorming –a popular technique 158 79 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Delphi Technique • Facilitator sends participants a questionnaire • Response collated and circulated few times • Less bias of other participants • Can be done remotely e.g. through E-mail Similar to brainstorming but participants are anonymous 159 ©2014 CEPM SWOT Analysis Looks at the project’s: • Strengths – Experienced project team • Weaknesses – Lack of Processes • Opportunities – Will prove credibility if done successfully • Threats – New Technology Strengths and Weaknesses are internal Opportunities and Threats are external 160 80 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Assumption Analysis • Assumptions about future events like availability of equipment, resources etc. should be formally recorded in a log. • Likelihood of risks in the project increases when the assumptions turn out to be erroneous or false. • It is important to properly review the assumptions made by analyzing following two aspects: The sensitivity (Impact) of the assumption is assessed qualitatively on a scale such as crucial, vital, important and unimportant. The stability (Probability) of the assumption checks how likely it is that the assumption will prove to be wrong or false. 161 © 2014 CEPM Risk Register Records the identified risks The risk owners for each risk and responsibility Results of Qualitative and Quantitative assessment Risk responses selected Contingencies and Fall back plans Is a structured log that maintains summary of all identifi ed risks that can affect the project along with relevant information to manage the risks Microsoft Office Excel Worksheet 162 81 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Risk Analysis Qualitative Risk analysis Quantitative Risk analysis A qualitative risk assessment is carried out to prioritize risks A risk’s Probability (P) of occurrence and Impact (I) is combined and assessed Should always be done for all projects Risk probabi lity assessed using speci fic values Numerically analyses effect of identified risks on project objectives More rigorous Optional analysis 163 © 2014 CEPM Risk Probability Impact Matrix Subj ective assessment done separately of a Risk’s Probabil ity and it’s Impact on project obj ectives Risk score then assigned to each risk based on both Probabil ity & Impact (Probabil ity x Impact) Risks rated and ranked in order of importance Overall risk ratings prioriti ze the risks for project 164 82 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Probability Impact Matrix © 2014 CEPM Quantitative Risk Analysis Tools Decision Trees Expected Monetary Value (EMV) Monte Carlo simulation 166 83 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Quantitative Risk Analysis 167 Decision Trees © 2014 CEPM Quantitative Risk Analysis Expected Monetary Value Analysis (EMV) To calculate the average outcome in Monetary Units of scenarios that may or may not occur . Looks at probability and impact. Formula: EMV = Probability x Impact 168 Exampl e : There is 40 % chance of getti ng a purchase order worth $ 100,000 . The EMV = 0.4 x $100,000 = $ 40,000 84 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Perform Quantitative Risk Analysis • Typically used to make decisions on risks that are uncertain. Takes multiple scenarios and calculates the level of impact. • Structured using a decision tree diagram. • Solving the diagram will result in an EMV for each alternative. Software Package 25% Probability $90,000 -ve Impact No impact 55% Probability $110,000 –ve Impact No impact Not Fit Fit $197,500=(0.25 x 90000+0.75 x 0+$175,000) Not Fit Fit $210,500=(0.55x110000+0.45x0+$150,000) $22,500 $60,500 BUY $175,000 MAKE $ 150,000 Exampl e Application of EMV in Decision Tree Analysis 169 © 2014 CEPM Monte Carlo Simulation Monte Carlo simulation used to show a large number of possible project outcomes. Gives a complete picture and ‘what-if ’ scenarios Project ‘performed’ many times using di fferent durations for activities Provides a statisti cal distribution of the results Correlation between different activities and activities very crucial for the project’s duration are highlighted Two important outputs are histograms and Cumulative probability charts or ‘S’ curves 170 85 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Monte Carlo Simulation Project Simulation 50 160 275 300 120 70 25 0 50 100 150 200 250 300 350 55 65 75 85 95 105 115 Project Duration N o . C o m p l e t e d Frequency 171 ©2014 CEPM Probability of Completing on Time 0 0.2 0.4 0.6 0.8 1 1.2 60 70 80 90 100 110 120 P r o b a b i l i t y Days to Complete Project Simulation Probility to complete 172 86 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Risk Response Planning Identify a responsible owner for the risk Select most appropriate response method for the risk – cost effective, timely, realistic Keep track and record in a Risk Register Develop proactive action plans to deal with risks – reduce threats, enhance opportunities 173 © 2014 CEPM Risk Response Strategies Risk Response Strategy Effect of Response Threats or Negative risks Avoid Remove root cause. Eliminate from project ” Transfer Third party financially responsible ” Mitigate Reduce Probability or Impact or Both Opportunities or positive risks Exploit Remove uncertainty to use opportunity ” Share Make third party owner- better equipped ” Enhance Increase positive Impact or Probability or both Threats & Opportunities Accept Accept the risk. Keep a contingency reserve Unclear but threat more likely Contingent Response Execute if required 174 87 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Other Risk Response Strategies • A Fall Back Plan is developed by the team, if response strategy is found to be not effective. (Plan B if Plan A fails) • Secondary Risk is the risk arises due to implementation of original risk response plan. Team shall review any possibility of secondary risk while finalizing risk response strategy. • Residual Risk is the risk that will remain even after implementation of risk response strategy (No 100% Solution) (Insurance will cover hospital charges for an accident but what about the disability?) • Risk Trigger is an indication that risk is imminent and risk owner will Initiate response plan (Contingency). EVM calculations shows low SPI indicating possible project delay. • Workaround – Finding a way out of a situation when an unidentified risk has already occurred. Too many workarounds (“fire fighting”) shows lack of Risk Management. 175 ©2014 CEPM HR Management 176 88 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Organization Structures Three main types of organization structures: Function or Line – most common. Is traditi onal hierarchical structure. Matrix – weak matrix, balanced matrix and strong matrix. PM’s authority increases from Weak to Strong matrix Project or Task Force – geared for projects Project’s organizational structure will impact the roles and responsibilities as well as the availability of project resources 177 © 2014 CEPM Functional Organization Grouped by function or department Each employee has clear boss Interdepartmental communication via Functional head Staff & Project lead assigned part time to project 178 Research Employee 1 Production Employee Marketing Employee Finance Employee CEO Research & Development Production Marketing Accounts & Accounts & Finance Research Employee 2 Research Employee 3 Production Employee Production Employee Marketing Employee Marketing Employee Finance Employee Finance Employee 89 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Advantages Best for routine operations, occasional projects Better technical control Broad manpower base, flexibility Communication channels good Easier budget, cost control Better functional support / technical base Functional Structures 179 © 2014 CEPM Disadvantages No direct responsibi lity for project Cumbersome coordination between departments Slow customer response / focus Stronger group wins Less innovation Functional Structures 180 90 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Matrix Organization Staff assigned to project report to both Functional and Project Manager PM assigned full time to project PM and Functional Managers share decision making and authority Research Employee 1 Production Employee 1 Marketing Employee 1 Project Manager CEO Research & Development Production Marketing PMO Research Employee 2 Research Employee 3 Production Employee 2 Production Employee 3 Marketing Employee 2 Marketing Employee 3 Project Manager Project Manager 181 © 2014 CEPM Advantages PM has good control and authority Better utilization of resources Project staff have a ‘home’ so their career path secure after project completed Good for doing both projects & operations Matrix Structures PM can commit company’s resources Strong technical base available to projects 182 91 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Disadvantages Matrix Structures Dual reporting system – two bosses PM and Functional manager Conflicting / changing priorities between PM and Functional manager Multidi mensional work & information flow Structure more difficult to implement Needs more top management involvement initially 183 © 2014 CEPM Projectized Organization Projects main work of organization and structure geared for projects All staff report to PM PM has complete authority and independence Project work given maximum importance 184 Team Member Team Member Team Member CEO Project Manager 1 Project Manager 2 Project Manager 3 Team Member Team Member Team Member Team Member Team Member Team Member 92 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Advantages PM has complete functional authority over project All resources available to PM as and when needed Good communication channels Fast reaction time Projectized Organization 185 © 2014 CEPM Duplication of effort, resources, facil ities People retained unnecessarily after project as they may not have another project Technical base less strong as no line department looking out to maintain skills Slower career growth Projectized Organization Disadvantages Technical skill and knowledge remains in same group 186 93 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Roles and Responsibilities 187 © 2014 CEPM Responsibility Assignment Matrix Responsibility Assignment Matrix (RAM) To show project Roles & Responsibilities •Who will do what work •Level of responsibility • Rows indicate the activities • Columns identify the positions, or names WBS & OBS( Organization Breakdown Structure) combined to develop the RAM. WBS shown down left hand side and resources from OBS across the top of the matrix. Weakness - Responsibil ity Matrix does NOT show when work will be done, how much time wil l be taken nor how peopl e wil l interact 188 94 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Responsibility Assignment Matrix (RAM) 189 Responsibility Assignment Matrix using a RACI chart Persons Activity Define Ayan Develop Test Design R = Responsible A = Accountable C = Consult I = Inform Druv Mira Krish Sara A A A A R R R R I I I I I I I I C C C C © 2014 CEPM Developingthe Project Management Plan Delivering the project on time, within budget and meeting required specifications Managing stakeholder expectations Integrating, controlling & coordinating the project Developing and motivating team, resolving conflicts Monitoring & controlling all aspects of project PM - Role & Responsibilities PM is overall responsibl e for the project and it’s day-to-day management such as: Communicating with all stakeholders 190 95 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Responsible for defining the investment aims of the project and achievingthe business benefits Arranges funding for the project Sponsor - Role & Responsibilities Sponsor Authorizes the Project. Authorizes PM to use resources. Is the primary risk taker in the project Links the project with the on going business Provides top management commitment to project Appoints the Project Manager Determine the priority between time, cost, quality 191 © 2014 CEPM Maintain the harmony and unity of the team Perform the work they are assi gned responsibly Be open and forthright Be innovative in getti ng the work done Discuss any problems before they get out of control Team members Actually perform the work. They should: 192 96 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Team Performance 193 © 2014 CEPM Group of individuals that share common: What is a team? Objective and identity Values Norms Standard of behavior Commitment Loyalty Diversity Team Performance 194 97 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Forming Storming Team Formation Stages Team members only moderately effective as they lack a common aim, are hesitant and unsure of each other PM’s role (Directing) - give direction, build common grounds, help members to understand each other better . (high direction , low support) Differences and hostilities surface between team members leading to arguments, different opinions, personality conflicts, formation of groups /sub groups PM’s role (Coaching) - motivate and educate team members, clarify project goals and manage team conflicts .