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| 1. (TCO B) Estimating Procedures (a) You are the project manager for a new high rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton. (Note there are 3 data points in for this estimate.)What is the expected price of the material? (b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons, and as much as 56 tons might be required.What is the expected amount of the material needed for the project? (c) Using the estimates from (a) & (b), what is the expected cost for the material over the life of the project using the COMPLEX method?(Points : 30) 2. (TCO B) Contingency Allowance: You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones: ITEMCOST ESTIMATETYPE OF ESTIMATECase$10.00Order of MagnitudeHandset$12.00DefinitiveLabor$2.00DefinitiveSpeaker$2.50BudgetMouthpiece$5.50BudgetAntenna$1.70DefinitiveKeypad$3.00Order of MagnitudeCircuit boards (handset)$6.50BudgetCircuit boards (base unit)$8.50DefinitiveBattery$1.20Order of MagnitudeCharger$16.00Order of MagnitudeTotal$68.90NA The estimating department currently defines estimate accuracy as follows: Order of Magnitude-25%, +75%Budget-10%, +25%Definitive-5%, +10% (a) What contingency cost budget do you recommend for the product? (b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 75%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates. (Points : 30) 3. (TCO C) Work Breakdown Structure WBS Eurocash has decided to develop a mutual fund comprised almost entirely of East European companies with a high growth potential. The process of developing a new mutual fund begins with concept development, which includes establishing a clear definition of the project’s objectives that is agreed upon by senior management and developing a marketing strategy. · A business analysis is then performed that includes assessments of market feasibility, internal feasibility (budgetary resource requirements), and regulatory feasibility.· If the proposed fund passes the business analysis, the fund design is developed.· The design process consists of product design, service design, internal review and authorization, and SEC registration (assuming a U.S. market).· As the design process nears completion, generally recognized as a positive preliminary review by the SEC, employee training is performed.· After completion of the employee training and final regulatory approval, the product is launched, and post-launch reviews are conducted at predetermined intervals. Prepare a work breakdown structure (WBS) for this project with activities corresponding to a two level task and sub-task hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified. (Points : 30) 4. (TCO A) Budgeting processes and techniques A company builds custom yachts for the high-end boating market. They develop and build these custom designs as a single individualized unit. The orders are generated by the marketing and sales department with help from the owners, who participate in the management of the company. Each new order is assigned to a project team which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects. As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay. What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work. (Points : 30) |
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| 1. (TCO C) Schedule Crashing Using the network below and the additional information provided, find: (a) The crash cost per day per activity. (b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity. (c) What is the additional cost to crash the project? Critical path = B-C-D = 14 ActivityNormal timeNormal total costCrash timeCrash total costA53003380B32501330C64004700D51503250(Points : 30) 2. (TCO E) Responsibility Allocation Matrix Projects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule. (a) Why is the RAM such an effective tool for Project Managers? (b) What are some of the typical responsibilities assigned on a RAM? (Points : 30) 3. (TCO E) Resource Allocation/Leveling The following data were obtained from a project to design a new software package:ActivityDurationPredecessorsPersonnel / CostA3 days–1 Systems Analyst/$260 dayB6 days–3 Programmers/$200 day eachC4 daysA3 Programmers/$200 day eachD2 daysC2 Hardware specialists/$230 day eachE3 daysA1 Systems Analyst/$260 dayF2 daysD, E1 Test Engineer/$300 day Personnel AvailableQuantitySystems Analysts1Programmers3Hardware Specialists2Test Engineers2 The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at an 80% cost premium if needed. (a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved. (b) Note that operations can be split if required: what is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 30) |
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| 1. (TCO G) Estimate At Completion forecast (EAC) A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below: EVPV AC BudgetBCWP- BCWSSVSPI- ACWPCVCPIA$8,500$8,500$8,500$ -1.00$7,000$1,5001.21B$15,000$15,000$15,000$ -1.00$13,000$2,0001.15C$6,800$2,530$2,700($170)0.94$4,000($1,470)0.63D$18,000$900$3,000($2,100)0.30$1,200($300)0.75E$16,000$0$0$ – $0$ – Project:$65,00026,93029,200($2,270)0.92$25,200$ 7301.07 (i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget. (ii) Calculate EAC considering that the project will continue to perform as it has to date. (iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments.(Points : 30) 2. (TCO D) PMIS and cost accounting An Earned Value system can be a very effective way to monitor projects. However, Earned Value Analysis requires a Project Cost Accounting System (PCAS). (a) What are some of the benefits of PCAS? (b) What are some of the software solutions for establishing a PCAS? (Points : 30) 3. (TCO F) Earned Value The following data were obtained from a project to design a new software package:ActivityDurationPredecessorsBudgeted CostA3 Days–$8,320B6 Days–$11,740C4 DaysA$11,550D2 DaysC, B$7,850E3 DaysA$10,750F2 DaysD, E$8,600 At the end of day 5, the status of the project is as follows:Activity% CompleteActual CostA100%$7,200B50%$6,370C25%$8,250D0%$0E80%$8,560F0%$0(a) Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E. (b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path.(Points : 30) |
