Beruflich Dokumente
Kultur Dokumente
PE
MBCQ-724D
(c
)U
Course Design
Advisory Council
Chairman
PE
Dr Parag Diwan
Members
Dr Kamal Bansal
Dean
Dr Anirban Sengupta
Dean
Dr Ashish Bhardwaj
CIO
Dr S R Das
VP Academic Affairs
Dr Sanjay Mittal
Professor IIT Kanpur
Prof V K Nangia
IIT Roorkee
)U
Dr K K Pandey
Print Production
Mr Kapil Mehra
Manager Material
Author
R Mishra
Mr A N Sinha
Sr Manager Printing
(c
All rights reserved. No part of this work may be reproduced in any form, by mimeograph or any other means,
without permission in writing from MPower Applied Learning Enterprise.
Contents
Block-I
Unit 2
Unit 3
Unit 4
Unit 5
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Unit 1
Block-II
Unit 7
Unit 8
Unit 9
Unit 10
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Unit 6
Unit 11
Unit 12
Unit 13
Unit 14
Unit 15
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Block-IV
Unit 16
Unit 17
Unit 18
Unit 19
Unit 20
iv
Block-V
Project Procurement Management ............................................................................ 249
Unit 22
Unit 23
Unit 24
Unit 25
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Unit 21
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Notes
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BLOCK-I
Notes
UNIT
1: PROJECT MANAGEMENT AN
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OVERVIEW
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Introduction
Feasibility Study
UNIT
2: PROJECT IDENTIFICATION &
___________________
SELECTION
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Introduction
___________________
Project Identification
Project Initiation
___________________
Pre-feasibility Study
___________________
Importance of Feasibility Studies
Project Break-even Point
PE
Detailed Contents
Capital Costs
Working Capital
Operating Costs
Product Revenues
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Unit 1
Project Management An
Overview
Notes
Activity
___________________
Draw
up
a
list
of
characteristics that distinguish
___________________
projects
from other activities.
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___________________
After completion of this unit, the students will be aware of the following
topics:
\
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PE
Objectives
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Introduction
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Notes
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Notes
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PE
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Explanation
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Notes
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2.
)U
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Notes
Activity
Give___________________
an example of a project
in each one of the following
___________________
sectors:
(a) ___________________
Manufacturing
(b) Banking
___________________
(c) Marketing
(d) ___________________
R&D
PE
1.
(e) ___________________
Health
(f)
Science
___________________
(g) Nation
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Notes
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2.
Project
Management
Processes
Notes
Activity
___________________
Make
a presentation on the
process
of
project
___________________
management.
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___________________
Project processes
PE
___________________
Process
interactions
Process groups
Customisation
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Project Processes
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)U
Process Groups
Planning
(c
Executing
Controlling
Closing
Let us look at process given in above figure one by one. These are:
Initiating processes
commitment.
___________________
initiate
the
project
and
ascertain
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Notes
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10
Knowledge
Area
Processes
Developing
Project Charter
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Project
Management
Integration
Initiating
Process
Group
Project Scope
Management
Project Time
Management
Developing
Preliminary
Project Scope
Statement
Planning Process
Group
Executing
Process
Group
Monitoring
and
Controlling
Process Group
Develop Project
Management
Plan
Direct and
Manage
Project
Execution
Monitor and
Control
Project Work
Scope Planning
Closing
Process
Group
Close
Project
Integrated
Change
Control
Scope
Verification
Scope Definition
Scope WBS
Scope Control
Activity
Definition
Schedule
Control
Activity
Sequencing
Activity Resource
Estimating
Activity Duration
Estimation
Schedule
Development
Project Cost
Management
Cost Estimating
Cost Control
Project Quality
Management
Quality Planning
Perform
Quality
Assurance
Perform
Quality
Control
Project Human
Resources
Management
Human Resources
Planning
Acquire
Project
Team
Manage
Project Team
Cost Budgeting
Develop
Project
Team
Contd...
Project
Procurement
Planning
Plan Purchase
and Acquisitions
Information
Distribution
11
Performance
Reporting
Notes
Manage
Stakeholders
Plan Contracting
Request
Seller
Responses
Contract
Administratio
n
Contract
Closure
Select
Sellers
Risk Management
Planning
Risk
Identification
Qualitative Risk
Analysis
Quantitative Risk
Analysis
Risk Response
Planning
Process Interactions
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Risk
Monitoring
and Control
)U
Customisation
(c
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PE
Project Risk
Management
Project
Communication
Management
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12
Notes
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1.
2.