(high Direction ,high Support) 195 ©2014 CEPM Norming Team Formation Stages Team members start developing an identity and set of norms and values. Better understanding and communication among team. Issues become more important than individuals PM’s role (Supporting) - resolve issues that came up, define and assigning team roles and responsibilities (Low Direction but high Support to bolster confidence and motivation) 196 98 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Mourning / Adjourning Team Formation Stages Performing Team becomes high performing team - members understand and appreciate each other. Team works effectively as a resourceful, focused, cohesive force with a united aim. Problems tackled more confidently and innovatively PM’s role (Delegating) - maintain performance by co- coordinating and controlling the work, appraise performance, delegate work, acknowledge good work. (Low Direction & Low Support ) Team disbanded - some persons happy some sad 197 © 2014 CEPM Good Team Attributes Imaginative Trust Respect Innovative Clear roles Supportive Adaptive Result oriented Committed Team Performance Hiding facts Personal agendas No clear direction Lot of rework Blame culture Self centred Unresolved conflicts Poor team attributes 198 99 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM For effective team PM should: Clarify individual role and responsibilities Delegate to appropriate person Expect and resolve conflicts at the earliest Encourage diversity Build a team identity Team Formation 199 © 2014 CEPM Managing team conflicts Five main methods to resolve conflicts: Withdrawal Smoothing Compromising Forcing Confrontation Conflict Resolution Techniques 200 100 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Withdrawal / Avoiding Conflict Resolution Techniques • Retreating or withdrawing from an actual or potential disagreement/conflict • No action is taken by the disagreeing parties. Does not solve the problem • PM can use this method for conflicts over trivial issues, to lessen tension or when resolving the conflict could increase other problems 201 ©2014 CEPM Smoothing Conflict Resolution Techniques • Emphasize areas of agreement and play down areas of disagreement • Keeps the atmosphere friendly and less stressful in teambut does not solve problem • PM can use this method to encourage a team member and help him/her to grow by learning from own experience 202 101 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Compromising Conflict Resolution Techniques • This method uses a “give and take attitude” • Both parties need to make some trade offs so neither party can win (Lose-Lose) • Gives some satisfaction to each concerned party – but not ideal solution • PM can use to resolve a conflict in team temporarily to avoid delays in work, or in making concessions when negotiating for contracts 203 ©2014 CEPM Forcing Conflict Resolution Techniques • Uses authority to exert one’s viewpoint at the potential expense of another • PM uses his power and authority to force a solution • Should be used as a last resort as ill feelings are likely to return as a problem • PM can use forcing to make quick decisions in crucial or urgent situations or when he wants a specific solution to be used 204 102 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Confrontation / Problem Solving Conflict Resolution Techniques • The issue kept as focus not the individuals. Affected parties try to resolve their disagreements by directly facing the conflict • Most direct and objective approach that pinpoints the problem • It provides a final solution to the conflict • PM can use confrontation method when team is mature 205 ©2014 CEPM Leadership And Motivation systems 206 103 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Effective characteristics of Project Manager Leader Committed Goal oriented Communicator Supportiveto team Creative Integrator Budget conscious Sees overall picture Independentthinker Decisionmaker Flexible Leadership 207 © 2014 CEPM Leadership styles that a PM can foll ow are: Autocratic - Keeps tight control over staff and dictates what should be done (like a king) Laissez faire - A form of non-management. No one is in charge. Democratic - The project manager consults team members but decides on the best course of action. Bureaucratic - Lots of rules, regulations and procedures. Directive - Specifies what to do and how to do the work and supervises the work closely. Supportive - Encouragement, praise and positive feedback to motivate. Leadership 208 104 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Some key Motivation Theories are: Maslow's Hierarchy of Needs Theory Herzberg’s Two Factor Theory Motivation McGregor's Theory X and Y 209 © 2014 CEPM Developed by Abraham Maslow in 1943 There are five basic human needs that must be fulfilled to motivate peopl e Maslow's Hierarchy of Needs Theory Behaviour of all persons including project team members governed by their personal needs Needs have to be met from lowest level to highest level 210 105 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Physiological needs - air, water, food, shelter, clothing Safety/security needs – Job security, Stability, Freedom from Physical Harm Social needs – Love, Affectionate relationships, Friends, Social status Maslow's Hierarchy of Needs Theory Esteem/recognition needs –Accomplishment, Respect,, Attention, Appreciation, Self worth, Self Actualization – Self-fulfil lment, Growth, Creativity, Learning, Developing potential 211 © 2014 CEPM ‘Hygiene factors’ and ‘Motivators’ Both are independent and affect persons differently Herzberg’s Two Factor Theory In 1960 Frederick Herzberg identified two separate categories of need and motivation Hygiene factors necessary for persons to avoid becoming dissatisfi ed and de-motivated with their job Motivators necessary for persons to be motivated 212 106 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Hygiene factors Herzberg’s Two Factor Theory Motivators •Company policies •Peer, subordinate, superior relationships •Working conditions •Salary •Personal life •Status •Security •Achievement •Recognition •Work content •Responsibility •Professional growth 213 © 2014 CEPM Theory X - average workers are lazy, lack motivation and ambition, will avoid work unless supervised. Managers who believe in this tend to be authoritarian and suspicious. They impose tight organizational structures, rigid rules/policies, and strict supervisory controls because they believe that subordinates lack a sense of responsibility. Theory Y – Workers are self-motivated, creative, imaginative, committed. Managers provide more freedom and the opportunity to participate in planning and decision making. They emphasize opportunities for development and growth. McGregor’s Theory X and Y 214 107 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Communication Management 215 © 2014 CEPM Communication can be: Oral Written Non Verbal (Body language) Communication Effective communication requires: talking writing listening Message Impact on the receiver: 7% words +38% vocal tone +55% non Verbal. Besides vocal tones and facial expressions, gestures, gender, and dress can also infl uence the impact of a verbal message. 216 108 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Communication Requirement Analysis • Complexity of communication channels - A project with “N” number of stakeholders has N(N-1)/2 possible channels of communications • A key component is communication planning is to determine who will communicate with whom and who will receive what information. Communication Technology • As part of communications planning, the project manager should identify all of the required and approved methods of communicating. • Communication modalities include meetings, reports, memos, e-mails etc. Communication 217 ©2014 CEPM Communication Models : • Encode - Translate thoughts or ideas into a language that understood by others • Message and feedback message - The output of encoding Medium - The method used to convey the message • Noise - Anything that interfaces with the transmission and understanding of message (Distance, unfamiliar technology etc) • Decode - To translate message back into meaningful thoughts or ideas Communication Medium Sender Receiver Encode Decode Decode Encode Message Noise Feedback-Message Noise 218 109 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Communication Methods : • Interactive communication - Between two or more parties in multidirectional (phone calls, meetings, interviews). Most effective way. • Push communication - Sending specific information to specific recipients. Examples are letters, memos, e-mails, faxes etc. This ensures that message is sent but will no certainty that it is actually received or understood. (Push the message to recipient) • Pull communication - Used for large volume of information and large audiences. Examples are internet sites, company data bases, e- learning etc. Recipient has to access the communication content (Pull out information) at their own discretion. Communication 219 © 2014 CEPM Project Manager communicates with: Upper management, Sponsor client to ensure conti nued support Team members to solve their confli cts, motivate, train, supervise them, co- ordinate activities Other departments, co-workers, users Direction of Communication 220 110 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM • Amount of information. Provide sufficient information but avoid overload. Follow the principle of KISS (keep it simple and short). • Lack of subject knowledge. Acquire a thorough knowledge of your subject matter, and ascertain what your audience's knowledge level of the subject might be. • Cultural differences. • Organizational hierarchy. Minimize difficulties associated with status and ego in the organization. Create an atmosphere of openness and trust by talking with, rather than down to, people. • Number of links. Reduce the number of transmission links. The more links there are in the chain, the more opportunities there are for distortion to creep into the message. Communication Barriers 221 ©2014 CEPM • Perceptions. Both the sender and the receiver may have their own perceptions about each other's knowledge and skills. • Message competition. Communicate only when you have the total attention of the recipient, otherwise your message will be competing with whatever the other party is preoccupied with at that time, either mentally or physically. Try to minimize noise or other factors contributing to message interference. • Project jargon and terminology. Define the project terminology used in messages. Project team members (collectively) should try to use words in the way the receivers use them. • Selective Listening and Hidden Agenda Communication Barriers 222 111 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Project budget information Schedule Action items Earned Value performance Change requests that are made/accepted Performance reports – variances from EVM Status reports - current standing of the project Reports Some Project Reports Progress reports - accompl ishments of team 223 © 2014 CEPM Procurement Procurement is acquiring of goods and services required for the project from outside the performing organization € £ $ 224 112 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM A Contract must have following 5 elements : • Offer – proposal is an offer made by Seller. • Acceptance – agreement by the buyer to the terms . It must be communicated and be mirror image of the Offer. If buyer changes the offer and sends back to seller it is called Counter-offer. • Competent Parties – The contract must be between 2 competent parties who represent separate legal entities. Competency may mean having authority .Internal contracts are not legally enforceable but may be used to mitigate risk. • Mutual Consideration– Something of value that will be exchanged between the parties. • Legality of Purpose– the intent for which the contract is made must be legal. What is a Contract? 