Pm592 Quiz1

November 28, 2017 Project Management

1. Question :(TCO B) Three-point estimate: The SuperFlyer Corporation is developing a revolutionary flying disc. The new toy can fly straight over a great distance, which is exciting by itself. However, this disc will also return to the owner in response to their voice! Because this is an advance over anything that this company has done before, estimating the amount and cost of the hi-tech materials are difficult. The project manager recommends using a range estimating process to develop an estimate. The values below are submitted by the project team. Current estimates for cost of material are as follows:

Optimistic cost of smart resin:$6. 00per lb Most likely cost of smart resin:$8. 00per lb Pessimistic cost of smart resin:$8. 50per lb Current estimates for total material requirements are as follows: Optimistic quantity:21 lb/ 100 units Most likely quantity:24 lb/ 100 units Pessimistic quantity:30 lb/ 100 units (a) What is the expected price of the material per pound? (b) What is the expected amount of material needed for 100 units? (c) What is the expected cost for 100 units using the Simple Method? Student Answer:a) Expected price of the material per pound: 6+4(8)+8. /6= $7. 75 b) The expected amount of material needed for 100 units: 21+4(24)+30/6= 24. 5 lb/ 100 units c) The expected cost for 100 units using the simple method: $7. 75(100)= $775 Comments: 2. Question :(TCO A) Single-project budgeting must fit into the overall budgeting process of the organization and the company as a whole. As a project manager for one of your company’s projects, you have been asked to provide a brief description of the top-down approach to the budgeting process. Explain the three basic steps in the top-down budgeting approach by dentifying the organizational level (Upper Management, Functional Management, and Project Management) and type of budget prepared at each step. For each type of budget, explain why it is used at its level. Student Answer:Step1 : Upper Management : The type of budget prepared is strategic budget based on organizational goals, constraints, and policies. Step2: Functional Managers: The type of budget prepared is a Mid-range budget for each functional unit Step3: Project Managers: The type of budget prepared is detailed budgets for each project, including the cost of labor, material, capital equipment, subcontracting, overhead and contingencies.

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Comments: 3. Question :(TCO B) You have been requested to provide a contingency estimate for a project involving the manufacturing of a new television. You are provided with the following component and labor estimates, together with the type of estimate: DescriptionEstimated base costType of estimate Plasma Screen$780. 00Order of Magnitude Tuner$87. 00Definitive Sound circuits$34. 00Definitive Controls$56. 00Order of Magnitude Case$142. 00Budget Labor$385. 00Definitive The target retail price for the new TV is $4,995. 00.

New products are targeted for 125% markup on introduction, so that price and cost reductions can be taken as required by competitive pressure and still keep the product profitable. Your estimating department currently defines estimate accuracy as follows: Order of Magnitude-25%, +85% Budget-10%, +25% Definitive-5%, +10% (a) What cost budget do you recommend for the product? (b) Will the project be approved? (c) What would you recommend to reduce or eliminate any contingency from the budget? Student Answer:a) Cost budget recommended for the product: OM= +85% Budget= +25% Definitive +10% 1. 5($780+$56)+1. 25($142)+1. 1($87+$34)+$385 = $2185. 7 b) $2185. 7 at 125% markup (2. 25*$2185. 7) = $4917. 825 The project will be approved because the marked-up retail price is bellow the retail target price c)We need to firm up estimates for order of magnitude and budget items, and revise estimates before project can proceed. Comments: 4. Question :(TCO A) We are now in week 3 and have only discussed the plan. It is as if we will never get to work and make this project happen. Why are we taking so much time to develop the project plan, and how does that fit with monitoring and control?

For full credit you must provide specific reasons and justifications, not just generalities. Student Answer:The key to a successful project is in the planning. Creating a project plan is the first thing we should do when undertaking any kind of project. A project plan can allow a Project Manager to complete a project within a specified timeline and a specified budget. Reaching these important goals, will make the project customer happy and help the organization to build a good relationship with the customer for future projects. Project planning is fundamental in order to avoid failure and disappointment.

In project management, effective planning is absolutely required if the individual or group wishes to deliver a finished project on time and on budget. From a Project Management article (http://www. brighthub. com/office/project-management/articles/40904. aspx) I read that during the project planning phase, plans are developed in the form of project baselines for schedule, cost, scope, quality and risks, all of which are components of the overall project plan. This gives the Project Manager basis for monitoring project progress and upon which to base ecisions necessary for managing changes needed to help get the project back on track. Comments: 5. Question :(TCO A) A consumer electronics firm is planning an expansion into Milwaukee. Generally, the firm prefers to remodel large existing tenant spaces to suit their needs. After a site is selected from several alternatives, the corporate architect develops plans by reviewing the suitability of existing structure and utilities. A modification and demolition plan is then developed. Interior finish plans are then developed from corporate standards and adjusted to each site.

Building permits are handled by the general contractor (GC). The firm uses a GC for all of its construction in a region. The GC hires local subcontractors and provides on-site construction supervision. As construction begins, the firm also begins to assemble a new management team from existing management staff, making an attempt to use only staff that has an interest in relocating. Sales staff is hired locally. When construction is approximately six weeks from completion, inventory is ordered. 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. Student Answer:LEVEL WBS ELEMENTS NAME 1 1 Modification and Demolition 1 1. 1 Wall modification and demolition 1 1. 2 Floor modification and demolition 1 1. 3 Roof modification and demolition 2 2 Interior finish 2 2. 2 Floor tile 2 2. 3 Electrical output and lights 2 2. 4 Wall and ceiling Painting 2 2. 5 doors and windows installation Comments: * Times are displayed in (GMT-07:00) Mountain Time (US & Canada)


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