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PE
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Summary
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After going through this unit, you must have realised the
importance of project management in business applications and
the scope of project planning. Also, you are now familiar with the
various phases involved in project management.
Keywords
Project Budget: The amount and distribution of money allocated
to a project.
2.
3.
4.
5.
6.
)U
1.
Further Readings
Books
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Notes
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13
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Web Readings
www.col.org/SiteCollectionDocuments/SuccessProjMgt.pdf
www.pma-india.org/- Trinidad and Tobago
www.nickjenkins.net/prose/projectPrimer.p
www.mpug.com/Pages/WhatisProjectManagement.aspx
www.mindtools.com/pages/main/newMN_PPM.htm
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Notes
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14
Unit 2
15
___________________
Objectives
Project Identification
Project Initiation
Pre-feasibility Study
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PE
After completion of this unit, the students will be aware of the following
topics:
\
Notes
Activity
___________________
Make
an assignment on
Project Identification.
___________________
___________________
___________________
___________________
___________________
___________________
Introduction
)U
In the previous unit, you have studied about the concept and
meaning of project management and also studied its importance in
todays competitive world. Identification and selection of a project
is one of the crucial and significant steps in the project
management process. This is an important stage that affects the
whole process including the long run sustainability of the project
after completion and transferring to make it operational. Project
ideas are vague in ab initio and they need to be realised through
proper planning and scheduling on the employability of resources.
Project ideas are usually balanced with the needs or demands of
the business, economy, or community perspectives. All those units
involved in dreaming for such project ideas need to carefully design
and draft their strategic plans to commensurate with the larger
interests.
Project Identification
(c
Notes
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___________________
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___________________
___________________
Project ideas are mere day dreams unless appropriate steps are
considered to make them see the light of the day. Project ideas are
usually the brain child of a forced situation or assumed by the
generator, yet it will be under incubation till a comprehensive
framework developed around the clouded idea. The process of
project identification can broadly be divided into four stages:
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PE
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16
Notes
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17
listed for further examination. Such short listed ideas only will be
considered while promoting pre-feasibility studies.
)U
(c
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Notes
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18
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Following are some of the sources from which new project ideas
may emerge.
19
)U
Import/Export Statistics
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Notes
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PE
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Notes
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20
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Price Trend
___________________
Price of the product is a major driving force for any project to take
off. Fundamentally every organisation will have twin focus, profit
maximisation and cost minimisation. From both the angles it is the
price that gets determined and thereby guides the project initiator
on the functionality. If the general price level is found to be rising
over the past few years and a specific item is having a steeper rise,
that would indicate a huge gap in the demand-supply and can be
thought as a project opportunity. According to one of the market
structures, like monopoly, this situation arises and we know that
market demand is not met in full and a good scope to operate to fill
the gap.
___________________
___________________
(c
)U
___________________
2.
Project Initiation
21
Notes
Activity
___________________
Provide
a narrative description
of this problematic situation in
___________________
Project
Initiation and then
identify or solve the problem.
___________________
___________________
___________________
PE
)U
(c
___________________
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Notes
Evaluate all proposed projects that has been provided by the client
organization or that has been gathered by technical analyst. If
additional information is needed, issue an information request to
the requester. Formulate a case study and assign the nominated
project a new project code. The business case will be examined by a
screening committee with help of management and decide whether
to accept or reject a nominated project. When a business case is
accepted, the proposed project is forwarded for ranking and
selection. When additional information is received on such
proposed project, the case study may be revised based on the data
and appropriate decision would be taken on the final selection.
PE
22
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23
Evaluate Resources
)U
True or False:
(c
2.
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1.
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PE
Notes
Project risk
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___________________
Pre-feasibility Study
Notes
Activity
___________________
Collect
recent updates on
Pre-feasibility Study.
___________________
PE
24
Project Description
Description of Market
Notes
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___________________
___________________
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PE
25
the project should be examined. Also, some vital factors vis-vis plant location must be clearly identified such as Labour
(quantity, special skills); Proximity to markets and raw
materials (distance in km); Transportation facilities and costs
(Roads, Railways, Docks and Airways), Water (quantity,
quality, restriction); Miscellaneous issues (personal preference,
competition, tax considerations, environmental controls, etc.)
___________________
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___________________
Cost Estimates
___________________
Profitability Estimation
)U
Miscellaneous
Society/Economic-oriented
(defence, infrastructure
and others)
Competition and
survival
Demands and
preferences quality
New inventions or
innovation quality
(c
Focus
Object
Contd...
___________________
Notes
Activity
___________________
Write
an essay on Feasibility
Studies.