225 ©2014 CEPM Procurement Planning 1. Planning for the procurement 2. Identifying prospective sellers 3. Prepare and send Procurement documents e.g. RFP,RFQ to prospective sellers 4. Reviewing the seller responses 5. Selecting the sellers 6. Administering the contract 7. Closing the contract Procurement involves following steps: 226 113 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Procurement Steps Determining what to procure and when to procure The scope of work required in each contract 1. Planning for the procurement A Make-or-Buy analysis to assess if required goods or services can be made in-house or will have to be procured from outside the organization Detailing out the work required to be done by seller - contract statement of work 227 © 2014 CEPM Procurement Steps Identify all the potential sellers of the required procurement Determine and finalize an evaluation criteria for selecting appropriate sellers 2. Identifying Prospective Sellers Compile relevant documents for sellers - bids, offers, proposals (RFP ,RFQ) - work details, - seller evaluation criteria, - response forms, procedures - proposed contract terms and conditi ons 3. Send Procurement Documents 228 114 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Procurement Steps Responses from prospective sellers are evaluated against the pre-determined criteria An evaluation criteria is finalized for selecting sellers 4. Reviewing the seller responses Seller is selected to fulfill procurement needs after negotiation between buyer and seller 5. Award process i.e. selecting the sellers 229 © 2014 CEPM Procurement Steps •Contract is administered by the buyer for: - changes - project progress - check contractor meeting cost, schedule and quality requirements • Buyer uses EVM , reports, meetings, quality checks, performance reviews and audits for contract administration 6. Administering the Contract 230 115 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Procurement Performance Reviews: A structured review of seller’s progress with respect to procurement statement of work. Identify performance success/failure Inspections & Audits: Conducted during project execution to verify compliance in seller’s process and deliverables. Performance Reporting: Get Information about how effectively the seller is achieving contractual objectives. System to Manage Records: Used to manage contract and procurement documentation and records. Procurement Steps 6.Tools and Techniques for Contract Administration 231 © 2014 CEPM Payment Systems for contractor: - Payments processed by buyer’s account payable system as per contract terms - Payment should be done after certification of satisfactory work delivered by the seller Procurement Steps Administering claims: – Contested Changes (also called claims, disputes or appeals) where buyer and seller cannot reach an agreement on compensation for changes made – Settlement of all claims and disputes through negotiation is preferred method – Otherwise handled as alternative dispute resolution (ADR) procedures established in contract 6.Tools and Techniques for Contract Administration 232 116 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM 6. Tools and Techniques for Contract Administration A Contract Change Control System: Is the process by which contracts can be modified This includes: Paper work Tacking systems Dispute resolution procedures Mutual Consent Approval level Procurement Steps 233 © 2014 CEPM Procurement Steps Get a formal acceptance from buyer Deal with any pending contract issues/claims Update each contract file Record the lessons learned from each contract for future use and learning 7. Closing the Contract Formal contract closeout is necessary to verify that all the work and the contract deliverables are acceptabl e to the buyer 234 117 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Procurement audits Using records management system Negotiated Settlements: In all procurements the final settlement of all outstanding issues, claims, and disputes by negotiations is a primary goal. Whenever settlement cannot be achieved by direct negotiation , some form of alternative dispute resolution (ADR) including mediation or arbitration may be explored . When all else fails, litigation in the courts used - is the least desirable option Procurement Steps 7. Closing the Contract is carried out using: 235 © 2014 CEPM Procurement Audits A structured review done to assess whether procurement processes followed were suitable Audit should cover the entire procurement process including contract administration Procurement areas that can be improved are identifi ed and the process can be improved with lessons learned in future projects. 236 118 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Choosing The Type of Contract Selecting appropriate contract is essential for successful contract performance Type of contract chosen will determine the cost and performance risks placed on the contractor and will impact his performance The amount of monitoring required by buyer wi ll depend on type of contract selected 237 © 2014 CEPM Type of Contracts Fixed Price contracts Cost Reimbursable contracts Time and Material contracts Three broad categories of contracts 238 119 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Type of Contracts Fixed Price (FP) or Lump sum contracts Can have a Fixed Price contract known as Fixed Price Incentive Fee (FPIF) where seller is given an incentive by Buyer for exceeding required performance Seller understands total work required and quotes a price inclusive of his profit margin Maximum risk faced by seller 239 © 2014 CEPM Fixed Price Contracts Fixed Price Incentive Fee (FPIF) Buyer agrees to pay seller a Fixed fee PLUS an incentive / penalty based on performance. Very similar to Cost Plus Incentive Fee except that FPIF has a Ceiling Price or Maximum Payout Fixed Price with Economic Price Adjustment (FP-EPA) Used whenever the seller’s performance period spans a considerable period of years. Has special provision allowing for predefined final adjustments to the contract price due to inflation, changes, or cost increases / decreases) for specific commodities. 240 120 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Type of Contracts Cost Reimbursable contracts Buyer cannot give a detailed CSOW Required when project is uncertain and difficult for contractor to estimate a fixed fair price with sufficient accuracy End result to be achieved is clear but work required to be done not very clear Contractor faces minimum risk – is only required to use his best effort 241 © 2014 CEPM Type of Contracts Cost Reimbursable contracts Cost Plus Percentage of cost contracts (CPPC) - Actual costs incurred are reimbursed to contractor - Contractor fee is paid based on a percentage of the costs that were actually incurred Cost Plus Fixed Fee contracts (CPFF) - All allowable cost actually incurred for performing the work is reimbursed to the contractor - Contractor’s fee is given based on a previously fixed amount 242 121 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Cost Plus Incentive Fee – CPIF contracts The buyer reimburses the seller or contractor their actual cost incurred plus a fee plus an incentive / penalty for good / bad performance. • Both buyer and seller share the cost savings by the contractor. • If cost exceeds, contractor is penalized. • A sharing formula between the Buyer and Seller is decided in contract for awarding of incentive and penalty. • Contractor’s fee is limited by a Maximum Fee and a Minimum Fee 243 ©2014 CEPM • Target Cost: Costs likely to be incurred by contractor in providing the contracted product or service. Basis to measure the final costs incurred by the contractor. • Target Fee: The value of profit contractor expects from the contract. Is generally included in the contract. • Target Price: This is the Target Cost + the Target Fee • Share ratio: A prefixed ratio for sharing the cost savings / penalty between the buyer and contractor • Maximum & Minimum Fees: The maximum & minimum fee that can be made by contractor – used only in CPIF contracts. • Ceiling Price/Price Ceiling: FPIF contracts only. Maximum payout by owner for all actual costs + contractor fee. Contractor to meet all costs above this limit 244 Terminologies in CPIF & FPIF Contracts 122 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM FPIF and CPIF Contracts • Final Price of contract = Actual Cost + Contractor Fee • Contractor Fee = Target Fee + Incentive • Incentive = (Target Cost - Actual Cost) X Seller’s Ratio If Actual Cost is less than the Target Cost then Contractor’s Fee is increased by the Share Ratio If Actual cost is more than the Target Cost then contractor’s Fee is reduced by the share ratio CPIF: Contractor fee governed by Maximum & Mini mum fee. Actual costs full y reimbursed FPIF: Contractor fee + Actual costs governed by Ceiling Price 245 © 2014 CEPM FPIF and CPIF Contract • Final Price = Actual Cost + Target Profit (Fee) + Incentive • Incentive = ( Target Cost – Actual Cost) X Seller’s Ratio • Contractor’s Fee= Target Profit + Incentive In FPIF : Final price =< Ceiling Price In CPIF : Min Fee =< Contractor’s Fee =<Max Fee 246 123 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Type of Contracts Time & Material contracts Fixed rate pai d for services rendered Based on completing a fixed amount of work earlier agreed to by seller and buyer Cost of materials reimbursed to contractor by buyer Seller paid depending on time taken to complete this fixed work 247 © 2014 CEPM Stages of Negotiation • Protocol - Get acquainted, create a collaborative atmosphere. • Probing - Negotiation starts through verbal communication. Non- verbal components such as eye contact, gestures, vocal tones, postures, etc., also become meaningful. Both the parties start to feel each other out. They try to identify weaknesses and areas of shared interest. • Rough bargaining - Know your points and issues and go after them with confidence and assertiveness. • Closure - The issues of cost, schedule and performance are settled during this stage. • Agreement - Reaching an agreement is the final goal of negotiation. During this stage, discussions take place about when and where work will start and how performances will be measured etc. 248 124 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Negotiation • Cooperation, common interests, reliable behaviour and satisfaction of needs are some common factors in any negotiation. • Effective Negotiation relies on Trusting Collaboration between the parties. • Mutual Trust and an atmosphere of Collaboration ensures both relationship is maintained and substantive outcomes are achieved. 249 ©2014 CEPM 250 Integration Management 125 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Change Control Process 251 ©2014 CEPM Change Control Board (CCB) • The board is given the authority to approve or deny change requests as defined by the organization. • The CCB may meet only once a week, once every other week, or even once a month, depending on the project. • When emergencies arise, pre-established procedures allow the project manager to implement the change on the spot. • CCB members may include stakeholders, managers, project team members, and others who may not have any connection to the project at hand. • Some other names for CCB are technical assessment board (TAB), technical review board (TRB) and engineering review board (ERB) Change Control Process 252 126 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Some of the common reasons for Changes : • Customer requests • Events external to the project e.g. a new regulation • Error or omission in defining the scope of the product • Engineering design changes – due to omission, redesign, improvements etc. that may/may not alter project deliverables • Changes that add value to the project e.g. taking advantage of latest technical innovation that was not available earlier • Scope of the project not defined fully • Lack of due diligence / proper planning Change Control 253 ©2014 CEPM Configuration Management Configuration management should be applied throughout the project life cycle. To manage the configuration management the relevant process can be broadly classified into four key steps: Configuration Identification • This step uniquely identifies all the items in the configuration. The rules for numbering the items and sub-items are also set. Configuration Change Control • A system is developed to manage changes in the configuration items identified earlier. ( The approval or rejection of the proposed change is part of change control ) 254 127 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Configuration status accounting • This is done to maintain full traceability of the changes made. A history is kept of all changes made in the configuration item as well as of the current status. Configuration auditing • This is done to ensure what is delivered is same as requested. Auditing ensures conformity is maintained between the specifications and the items in the configuration. • Audit is done on two fronts - to ensure that the designs are same as the ‘as built’ as well as to ensure that the function and performance criteria are met. Configuration Management 255 ©2014 CEPM Integration Ensuring Conformance: During integration phase completed work packages must be checked to ensure their conformance to quality considerations and performance specifications Integration has two components - Project integration and Product integration. • Project integration - outlines the different project management activities to be performed to integrate the project deliverables. • Product integration - discusses the integration of the different components and subcomponents to have a complete product or service. Integration ensures different elements of the project are properly coordinated 256 128 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Balancing project’s competing constraints: Scope, time, cost, quality , resources and risks. Change Management through proper Integrated Change Control Process Configuration Management Updating Project Management Plan , Project Documents and Baselines Manage Variances and Issues through Corrective and Preventive Actions Manage Stakehol ders through proper reporting and communications Properly Close Contract and Project Project Integration 257 © 2014 CEPM Sequence for Product Integration • The product integration sequence provides support in incremental assembly and evaluation of the product components. • Sequencing of components integration can be decided on the basis of some of the following factors: Functionality of the components. Customer’s need or priority Components dependencies Resource availability Technical complexity • Sequence of integration is considered while developing the project management plan and incorporated in project network diagram and consequently into the project schedule. Product Integration 258 129 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Issue Log/Register An Issue Log/Register is an effective communications tool for formally tracking the status and resolution of issues as they arise. • Issues arise from interactions among stakeholders • Actively managing issues is an effective way of managing stakeholders in a controlled environment. • The use of this communication tool encourages constructive discussion, assigns ownership, and demonstrates to stakeholders and team members that issue management is important to the project. An unresolved issue may cause conflict and disagreement that will undermine project performance. 259 ©2014 CEPM S. No Issues Id Issues Descriptions Complexity Scale 1-10 Severity Scale 1-5 Pending Issues (in days) T CSPI 1 Issue 10 Requirement for Graphic User Interface not fully identified & frozen 9 5 23 1035 2 Issue 8 Team member responsible for design left job, new hire not done 6 4 30 720 3 Issue 18 Test equipments being shared with other projects 5 4 15 300 4 Issue 30 Performance issue on graphics display is reported by customer 6 4 4 96 5 Issue 29 Meeting with stakeholders to define quality requirements still open 7 3 4 84 6 Issue 23 Quality audit carried out 3 4 6 72 Issue Register Where T CSPI is the Total Complexity, Severity, Pending Index 260 130 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Problem Solving Problem Solving essential in projects. Steps for Problem Solving includes: Identifying / Defining the probl em Analyzing the probl em Looking at Alternatives – Find all possible solutions Selecting a possibl e solution – Select the one which best suits your goal Implementing selected solution – Take action Evaluating – Find out the effectiveness of the solution 261 © 2014 CEPM Health, Safety, Security & Environment It is important in projects to: Ensure the health, safety and welfare of the work force Control use and storage of dangerous substances Control emissions of offensive substances in the atmosphere Protect other people from danger arising out of activities of persons at work A Health, Safety & Environment Plan should be made all projects and enclosed in the Project Management Plan 262 131 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Health, Safety, Security & Environment Some important laws are the: Factories Act, 1948 Environment (Protection) Act, 2007 for the protection and improvement of the environment. Indian Boilers Act, 1923, which regulates working of boilers and ensures the safety of the plant and workers from the danger of explosions of these vessels. Dock workers (Safety, Health and Welfare) Act, 1986 Mines Act, 1952 Building & Other Construction Workers Act, 1996 263 © 2014 CEPM Occupati onal Health and Safety Administration (OSHA) • Bureau of Indian Standards has formulated an Indian Standard on OH&S management systems. It is called as the IS 18001:2000 Occupational Health and Safety Management Systems. (OHSMS) Environment Management System (EMS) • ISO 14001 is the internationally recognized standard for the environmental management of businesses. It prescribes controls for those activities that have an effect on the environment. These include the use of natural resources, handling and treatment of waste, and energy consumption. Health, Safety, Security & Environment 264 132 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM All three - contractors, suppliers and client work closely to accomplish a successful hand-over and close-out. • The project’s final product, service, or result has to be accepted and the handed over to the organization. • This usually requires a formal sign-off and, in the case of a project performed on contract, definitely requires a formal sign-off or receipt indicating acceptance of the project. • PM must keep handing over requirements through the project to ensure they are all met Deliver and Closeout 265 ©2014 CEPM Scope Verification before Delivery Deliverables to be verified by customer for acceptance Step 1: To verify completed deliverables properly completed and are correct use: • Project. Management Plan as it contains the scope baseline (Scope Statement + WBS + WBS Dictionary) • Requirements Documentation Step 2: Customer should conduct Inspection, Testing, Measurement and Audits to check deliverables Step 3: Deliverables not accepted to be corrected through actions like Rework, Defect Repair, Preventive & Corrective actions. 266 133 © Centre for Excellence in Project Management (P) Ltd, 2014 © 2014 CEPM Project closeout activities covers: Formal Acceptance Documentation of the accepted deliverables Final Project Files , Documents & Records updated All Contract files to be updated and closed Historical Information & Lessons Learned recorded for future learning Releasing Resources Deliver and Closeout 267 © 2014 CEPM Project Files , Documents and Records at closeout may include: • As-built designs/drawings details • Technical /user Manuals for O & M activities • Comparison of final costs/benefits for future projects • Record of technical achievements for future projects • Schedule and cost variance reports • Comparison of resource estimates made and used • Quality reports • Contract/owner complete correspondence • Material reconciliation Deliver and Closeout 268 134 © Centre for Excellence in Project Management (P) Ltd, 2014 ©2014 CEPM Lessons Learned • Lessons learned captures all the things that have been learned by the project manager and the project team members during the life cycle of the project. • Lessons learned become important assets of the organization. They form a bank of information for use by future projects. Making use of lessons learned has always been recommended in almost all the different areas of modern project management. 269 ©2014 CEPM Thanks for being a great audience!!! 270 135 Organised by Centre for Excellence in Project Management (P) Ltd. CL A SS EXERCI SES 136 for Three Day Workshop on leading to the Certificate In Project Management (CIPM) Totality of Project Management 7 - 9 April 2014 Indo German Tool Room Aurangabad for CIPM Class Exercise - Set 1 (Project/program/Operations/PLC) © Centre for Excellence in Project Management (P) Ltd, 2014 137 1 Which of the following is not a project characteristic? a. A temporary endeavour b. Limited availability of resources c. Fixed end date d. Managing repetitive work 2 The term Programme, in the context of project management refers to: a. A large number of projects being executed simultaneously b. A large number of people involved in projects c. A group of projects related to a common objective d. Projects implemented across many locations 3 Which is not an advantage in using project management to manage your project? a. Better risk management b. Improved estimates c. Pro-active monitoring of the project d. More flexibility in the project’s end date 4 What is NOT a common feature between projects and operations? a. Are performed by people b. Have limited resources c. Sustain the existing business d. Need to be properly planned 5 All of the following statements are true except: a. Cost to make changes in the project will increase with time b. Cost to make changes in the project will decrease with time c. Project management uses hard and soft skills d. Project management skills are ideal for managing change 6 A Programme Manager is responsible for: a. Interaction between team members in a project b. Writing the lessons learned report for the project c. Establishing the interdependencies among a number of projects d. Developing the Project Management Plan 7 A project is characterized by: a. Repetitive ongoing work b. A unique and temporary endeavour c. Having a definite beginning and end d. b and c 8 When will uncertainty be highest in the project? a. Depends on the project b. At the end of the project c. At the beginning of the project d. Throughout the project CIPM Class Exercise - Set 1 (Project/program/Operations/PLC) © Centre for Excellence in Project Management (P) Ltd, 2014 138 9 The sequence of phases through which the project progresses is known as: a. The Project Life Cycle b. Project Gates c. Milestone charts d. Critical path of the project network 10 What is NOT true of project phasing? a. It allows for most efficient use of resources b. It splits projects into stages c. The duration of each phase is fixed for all projects d. An end of phase review acts as an evaluation and approval point 11 Project phasing is done to: a. Overlap project work to save time b. For better access of project by team members c. Break down project into more manageable blocks d. Break down the project finances 12 Each project phase will have: a. Some specific deliverables b. Key activities requiring specific type of resources c. Related sequences and types of activities d. All of the above 13 Operations are related with all the following except: a. Repetitive work b. Maintaining the plant c. Regular manufacturing in a car company d. Introducing a new product range 14 The programme manager will normally do all except: a. Focus on long term goals b. Focused on company strategies c. Focused on the project work d. Prioritize use of resources across projects 15 Fill in the blanks from the following: Project………; Programme………; Project Management……..; Operations………. a. Routine b. Temporary c. Common objective d. Structured processes CIPM Class Exercises - Set 2 (Stakeholder/Need Analysis/Business Case/Charter) © Centre for Excellence in Project Management (P) Ltd, 2014 139 1 Which statement best fits a stakeholder definition? a. The contractor, sponsor and project manager b. Anyone who is a part of the project, has interest in it, or is impacted by it c. The customer d. The project team 2 Stakeholders can exert a ___________ or ____________ influence on project. a. Good, bad b. Negative, positive c. Strong, hard d. None of the above 3 A stakeholder analysis should be carried out to do all except: a. Identify the different needs of the stakeholders b. Understand which needs must be met c. Find requirements that can be avoided d. Analyze stakeholder interests and their impact 4 The Business Case addresses all of the following except: a. Business justification for taking up the project b. The network schedule c. Key performance indicators d. Project’s success criteria 5 The Business Case would not consider: a. Social and environmental impacts of the project b. The key deliverables c. Details of investment appraisal d. Detailed analysis of risks facing the project 6 Developing the Business Case is the normally the responsibility of the project’s: a. Sponsor b. CEO c. Project manager d. Project manager & the project team 7 The project’s requirements will be driven by the: a. Bankers b. Customer c. CEO d. Project Manager 8 The Need for a new project can arise to meet: a. New opportunities b. Need for survival c. Threats d. All of the above CIPM Class Exercises - Set 2 (Stakeholder/Need Analysis/Business Case/Charter) © Centre for Excellence in Project Management (P) Ltd, 2014 140 9 The primary role of the Project Charter is to: a. Authorize the project manager to use resources for project work b. Analyse all the investment options c. Develop the project’s need statement d. All of the above 10 Success criteria: a. Are only the qualitative measures used to measure project success b. Are qualitative and quantitative measures used to measure project success c. Form the baseline of the project d. Are set by the Project Manager 11 Which of the following is a method used for investment appraisal? a. Net Present Value b. Unit rates c. Negotiation d. Parametric estimating 12 Arranging finance for the project forms a part of the: a. Contract b. Business case c. Project Management Plan d. Project strategy 13 Internal Rate of Return for a project will be achieved when the: a. Project’s IRR is higher than the cost of borrowing capital b. The profitability is positive c. Project’s cash flow equals the investment made d. Discount rate applied makes the NPV zero 14 An investment appraisal method that checks when cumulative cash flow becomes equal to the initial investment is known as: a. IRR b. Discounted cash flow c. Payback period d. Financial closure 15 Some of the most important documents used in Project Management are 1) Project Charter 2) Business Case 3) Project Management Plan. The correct order in which they are generated over a period of time is: a. 1,2,3 b. 3,2,1 c. 2,1,3 d. 2,3,1 CIPM Class Exercises - Set 3 (Scope Management) © Centre for Excellence in Project Management (P) Ltd, 2014 141 1 The WBS: a. Breaks down the project in a structured manner b. Is a task oriented detailed breakdown or family tree for a project c. Should include the total scope of the project d. All of the above 2 Who will be involved in preparing the scope baseline? a. The functional managers b. The key stakeholders c. The project team members d. Customer 3 The scope statement should include all except the: a. Project deliverables b. Work Breakdown Structure c. Details of the work to be done d. Acceptance criteria 4 Uncontrolled changes in the scope is known as: a. Change management b. Scope baseline c. Scope creep d. Cost creep 5 A new project manager has come on board and wants to get a better understanding of the different work packages in the project. To do this the project manager should look at the: a. Project charter b. Project network c. WBS dictionary d. Scope statement 6 The top level of the WBS is: a. A work package b. an activity c. The project d. The product 7 Decomposition of project deliverables involves: a. Identifying the elements of each deliverable b. Breaking down the major elements into lower levels c. Verifying the decomposition is correct d. All of above 8 A work package should have all of the following characteristics except: a. More than one parent b. A single owner c. Start date and end date d. Some deliverable CIPM Class Exercises - Set 3 (Scope Management) © Centre for Excellence in Project Management (P) Ltd, 2014 142 9 When planning the project, which of the following should be done first? a. Finalizing the size of the team required for each phase of the project b. Scheduling of the network activities c. Developing the Work Breakdown Structure d. Detailing out the attributes that will be used for inspection 10 A WBS dictionary contains: a. Work package descriptions b. Staff requirements c. Schedule dates d. All of the above 11 Which document will show to the project team that the project has beenofficially sanctioned: a. Project management plan b. Investment appraisal c. Need analysis d. Project charter 12 A significant scope change has been approved in the project. Which document should you first update? a. Scope baseline b. Network schedule c. Cost baseline d. WBS 13 The WBS is an effective tool which: a. Shows the network schedule b. Subdivides the whole project into small manageable parts c. Ensures all the project work is identified d. b and c 14 The Scope statement is not helpful in: a. Improving communication among stakeholders b. Earned value calculations c. Establishing better understanding among team members d. Detailed planning of the project's WBS 15 The Unique numbers that identifyeach element of the WBS is called a. Chart of Account b. Code of Accounts c. Control Account d. Work Package CIPM Class Exercises – Set 4 (Time) © Centre for Excellence in Project Management (P) Ltd, 2014 143 1 A network is: a. A schematic representation of sequential activities in project b. A sequence of events in the project c. The critical path for the project d. Is normally drawn from right to left 2 Your project end date is not acceptable to management. You cannot change the network but have extra resources. What is your best action to reduce the schedule? a. Crash the project b. Fast track the project c. Perform resource leveling d. All of the above 3 The total float of an activity is equal to its: a. Early Finish date plus Early Start b. Early Finish date minus Early Start c. Late Start date minus Early Start d. Late Start date plus it Late Finish 4 Dependencies and precedence relationships are shown using: a. Milestone charts b. WBS c. Responsibility matrix d. Network diagrams 5 What would you not use to display the project schedule? a. Bar chart b. Histogram c. Milestone chart d. Gantt chart 6 The critical path is the: a. Shortest path in the network b. Longest path in the network c. Path in which some activities contain floats d. Path which has the maximum float 7 A Free Float is the: a. Difference between an activities late start and early start b. Amount of time an activity can be delayed without affecting Early Start of any succeeding activity c. Amount of time an activity can be delayed without affecting Late Start of succeeding activities d. All of the above 8 The most commonly used logical relationship is: a. Start - start b. Finish - finish c. Finish - start d. Lead CIPM Class Exercises – Set 4 (Time) © Centre for Excellence in Project Management (P) Ltd, 2014 144 9 The critical path is the path where activities have: a. Zero float b. Maximum float c. Early Start dates earlier than Late Start dates d. Lead activities 10 Gantt charts are primarily used to: a. Show interdependencies between tasks b. Give an overview of a project tasks against a time scale c. Show a network of activities d. Provide guidelines to manage resources 11 You need to complete your project four days earlier. What should you do? a. Announce a prize if the team meets the new deadline b. Brainstorm with team members to crash and fast track activities with floats c. Brainstorm with team members for crashing and fast tracking critical activities d. All of the above 12 In your project you are using weighted average duration estimates for activity durations. This means you are using: a. Critical Chain b. PERT c. Leads and lags d. Late start and late finish floats 13 You need to rearrange the resources in your project so that the cumulative resource usage in the project does not exceed 25resources /week. What do you need to do? a. Decrease the float time b. Reschedule the network c. Use concurrent engineering d. Level the resources 14 All of the following are true about a mandatory dependency except: a. Is also known as hard logic b. Is inherent in the nature of the work c. Is dependent on another project d. Work has to be performed in a specific sequence 15 Crashing the project duration will result in: a. Increased costs b. Need for more manpower c. Decreased costs d. a and b CIPM Class Exercises – Set 5 (Cost & Finance / EVM) © Centre for Excellence in Project Management (P) Ltd, 2014 145 1 An estimate that gives very preliminary indication of likely costs is called: a. Definitive estimates b. Rough Order of Magnitude c. Parametric estimate d. Budget estimates 2 The most detailed and accurate cost estimate is made using the: a. Parametric estimate b. Analogous estimate c. Bottom-up estimate d. Rough Order of Magnitude estimate 3 In a new website to be developed you expect to need about 50 screens. You know that the cost of developing one screen is $200 so you estimate that the 50 screens will cost $10,000. To arrive at this figure you used: a. Parametric estimate b. Analogous estimate c. Bottom-up estimate d. Rough Order of Magnitude estimate 4 A project is running ahead of schedule. In Earned Value reporting this will be reflected as: a. Project’s BAC =CPI b. Project’s SPI <1 c. Project’s SPI >1 d. None of the above 5 All of the following are true of standard deviation except: a. It is a statistical tool that is used to show dispersion of data from the mean b. It measures the variability in the data c. Closer the data examples are to the mean the smaller is the standard deviation d. Closer the data examples are to the mean the larger is the standard deviation 6 The project’s schedule and budget together form: a. The projects detailed budget over the current year b. The time phased budget or the cost baseline c. The Earned Value d. The life cycle cost of the project 7 The cost of electricity in the office where your project team members are sitting along with other office staff is an example of: a. Fixed Cost b. Sunk Cost c. Direct Cost d. Indirect Cost CIPM Class Exercises – Set 5 (Cost & Finance / EVM) © Centre for Excellence in Project Management (P) Ltd, 2014 146 8 If Cost variance is negative then Cost Performance Index will be : a. Less than 1 b. Greater than 1 c. Equal to 1 d. Less than Zero 9 Schedule variance is: a. BCWS-BCWP b. BCWP-BCWS c. ACWP-BCWS d. BCWP-ACWP 10 The project duration is 12 months. After 6 months it is found that the project’s CPI is 1.5 and the SPI is 0.85. If you are the project manager what action should you take? a. Concentrate on improving the cost efficiency b. Concentrate on improving the project’s progress c. Ask management for more money d. Relax as all is going well 11 At the project review meeting your team member tells you the project’s EV is €800, PV is €850 and the AC is €800. What would best describe the health of your project? a. Behind schedule and over budget b. Behind schedule and on budget c. Ahead of schedule and under budget d. Behind schedule and under budget 12 If Estimate at completion is more than Budget at completion at some point in time, then CPI at that time must be a. Greater than 1 b. Equal to 1 c. Less than 1 d. Less than zero 13 Project ABC has a total budget of $9 Million and was planned to be completed in 8 months. While reviewing the progress at the end of 3 months, the following data was presented: PV =$3 Million; EV =$2.5 Million and AC =$3 Million. What is the EAC if the efficiency will change to 100% from now onwards? a. $9 Million b. $8.5 Million c. $9.5 Million d. $10.8 Million CIPM Class Exercises – Set 5 (Cost & Finance / EVM) © Centre for Excellence in Project Management (P) Ltd, 2014 147 14 A project is scheduled to be completed in 18 months. At project review it is found that the CPI is 1.2. This shows the project will be completed in: a. 15 months b. 21 months c. 18 months d. Not possible to determine 15 At project completion, the project’s Earned Value will be same as the: a. Budget at Completion b. Percent complete c. Actual Cost d. Estimate to complete CIPM Class Exercises – Set 6 (Quality) © Centre for Excellence in Project Management (P) Ltd, 2014 148 1 Name a Quality tool that lists out defects in the order of the frequency of occurrence is: a. Crawford slip b. Pareto chart c. Histogram d. Cause-and-effect analysis 2. An indication of excellent quality is: a. Zero conformance cost incurred b. Zero quality training cost incurred c. Lot of field engineers recruited for warranty support d. Zero non-conformance cost incurred 3 Quality Control refers to process of: a. Demonstrating that work is being done according to quality plan b. Monitoring of project results to ensure specified quality is being achieved c. Preparing, checking and recording actions required to achieve required quality d. None of above 4 Prevention over Inspection means: a. Prevention costs exceeds inspection costs b. Cost of appraisal, failure and prevention c. Use correct processes so as to prevent occurrence of defects d. Prevention is performed after the quality inspection 5 A control chart is used to: a. Check if process readings are within a specified range b. Detect the reasons for deviations c. Help prevent a problem to occur through early warning d. A and C 6. Pareto analysis is related to the? a. 80/20 rule b. 20/80 rule c. 50/50 rule d. 85/15 rule 7. In a control chart the upper and lower control limits are generally set: a Two standard deviations from the mean b. Three standard deviations from the mean c. At same level as the specification limits d. It is changed every time 8. Quality planning involves: a. Identifying the most relevant quality standards that should be followed b. Determining actions required to comply with relevant quality standards c. Monitoring of project results to ensure deliverable meets required quality d. a and b CIPM Class Exercises – Set 6 (Quality) © Centre for Excellence in Project Management (P) Ltd, 2014 149 9 The Quality Assurance process: a. Monitors specific results to ensure that they comply with relevant standards b. Provides confidence that the work is being performed as per the plan c. Records actions required to achieve the necessary standard d. Record all the quality metrics using a checklist 10 A Pareto diagram: a. Is an S curve based on the cumulative frequency of occurrence b. Is a histogram depicting the magnitude of frequencies c. Is a histogram based on the order of frequency of occurrence d. Shows that 80 percent of the causes produce 20 percent of the problems 11 Which of the following is not a part of quality assurance? a. Conducting of quality audits b. Identifying improvements in the process c. Ensuring defective products are rejected d. Checking that the process is being correctly followed 12 What best describes the Rule of seven? a Seven consecutive data points are outside the control limits b. Seven consecutive date points are outside the specification limits c. Seven consecutive data points on same side of mean should be investigated d. Seven consecutive data points within control limits but on same side of the mean should be investigated 13 Which of the following is not a cost of internal failure? a Scrap b. Rework c. Warranties d. Repairs 14 Providing required quality in the project can be defined as: a Conformance to requirements b Gold plating c Achieving Six sigma d Having Zero defects 15 The cost of quality is made up of: a. Cost of failure and prevention b. Cost of appraisal, failure and prevention c. Cost of assessment, appraisal, failure and prevention d. Cost of prevention CIPM Class Exercises – Set 7 (Risk Management) © Centre for Excellence in Project Management (P) Ltd, 2014 150 1 A Secondary risk is: a. An unimportant risk b. A new risk created when responding to a risk c. A risk with two chances of occurrence d. A risk a second line of response strategy 2 When brainstormingfor risk identification, it is important to: a. List out the right and wrong options b. List out all the unlikely options c. List out the most likely options d. List out all possible options 3 Risk probability can be described as: a. The likelihood and effect of a risk occurring in the project b. The chances that a similar risk will occur more than once c. The likelihood of a risk occurring d. Likelihood that the project will be completed on time, within budget 4 A Risk Score can be defined as: a. The sum total of the probability times the impact of all the identified risks b. The total number of identified risks in the project c. Probability of successful completion of the project d. The product of the probability of a risk event times its impact 5 When a risk is transferred to another party it reduces: a. Its likelihood of occurrence b. Its impact as well as likelihood of occurrence c. Its impact on the transferor of the risk d. It has no impact on either party 6 Monte Carlo simulation is used for: a. Critical path analysis b. Risk analysis c. Responding to a risk d. Risk identification 7 Risk assessment should be done: a. For all high value projects b. For all projects throughout the project cycle c. For all projects at project initiation and close out d. For projects having contracts 8 Who should be made responsible for implementing agreed risk responses? a. Whoever is best placed to manage the risk effectively b. The person who identified the risk c. The project manager d. The sponsor CIPM Class Exercises – Set 7 (Risk Management) © Centre for Excellence in Project Management (P) Ltd, 2014 151 9 Assumption analysis: a. Undertakes a stability analysis b. Is done to identify risks c. Undertakes a sensitivity analysis d. All of the above 10 Risk mitigation is carried out after: a. Risk identification process b. Quantitative risk analysis c. Risk response planning d. Qualitative risk assessment CIPM Exercises - Set 8 (Communication/Org Struct /Team/Leadership/Conflict/Motivation) © Centre for Excellence in Project Management (P) Ltd, 2014 152 1 For effective team building, the team members should avoid: a Common identity b Shared vision c Self orientation d Delegation 2 In order to motivate the project team members, the project manager can: a. Provide more challenging work b. Give recognition for good work done c. Properly delegate work d. All of the above 3 To manage the project team it is not necessary for the project manager to be a: a. Problem solver b. Communicator c. Technical expert d. Passionate 4 The project manager believes in keeping tight control over the team working and dictating what should be done by the team members. This style of management is ……………. and more suitable for ……………. projects: a. Bureaucratic, government b. Directive, low level c. Autocratic, low risk d. Laissez Faire, R&D 5 Which of the following conflict resolution method results in a long lasting solution? a. Forcing b. Confrontation c. Withdrawal d. Smoothing 6 In case of a conflict, who will decide the importance between the project’s cost, schedule and quality? a. Project manager b. Sponsor c. Both the project manager and sponsor d. None of above 7 When a conflict arises in the project team between two team members the project manager’s preferred approach should be: a. Let the persons involved be responsible to resolve their conflict b. Try to resolve the conflict as soon as possible c. Try to resolve it when he has some spare time d. Avoid getting involved CIPM Exercises - Set 8 (Communication/Org Struct /Team/Leadership/Conflict/Motivation) © Centre for Excellence in Project Management (P) Ltd, 2014 153 8 If your boss supervises your work throughout the day to see what you are doing, then your boss believes in: a. Theory X management b. Theory Y management c. Kaizen d. Quality circles 9 The lowest level need in Maslow’s Hierarchy of Needs is: a. Security b. Social needs c. Physiological needs d. Security needs 10 Herzberg’s Two Factor theory looks at the two aspects of ……… and …….: a. Motivators, de-motivators b. Motivators, hygiene factors c. Salary, recognition d. Hygiene factors, social needs 11 Self Actualization is: a. A Herzberg’s Motivation Factor b. A Management philosophy c. Maslow’s second level need d. Maslow’s highest level need 12 Which of the following is not true of a projectized organization? a. The company is organized by projects b. The functional manager is jointly responsible for the project c. The project manager has full control of the project d. Team members report to the project manager 13 An organizational structure that is best suited for doing repetitive jobs is: a. Projectized b. Matrix c. Functional / Line d. a and c 14 Project staffs have to report to more than one boss in a: a. Functional Organization b. Balanced Matrix structure c. International projects d. Government projects 15 All of the following are true about the Responsibility Matrix except: a. Shows when the tasks will be performed b. Is made using the WBS and the OBS c. Rows generally indicate the activities d. Shows the responsibilities or functions CIPM Exercises - Set 8 (Communication/Org Struct /Team/Leadership/Conflict/Motivation) © Centre for Excellence in Project Management (P) Ltd, 2014 154 16 Which one of the following communication methods has more message impact on the receiver: a. Verbal b. Written c. Non-verbal d. Diagram 17. In your Project Management Training session, the majority of the communication will be taking place through: a. Push Communication b. Pull Communication c. One way Communication d. Interactive Communication 18. You are the Project Manager having a teamof 25 Software engineers distributed in 3 geographic locations. Each location is headed by a Assistant PM . No. of communication channels possible in your project are: a. 406 b. 378 c. 392 d. 350 19 A Document Distribution Schedule: a. Lists all documents required for project and who is responsible for producing them b. Shows who will receive what document and at what frequency c. Is included in the Project Management Plan d. All of above 20 A notification issued by your HRD about flexible working hours is an example of a. Horizontal Communication b. Push Communication c. Informal Communication d. Pull Communication CIPM Class Exercise – Set 9 (Procurement/Change /Configuration/Integration/Closeout) © Centre for Excellence in Project Management (P) Ltd, 2014 155 1 At contract closeout, a product verification is done to: a. Verify the product's design b. To document the seller's work c. Verify the work completed for making seller payments d. Ensure that the seller's work is complete and satisfactorily meets all the contract requirement 2 Configuration management is concerned with: a. Hiring manpower to perform changes in the project b. Scheduling when the changes will be required in the project c. Ensuring the deliverables are according to latest project’s requirements d. B and c 3 You want to outsource some of the work packages, but are not very sure of the exact nature of the work involved. The most suitable contract in this case is a: a. Fixed plus incentive fee contract b. Cost reimbursable contract c. Time & Material contract d. Any type is equally suitable 4 What item should be considered when selecting a supplier? a. Dependability b. Product quality c. Location d. All of above 5 Contract Closeout involves all of the following except: a. Relocating the team members b. Formal acceptance of the work by the buyer c. Updating the contract file d. Product verification 6 Contract closure should be done: a. If there is enough time b. If a contract is terminated before completion c. At the end of the contract d. b and c 7 The amount of monitoring of contractor's cost by the PM will vary based on: a. The value of the contract b. The type of contract being used c. The reputation of the contractor d. The nature of the work being done CIPM Class Exercise – Set 9 (Procurement/Change /Configuration/Integration/Closeout) © Centre for Excellence in Project Management (P) Ltd, 2014 156 8 What is not true of a Fixed Price contract: a. Is the most commonly used contract b. Buyer requires to monitor cost incurred by seller c. Should have clear work specifications d. Contractor faces more risk than buyer 9 Managing issues in projects is important because: a. It helps to pinpoint the unresolved issues b. It helps to understand some of the root causes of poor project performance c. It helps to build team cohesion d. All of the above 10 The project is progressing on schedule when the client asks for a change that is likely to upset the schedule. As the project manager what should you do first? a. Tell the client the change cannot be implemented and the time is too short b. Agree to the change and start the working on it with the team. c. Inform the sponsor of the change request d. Analyze the impact of the change and follow the change management process 11 A change log is: a. A record of all authorized project changes b. A record of all proposed changes, rejected or authorized c. A record of the people who are creating issues in the project d. A record of rejected changes with reason for rejection 12 What is true of project closeout? a. It is the done in the implementation phase b. Uses the Business case to ensure that all benefits got materialized c. It does not involve the project manager d. Check is done to see all work is completed 13 For proper integration within a project: a. Relationships between sub-projects in the project should be clear b. Team members must meet daily c. The sponsor should be actively involved d. All of above 14 Project integration involves: a. Efficient use of network schedules b. Effective coordination and control c. Making the responsibility matrix d. Meetings of all the stakeholders regularly 15 Lessons learned documentation is important as they: a. Help to pinpoint fraudulent activities b. Hel to conduct a project audit c. Are most useful in future projects to be performed by the organization d. All of the above CIPM Workshop Class Exercises © Centre for Excellence in Project Management (P) Ltd. 2014 157 NPV - 1 Q. NPV1 Two projects – project A and project B are being appraised for investment. The cash flows for each project are as follows: Project A in (Rs.) Investment is 20,000 Cash in or Revenue for 5 years is: 10,000; 20,000; 40,000; 45,000 and 60,000 respectively. Expenses or cash out for 5 years is: 7,000; 15,000; 30,000; 35,000 and 50,000 respectively. Project B in (Rs.) Investment is 40,000 Cash in or Revenue for first five years is: 20,000; 30,000; 50,000; 60,000 and 70,000. Expenses or cash out for first five years is: 17,000; 20,000; 35,000; 40,000 and 60,000. Discount factors for the project appraisal are: Year Factor 0 1.0 1 .90 2 .80 3 .70 4 .60 5 .50 Determine which project should you opt for? NPV – 2 Q. NPV2 A project is planned in which the capital cost to be incurred is £ 5,000, the interest rate expected is 8% per annum and the anticipated annual return or revenue expected is £ 1500 each year for a period of 4 years. 2.1 Calculate what the Net Present Value (NPV) will be for this project. 2.2 Will this project be viable or not? CIPM Workshop Class Exercises © Centre for Excellence in Project Management (P) Ltd. 2014 158 Network - 1 Q. N1 Shown below are activities with their durations, precedent activities and resources per day. Q. N1.1 Draw the Network Q. N1.2 Determine the Critical Path Q. N1.3 Determine the project duration Q. N1.4 List out all activities with total float and give their values Q. N1.5 List out all activities with free float and give their values Network – 3 Q.N3 Draw the Network using PDM Activities Duration in weeks Dependencies Resources/week A 4 - 3 B 6 A 2 C 4 A 1 D 8 A 5 E 9 B&D 4 F 12 E 9 G 14 C&D 3 H 3 G 5 J 7 F&H 3 Q. N3.1 Find out the Critical Path Q. N3.2 List out the Floats Q. N3.3 List out the Free Floats Q. N3.4 Draw a Bar chart Activity Duration (Days) Precedent Activity/Activities Resources/day A 4 - 4 B 2 A 3 C 3 A 2 D 8 C 5 E 3 B 2 F 5 E 3 G 5 C 3 H 1 D, F, G 1 CIPM Workshop Class Exercises © Centre for Excellence in Project Management (P) Ltd. 2014 159 Network 4 Q. N4.1 Draw the Network using PDM and determine the Critical Path. Q. N4.2 List out the Floats and Free floats. Standard deviation Q 1) There are three activities A, B and C in a network having the values: Q1.1 Find the Pert duration and standard deviation for A, B and C Q1.2 Find the standard deviation and duration of the entire Network assuming activities are in sequence. Q1.3 What is the time range for the completing the activities and the project at 68% confidence level. Activity Duration (days) Precedent activities (finish-start) Resources per Day A 2 - 2 B 4 - 3 C 8 A, B 5 D 9 C with 5 days lead 5 E 5 C 4 F 3 D, E 6 G 3 D 3 H 1 F, G 2 Activity Optimistic (O) Most Likely (ML) Pessimistic (P) A 15 20 30 B 10 20 30 C 12 20 29 CIPM Workshop Class Exercises © Centre for Excellence in Project Management (P) Ltd. 2014 160 Crashing Activity Predecessor Normal time required in weeks Crash time in weeks Normal cost Crash cost A - 5 3 8,000 12,000 B A 5 4 24,000 34,000 C A 3 2 8,000 9,500 D B 2 1 11,000 16,000 E B,C 6 4 34,000 48,000 F D,E 8 4 30,000 36,000 Q1) If you have to crash the project by 2 weeks, which activity will you choose? Q2) What will be the cost for crashing the project by 2 Weeks? CIPM Workshop Class Exercises © Centre for Excellence in Project Management (P) Ltd. 2014 161 Q. EV1 A project has 4 activities – A, B, C and D. At review point (originally planned completion point) this was the position. Activity Budgeted % Complete Actual Man-hours of activity Man-hours A 160 90 150 B 200 50 140 C 100 60 50 D 300 75 225 ------------ -------- 760 565 EV1.1 What is the earned value for each activity and the project at review point? EV1.2 What is the overall % complete of the project? EV1.3 What is the current CPI? EV1.4 What are the man-hours the project is likely to take to be completed based on the current cost efficiency. Earned Value – 2 Q EV2 A project has a budget of Rs.1,00,000. and is planned to be completed in 12 months. The following table shows the cumulative values for each at the end of 4 months. Month Planned Cost EV Actual Cost 1 7000 2000 2500 2 14000 6000 9000 3 22000 10000 15000 4 30000 14000 21000 EV2.1 Calculate the cost variance and the schedule variance at the end of 4 months. EV2.2 At the end of the 4 th month what would you estimate the cost at completion to be? EV2.3 Estimate the likely time of completion of project if efficiency remains the same. EV2.4 Estimate likely time for completion of project if efficiency becomes 100% from month 5. CIPM Workshop Class Exercises © Centre for Excellence in Project Management (P) Ltd. 2014 162 Earned Value – 4 Following are details of a project that is planned to be completed in 12 months at a total cost of Rs.1000. The project is being reviewed at the end of month 4. Month PV in Rs AC in Rs EV 1 100 100 50 2 200 250 150 3 300 400 201 4 400 550 300 1 Calculate the schedule variance at month 4. 2 Calculate the cost variance at month 4. 3 What is the cost efficiency of the project? 4 What is the status of the project? 5 Forecast the time when project can be expected to be completed based on the current performance. 6 Forecast the expected cost of the project based on current performance. 7 Forecast expected project cost if efficiency becomes 50% from 5 th month. 8 Forecast expected cost of project if the efficiency improves to 100% from the 5 th month. 9 Forecast the time when the project can be expected to be completed assuming100% efficiency from month 5 onwards. CIPM Workshop Class Exercises © Centre for Excellence in Project Management (P) Ltd. 2014 163 Cost Plus Incentive Fee Q. What is the contractor fee and total price for the following CPIF contract details: Contract details are: Target Cost 2,10,000 Target Fee 25,000 Target Price 2,35,000 Share Ratio 80/20 (Buyer/Seller) Minimum Fee 20,000 Actual Cost 2,00,000 Option 1: Actual Cost 2,00,000 Option 2: Actual Cost 2,50,000 Fixed Price Incentive Fee Q. What is the contractor fee and total price for the following FPIF contract details: Target Cost 1,00,000 Target Fee 10,000 Target Price 1,10,000 Share Ratio 75/25 Price Ceiling 1,20,000 (Max. payout) Actual Cost 90,000 Q. What is the contractor fee and total for the following FPIF contract details: Target Cost 1,50,000 Target Fee 10,000 Target Price 1,60,000 Share Ratio 80/20 Ceiling Price 1,75,000 Actual Cost 1,70,000 Organised by Centre for Excellence in Project Management (P) Ltd. 164 MOCK TEST A ND A NSWERS for Three Day Workshop on leading to the Certificate In Project Management (CIPM) Totality of Project Management 7 - 9 April 2014 Indo German Tool Room Aurangabad for PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 165 1 Match the following: Money originally budgeted for project.. ……; How much money spent so far ………….; Physical work accomplished so far ………………; Revised estimate for the final cost of project …………. A EAC B BAC C ACWP D EV 2 A Pareto diagram will be used bythe project manager to: A Focus on the most critical issues to improve quality B Focus on stimulating thinking C Explore a desired future outcome D Determine if a process is out of control 3 In the beginning of a project, the probability of successfully completing the project is ______ , risk is _____ and uncertainty is _______: A Lowest, lowest, lowest B Highest, highest, highest C Lowest, highest, highest D Highest, lowest, lowest 4 A work package is all except: A The lowest level of a work breakdown structure B The level where work will be controlled C Can have different owners for better control D Used as input for developing the network 5 The final scope baseline is the original: A Project schedule and budget B Description in the project charter C Original scope plus or minus approved changes D Performance measure 6 In the context of projects, temporary means that: A Projects have a finite time duration with start and end dates B Every project has a definite beginning C The project results are temporary D Projects have no significance to the permanent sustainability of a corporation 7 A work breakdown structure is considered a key tool in project management as it: A Identifies different work elements B Displays the overall project schedule C Provides the basis for cost estimates D A and C PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 166 8 Project stakeholders are defined as those who are _________: A Involved in the project and /or have positive or negative influence on project execution B Are only involved in project execution C Have influence only in investment decisions D Are a member of the Board of the corporation 9 What is not true of standard deviation? A A larger standard deviation means the spread of uncertainty is greater B A larger standard deviation means the spread of uncertainty is smaller C Standard deviation of an activity is calculated using the formula (Pessimistic - Optimistic) / 6 D PERT is used for estimating costs and time duration 10 In a three time estimate using PERT, if the optimistic estimate for a task is 6 days and pessimistic estimate is 18days, what is the most likely estimate if the mean is 10days: A 7 days B 8 days C 9days D 12 days 11 How will a negative float be shown in a network? A The late start date is earlier than the early start date B The critical path supports the imposed end date C The early finish date is equal to the late finish date D The late start date is later than early start date 12 Task B cannot begin until 10 days after task A begins is best described as a: A Finish to start relationship B Start to start relationship C Start to start with a 10 days lag D Start to start with a 5 day lead 13 Which of the following is most important to plan and control the project? A Project charter B Project schedule C Work breakdown structure D Work assignments 14 Your project manager has asked you to show the relationships between the different activities. To do this you should use a: A Bar chart B Network diagram C Histogram D Work breakdown structure PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 167 15 ROMcost estimates are meaningful during the _______ phase of the project: A Conceptual B Planning C Control D Execution 16 Your project work requires that you must wait for 3 days before you can begin the successor activity. What is this relationship called? A Lead B External dependency C Lag D Discretionary dependency 17 If you are a project team member how could you make use of floats? A Use the floats to crash the project B Utilize the floats to optimize use of resources C Fast track the activities that have floats D All of the above 18 When can a non-critical activity become a critical activity? A Not possible B If the activity is not completed by it’s Late Finish date C When the project progress shows the activity has a negative float D B and C 19 Project Integration involves balancing between: A Risk, cost and schedule B Direct cost, indirect cost and resource availability C Cost, Scope and Schedule D Quality, procurement and time 20 A Bar chart is best used to: A Show the activity dependencies B Show the completion date of key events C Review the project’s progress at a summary level D Assign responsibility to team members 21 A start to start logical relationship is used to show: A The predecessor activity can start once it’s successor has started B The successor activity can start once it’s predecessor has started C The successor activity can finish once it’s predecessor has started D A lead in the successor activity 22 When developing the WBS at which level will you place the work package? A The highest level of the WBS B The middle level of the WBS C The lowest level of the WBS D Will depend on the industry PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 168 23 You notice that your client has made a calculation mistake and made an excess payment to you. What should you do? A It is not your problem. Client should have used computers B Bring it to the client’s attention C Do not worry as any way you were loosing money on this contract, extra money will help you to recover some losses D Ignore it until matter comes into notice 24 Activity C is part of an on-going project. The activity has a total duration of 15 days, the early start is day 25 and the late start is day 30. Two activities D and F both have a finish to start dependency with activity C. Activity D is the critical activity. This implies that activity C: A Is a critical activity as activities D and F are dependent on it B Will delay the project end date if it does not begin on day 25 of the project C Does not lie on the critical path D Has a float of 15 days 25 Complex projects that require a multi disciplinary approach will be most suited to which of the following structures: A A inverted matrix organization B A functional organization C A strong matrix organization D A weak matrix organization 26 You are required to examine the consequences of a scope change. To do this you should view its impact on the project’s: A Schedule B Cost C Quality D All of the above 27 When you are contemplating how to recover a delay in the project schedule, the last thing you should consider is to _______: A Look at the critical path carefully B Apply more resources C Fast track the project D Adjust the project end date to adjust the time delay 28 One should have an attitude of ____________ in order to be successful in negotiating across global cultures: A Forcing your position B Distrust C Mutual trust and cooperation D Showing your company is the best 29 If the project manager does not allow the team members to provide extra items as an add-on to please the customer during the execution phase, is she/he following the principles of good scope management to complete the requiredwork? A May be yes or no B No C Yes D It depends PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 169 30 Configuration management is closely related to: A Change control B Project control C Time control D Scope control 31 You are involved in identifying risks using the Delphi technique. Which statement is not true about this technique? A Participants must be known to each other B Participants can be in different locations C Participants are anonymous D Subject matter experts are used to provide expert opinion 32 All of the following consider time value of money except: A Payback period B Discounted cash flow C Net present value D Internal rate of return 33 A very common pitfall in effective communication is: A Not selecting the correct medium B Not considering the position of the receiver C Assuming that because a message is sent, it has been received D Not selecting the correct audience to receive the message 34 The project manager of a large multidisciplinary engineering project is evolving a RAM (Responsibility Assignment Matrix) to assign the different roles and responsibilities for her team members. She must use: A The project’s WBS and the organizational chart B The WBS C The network schedule D The staff productivity 35 When communicating, project managers spend most of their time _______: A Reporting B Exchanging information C On the phone D Solving problems 36 During the execution of a project two team members disagree about how to proceed with a task that they are working on. This disagreement is seriously affecting the work on the project. The project manager holds a meeting with both of them to discuss the root cause of the problemand decide on the best approach. This method of settling differences can be described as: A Compromising B Forcing C Smoothing D Confronting/problem solving PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 170 37 Which of the following is NOT the responsibility of the project manager? A Monitoring project progress B Project Integration C Budgeting project costs D Developing the Project charter 38 The detailed project plans are developed by the: A CEO B Functional managers C Project manager with involvement of the project team D Project team alone Type 2 Questions 39 The project is likely to be delayed if: A There are too many changes B If proper planning is carried out in the beginning C There is a no shortage of cash D Quality assurance is neglected E A and D 40 The Project Management Plan should be accepted by the: A Project Manager B Project Manager and sponsor C Project Manager and customer D Sponsor and customer E Project manager, sponsor and the project team 41 You are evaluating five projects. Project A has an NPV of 10,000, Project B has an NPV of Zero, Project C has an NPV of 11,000, Project D has a NPV of 9,000 and Project E has a NPV of -11,000. You should select: A Project A B Project B C Project C D Project D E Project E 42 During the project’s implementation phase an unidentified risk arises. What should you do first? A Alert the client B Inform the Sponsor C Analyze the risk D Revise the network schedule E Mitigate the risk 43 What would you not include in the Project Charter? A Project’s justification B Customer requirements and expectations C Network schedule D Milestone schedule E Summary budget PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 171 44 An “S” curve: A Shows cumulative values B Describes allocation of resources C An output of cost estimating D Shows interrelationships between projects E Shows interrelationships between direct and indirect costs 45 “I cannot test the software until I write the softwareprogram”. This expression describes which of the following dependencies? A Discretionary B Soft C Mandatory or hard D Regulated E External 46 The IRR of a project shows: A Helps to measure the project’s breakeven point B The project’s expected profit C The Payback period in NPV terms D The project’s adjusted total investment E B and C Type 3 Questions 47 The activities of a small project are given below with the activity duration and activity interrelationships. Select the critical path and the activity/ies that have free float. Activity Duration in weeks Predecessor Activities Type of Dependency A 1 - FS B 3 A FS C 6 B FS D 5 A FS E 2 D FS F 1 C & E FS G 6 E FS H 4 F & G FS A Critical path: A-B-C-F-H. Activities with free float: E B Critical path: A-D-E-G-H. Activities with free float: F C Critical path: A-D-E-G-H. Activities with free float: F and E D Critical path: A-D-E-F-H. Activities with free float: D and C PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 172 48 The following table shows the initial investment, cash flows and Discount Factor associated with a particular project option. Calculate the Payback period and the Net Present Value for this project. Year Cash Flow (Rs.) Discount Factor (8%) 0 1,40,000 1.000 1 40,000 .926 2 60,000 .857 3 80,000 .794 4 1,00,000 .735 5 1,00,000 .681 A 3.0 years and Rs.2,93,580 B 2.2 years and Rs.2,93,580 C 2.5 years and Rs.1,53,580 D 2.5 years and Rs.2,40,000 49 A project has a budget of Rs.1,50,000 and a planned duration of 24 months. The following table shows progress information for the first four months. Figures are cumulative: What is the cost variance and schedule variance at the end of the third month and the Estimate at completion based on the latest progress information? Month 1 2 3 4 Planned (Rs) 10,000 20,000 30,000 45,000 Actual Spend (Rs) 6000 14,000 25,000 38,000 Earned Value (Rs) 5000 12,000 21,000 32,000 A -9000; -4000; 112,000 B 4000; 9000; 188,000 C -4000; -9000; 178,147 D -6000; -13,000; 211,267 PRACTICE TEST : 50 QUESTIONS (Time : 50 minutes) © Centre for Excellence in Project Management (P) Ltd. 2014 173 50 The probability and impact grid shown below depicts the relative positions of different risks to the project following a risk assessment. The risk identification numbers are entered in the grid. Select the top 5 risks in the order of their priority. A 4, 6, 12, 9, 1 B 6, 12, 4, 9, 3 C 11, 5, 2, 7, 3 D 6, 12, 9, 10, 4 7 3 4 6 12 8 9 2 1 11 5 10 P r o b a b i l i t y Very High(.9) High (.75) Medium (.5) Low (.35) Very low (.2) Very low Low Med High Very High .10 .25 .4 .6 .9 Impact CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 174 Ans NPV - 1 ------------------------------------------------------------------------------------------------------------------------------------ Year Discount Cash Flow A PV A Cash Flow B PV B Factor (Rev.-Exp.) (Cash Flow x DCF) (Rev.-Exp.) (Cash Flow x DCF) (RS) (Rs) (Rs) (Rs) ------------------------------------------------------------------------------------------------------------------------------------ 1 .90 3000 2700 3000 2700 2 .80 5000 4000 10000 8000 3 .70 10000 7000 15000 10500 4 .60 10000 6000 20000 12000 5 .50 10000 5000 10000 5000 -------- ---------- --------- --------- 24,700 38,200 ---------- ---------- Less Initial investment 20,000 40,000 NPV for option A =24,700 - 20,000 =Rs. 4,700 NPV for option B =38,200 - 40,000 =Rs. -1,800 Option A is the better option. The NPV of option B is negative so one should go for option A. Note: (A higher NPV is better. If NPV negative then one should not go ahead with project.) CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 175 NPV – 2 Q. NPV2 A proj ect is planned in which the capital cost to be incurred is £ 5,000, the interest rate expected i s 8% per annum and the anticipated annual return or revenue expected is £ 1500 each year for a period of 4 years. 2.1 Calculate what the Net Present Value (NPV) will be for this project. 2.2 Will this project be viable or not? Discount Factor @ 8% is calculated below: Year Discount Factor 1 .925 2 .857 3 .793 4 .735 Ans. 2.1 ------------------------------------------------------------------------------------------------- Year Discount Cash Flow in £ PV £ Factor (Anticipated annual return) (Cash Flow x Discount Factor) or cash flow ------------------------------------------------------------------------------------------------- 1 .925 1500 1387.5 2 .857 1500 1285.5 3 .793 1500 1189.5 4 .735 1500 1102.5 --------- ------- 4965 Less Initial investment 5000 -------- - 35 NPV = - 35 Ans. 2.2 Project is not viable as the NPV is negative. CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 176 Standard Deviation Q1 A path has 3 activities A, B and C. Activity Optimistic Most Likely Pessimistic A 15 20 30 B 10 20 30 C 12 20 29 Q1.1) What is the PERT durations and the Standard Deviationfor each activity? Q1.2) Find the Pert duration and SD for the path. Q1.3) What is the time range for the completing the activities and the project at 68% confidence level. Activity O ML P PERT Dur. (Mean) O+(4xML) + P 6 Activity S.D. (P-O)/6 Activity Variance {(P-O)/6} 2 Range of Duration Estimate A 15 20 30 20.83 15+80+30 6 2.50 6.250 2.50 x 2.50) 20.83 +/- 2.50 18.33 to 23.33 B 10 20 30 20.0 3.33 11.088 20.00+/- 3.33 16.67 to 23.33 C 12 20 29 20.16 2.83 8.008 20.16 +/- 2.83 17.33 to 22.99 For the Path A+B+C 60.99 5.034 (Sq. Rt of 25.346 which is Variances of A+B+C 25.346 (Total Activity Variance for A+B+C) 60.99 +/-5.034 55.965 to 66.024 CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 177 Q. EV1 A project has 4 activities – A, B, C and D. At review point, (originally planned completion point), this was the position in man-hours. Activity Budgeted % Complete Actual Man-hours of activity Man-hours A 160 90 150 B 200 50 140 C 100 60 50 D 300 75 225 ------- ------- 760 565 EV1.1 What is the earned value for each activity and the project at review point? EV1.2 What is the overall % complete of the project? EV1.3 What is the current CPI? EV1.4 What are the man-hours the project is likely to take to be completed based on the current cost efficiency. 1.1 EV for A =144 (PV x % complete) EV for B =100 EV for C =60 EV for D =225 EV for the project =529 Man-hours 1.2 Overall % complete of the project is: 69.6% (Total EV / Total PV) =(529/760) =69.6% 1.3 Current cost efficiency of the project is: 93.6% (Total EV/Total AC) =529/565 =0.936 1.4 Expected man-hours (EAC) based on current performance =812 Man-hours (BAC/CPI) CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 178 Earned Value – 2 Q The Project budget is Rs. 1,00,000 and i s planned to be completed in 12 months. Month PV (BCWS) EV (BCWP) Actual Cost (ACWP) 1 7000 2000 2500 2 14000 6000 9000 3 22000 10000 15000 4 30000 14000 21000 Q. What is the schedule variance at month 4? Ans. Schedule variance =EV – PV (BCWP – BCWS) =14000 – 30000 =-16000 Cost variance =EV – AC (BCWP – ACWP) =14000 – 21000 =-7000 Q. Cost of completion at end of 4 th month is? Ans. EAC =BAC / CPI =100,000 (14000/21000) =100,000 / .666 =Rs.1,50,000 Q. Estimate likely time of completion of project if efficiency remains same. Ans. =Planned time to complete / SPI =12 months / (BCWP/BCWS) =12 (14,000/30,000) =12 / .4666 =25.71 months Q. Estimate likely time for completion of project if efficiency becomes 100% from month 5. Ans. =Current month +Behind Schedule months +Remaining months (for backlog months compare BCWP with BCWS) =4 +2 +8 =14 months at 100% efficiency CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 179 Earned Value - 4 Following are details of a project that is planned to be completed in 12 months at a total cost of Rs.1000. The project is being reviewed at the end of month 4. Month PV in Rs AC in Rs EV 1 100 100 50 2 200 250 150 3 300 400 201 4 400 550 300 1 Calculate the schedule variance at month 4. Schedule Variance =EV - PV = 300 - 400 = -Rs. 100 2 Calculate the cost variance at month 4. Cost Variance =EV - AC = 300 - 550= -Rs. 250 3 What is the cost efficiency of the project? Efficiency is 54.5% (CPI i.e. EV/AC) 4 What is the status of the project? The project is over budget by Rs. 250 and behind schedule by 25% 5 Forecast the time when the project can be expected to be completed based on the current performance. Forecasted completion date = OD/SPI = 12 / .75 = 16 months 6 Forecast the expected cost of the project based on the current performance. Expected cost of project as per current performance is Rs. 1833. BAC / CPI =1000/.545 7 Forecast the expected cost of the project if the efficiency becomes 50% from 5 th month. Expected cost of project if efficiency is 50% from month 5 is Rs. 1950 AC +BAC-EV = 550+(700 /.5) =1950 .5 8 Forecast the expected cost of project if efficiency becomes 100% from 5 th month. Expected cost of project if efficiency is 100% from month 5 is Rs. 1250 AC +BAC-EV =550 +700 =1250 1 9 Forecast the time when the project can be expected to be completed assuming 100% efficiency from month 5 onwards. Project can be expected to be completed in 13 months. (current month +Behind schedule months +remaining months) =4 +1 +8 =13 months CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 180 Cost Plus Incentive Fee Q. What is the contractor fee and total price for the following CPIF contract details: Contract details are: Target Cost 2,10,000 Target Fee 25,000 Target Price 2,35,000 Share Ratio 80/20 (Buyer/Seller) Minimum Fee 20,000 Actual Cost 2,00,000 Option 1: Actual Cost 2,00,000 Option 2: Option 1 : Actual cost =2,00,000 Contractor’s Fee = 2,10,000 – 2,00,000 (Target Cost minus Actual cost) 10,000 x 20% =2000 (20% of cost saving) 25,000 +2000 =27,000 Final Price of contract =Actual cost +Contractor’s fee =2,00,000 +27,000 =2,27,000/- --------------------------------------------------------- Option 2 : Actual Cost 2,50,000 Contractor’s Fee = 2,10,000 – 2,50,000 (Target cost minus Actual cost) -40,000 x 20% =-8000 (20% of extra cost) 25,000 - 8000 =17,000 (Target fee less share of cost overrun) Contractor fee =20,000/- (Minimum Fee assured is 20,000) Final Price of contract =Actual cost +Contractor’s fee =2,50,000 +20,000 =2,70,000/- CIPM Preparation Workshop Class Exercises - Answers © Centre for Excellence in Project Management (P) Ltd, 2014 181 Fixed Price Incentive Fee Q. What is the contractor fee and total price for the following FPIF contract details: Target Cost 1,00,000 Target Fee 10,000 Target Price 1,10,000 Share Ratio 75/25 Price Ceiling 1,20,000 (Max. payout) Actual Cost 90,000 Contractor Fee =10,000 x .25 (share ratio of cost savings -Target cost less Actual cost) =2,500 +10,000 (cost saving share +Target fee) =12,500 Final Price =90,000 +12,500 (Actual cost +contractor Fee) =1,02,500 --------------------------------------------------------------------------- Q. What is the contractor fee and total for the following FPIF contract details: Target Cost 1,50,000 Target Fee 10,000 Target Price 1,60,000 Share Ratio 80/20 Ceiling Price 1,75,000 Actual Cost 1,70,000 Contractor’s Fee [(150,000 – 170,000) (.20) =-4000 Fee reduction =10,000 - 4000 (10,000 less 4000) Target fee after adjusting for 20% excess cost =6000 less any excess cost above Ceiling price Final Price 1,70,000 +5000 (6000 less excess cost) =1,75,000 (Limited to ceiling) 6 9 7 10 E 4 6 5 7 B 4 7 4 7 C 7 15 7 15 D 0 4 0 4 A 9 14 10 15 F 7 12 10 15 G 15 16 15 16 H 4d 2d 3d 3d 8d 5d 5d 1d 0 3 0 0 1 1 1 0 ES EF LS LF Activity DUR F (d, w, m) 2. The Critical Path is : A-C-D-H 3. The project duration is : 16 days 4. The Total Float : B = 1 day, E = 1 day, F = 1 day, G = 3 day 5. Free Float : F = 1 day, G = 3 day NETWORK-1 (Answer) Legend: Note: .Figures in a box are in the same time units as the unit of the duration i.e. in days (d), week (w) or month (m). ES - Early Start EF - Early Finish DUR - Duration of an activity (d = days, w = weeks, m = months) A - Name of an activity LS - Late start LF - Late Finish F - Total Float © Centre for Excellence in Project Management Class Exercises - Answers 182 © Centre for Excellence in Project Management (P) Ltd. 183 Network 1 Resource Histogram & ‘S’ Curve 0 4 0 4 A 4w 0 4 8 12 16 C 4w 8 4 12 4 12 D 8w 0 12 26 16 30 G 14w 4 4 10 6 12 B 6w 2 12 21 12 21 E 9w 0 21 33 21 33 F 12w 0 26 29 30 33 H 3w 4 33 40 33 40 J 7w 0 ES EF LS LF Activity DUR F (d, w, m) A. The Critical Path is : A-D-E-F-J B. Total float is : B = 2 Weeks, C = 8 Weeks, G = 4 Weeks, H = 4 Weeks C. Free Float is : B = 2 Weeks, C = 4 Weeks, H = 4 Weeks NETWORK-3 Legend: Note: .Figures in a box are in the same time units as the unit of the duration i.e. in days (d), week (w) or month (m). ES - Early Start EF - Early Finish DUR - Duration of an activity (d = days, w = weeks, m = months) A - Name of an activity LS - Late start LF - Late Finish F - Total Float © Centre for Excellence in Project Management Class Exercises - Answers 184 ABCDEFGHJ 3 3 8 8 7 5 7 7 7 7 7 9 9 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 1 6 1 4 1 2 1 0 86420 3 3 3 3 3 3 5 7 7 7 7 9 9 3 3 5 5 5 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 2 2 2 2 2 2 5 5 5 5 5 5 5 5 9 9 9 9 9 9 9 9 9 9 9 9 1 1 1 1 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 3 0 3 1 3 2 3 3 3 4 3 5 3 6 3 7 3 8 3 9 4 0 3 3 3 3 3 3 1 4 1 4 1 4 1 2 1 2 1 2 1 2 1 2 C l a s s E x e r c i s e s - A n s w e r s N E T W O R K - 3 ( A n s w e r ) A c t i v i t y W k l y R e s . E n g . W e e k s 7 8 8 3 3 ® C e n t r e f o r E x c e l l e n c e i n P r o j e c t M a n a g e m e n t ( P ) L t d M e n R e s . E n g . 185 Activity Duration (days) Precedent activities (finish start) Resources per Day A B C D E F G H 2 4 8 9 5 3 3 1 - - A, B C with 5 days lead C D, E D F, G 2 3 5 5 4 6 3 2 Class Exercises - Answers 0 2 2 2 2 4 A 16 3 19 17 1 20 G 0 4 4 0 4 B 4 8 12 4 0 12 C 17 3 20 17 0 20 F 20 1 21 20 0 21 H 12 5 17 12 0 17 E 7 9 16 8 1 17 D In Lead: • In Forward Pass the Lead amount of 5 days is subtracted from ES of ‘D’ • In Backward Pass the lead amount of 5 days is added to LS of D for ‘C’ - the procceding activity In Lag: • In Forward Pass the lag amount is added to the ES of activity having the Lag NOTE: The Critical Path is B- C- E- F- H Total Float: A= 2 days; D= 1 Day; G=1 day Free Floats: A=2 days; G=1 day Network 4 (Subt. 5 from ES of D) (Add 5 to 8 for C) • In Backward Pass the lag amount is subtracted from the LS of the activity with lag to calculate the LF date for previous activity. 186 Answers QuestionNo Answers QuestionNo Answers QuestionNo Answers QuestionNo Answers QuestionNo Answers 1 D 1 B 1 D 1 A 1 B 2 C 2 B 2 C 2 A 2 C 3 D 3 C 3 B 3 C 3 A 4 C 4 B 4 C 4 D 4 C 5 B 5 D 5 C 5 B 5 D 6 C 6 A 6 C 6 B 6 B 7 D 7 B 7 D 7 B 7 D 8 C 8 D 8 A 8 C 8 A 9 A 9 A 9 C 9 A 9 B 10 C 10 B 10 D 10 B 10 B 11 C 11 A 11 D 11 C 11 B 12 D 12 B 12 A 12 B 12 C 13 D 13 D 13 D 13 D 13 C 14 C 14 C 14 B 14 C 14 D 15 B, C, D, A 15 C 15 B 15 D 15 A Set 5 Set 1 Set 2 Set 3 Set 4 187 Answers QuestionNo Answers QuestionNo Answers QuestionNo Answers QuestionNo Answers 1 B 1 B 1 C 1 D 2 D 2 D 2 D 2 C 3 B 3 C 3 C 3 B 4 C 4 D 4 C 4 D 5 D 5 C 5 B 5 A 6 A 6 B 6 B 6 D 7 B 7 B 7 B 7 B 8 D 8 A 8 A 8 B 9 B 9 D 9 C 9 D 10 C 10 C 10 B 10 D 11 C 11 D 11 B 12 D 12 B 12 D 13 C 13 C 13 A 14 A 14 B 14 B 15 B 15 A 15 C 16 C 17 D 18 A 19 D 20 B Set 9 Set 7 Set 6 Set 8 188