___________________
Scope of
Marketability
___________________
___________________
___________________
___________________
___________________
___________________
___________________
2.
PE
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26
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27
Notes
feasible, further investment in the project idea is completely ruledout. In the third situation, when the project idea is found to be
feasible, the decision-makers can proceed to invest further
resources in pre-investment studies and design development.
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PE
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that the overall costs for plant equipment, labour and raw
material input will be of a certain order.
)U
(c
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Notes
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28
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Technical feasibility
Financial feasibility
Managerial feasibility
Social feasibility or acceptability
Notes
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___________________
___________________
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29
)U
(c
Technical Feasibility
___________________
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___________________
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___________________
Notes
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30
Financial Feasibility
31
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Managerial Feasibility
PE
)U
Social Feasibility
(c
A project may cross all the above barriers mentioned above and be
found very suitable but it will lose its entire creditability, if it has
no social acceptance. Though the social customs, conventions such
as caste, community, regional influence, etc. are creating
hindrance for development of a project, it should avoid all such
social conflicts which will stand on the successful implementation
of the project. For example, considering the interests of the general
public; projects which offer large employment potential, which
channelise the income from less developed areas will stimulate
small industries.
___________________
___________________
___________________
Notes
Activity
___________________
Present
drafts of written
assignments on Project break___________________
even
point and then revise the
drafts which are based on
___________________
other
students comments.
Groups for this activity should
not ___________________
be too large.
___________________
1.
___________________
___________________
(c
)U
___________________
2.
PE
___________________
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32
2.
___________________
Summary
)U
Prepare the feasibility studies of your project and also discuss the
nature of project feasibility analysis.
(c
Notes
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___________________
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1.
33
Keywords
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
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Notes
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34
___________________
___________________
1.
2.
3.
4.
5.
6.
(c
)U
___________________
7.
Further Readings
Books
Web Readings
Notes
___________________
___________________
___________________
___________________
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PE
35
___________________
___________________
http://castle.eiu.edu/a_illia/mis4200/notes/MIS4200Notes4_1.pdf
___________________
http://www.scribd.com/doc/25275840/Project-Identification-andSelection-1
___________________
http://www.law.cornell.edu/cfr/text/44/206.435
http://class-summary.blogspot.in/2009/04/class-39-projectidentificationselectio.html
(c
)U
http://www.bbwarm.whatcomcounty.org/programs/cip/cipprocess
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36
Notes
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(c
)U
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PE
___________________
Unit 3
37
___________________
Objectives
Feasibility Study
Types of Feasibility
)U
Feasibility Study
(c
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Introduction
Notes
Activity
You___________________
and your group members
are required to develop and
write___________________
a feasibility study.
___________________
___________________
___________________
___________________
___________________
has taken due cognisance of the risks associated with its whole
life cycle;
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
38
Notes
___________________
___________________
___________________
___________________
___________________
PE
39
reading the information below will help put the role of the
feasibility study in perspective.
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
40
41
Notes
___________________
___________________
___________________
___________________
Why do another feasibility study when one was done just a few
years ago?
___________________
___________________
___________________
PE
Why not just hire a general manager who can do the study?
)U
We need to buy the building, tie up the site and bid on the
equipment. The reasons given above should not dissuade you from
conducting a meaningful and accurate feasibility study. Once
decisions have been made about proceeding with a proposed
business, they are often very difficult to change. You may need to
live with these decisions for a long time.
(c
___________________
___________________
___________________
Notes
Activity
___________________
Research
the
business
problem or opportunity by
___________________
conducting
a project feasibility
study.
___________________
___________________
___________________
1.
___________________
___________________
___________________
2.
PE
___________________
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42
(c
)U
Feasibility studies are useful tools for testing ideas on paper before
deciding whether to implement them. If a small business is
considering a significant change in its operation such as
marketing a new product, acquiring another business or installing
a new telecommunications system the owner or management
team can evaluate the idea before committing time and money to
it. Conducting a feasibility study is a rigorous process that can
yield valuable information about an organization and its future. If
a feasibility study indicates that an idea has good potential, the
company can proceed with the business planning of how and when
to develop and implement the idea.
Current Situation
The Idea
Feasibility studies force a serious analysis of the idea and perhaps
a first look at aspects of it that might be troubling to the company.
43
Notes
___________________
___________________
___________________
The Competition
___________________
The Impact
)U
(c
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PE
___________________
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___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Future period costs that are expected and can be planned for.
Notes
Activity
___________________
What
kind of final clearances
and
from
whom,
the
___________________
entrepreneurs
are required to
take as soon as the unit goes
into___________________
production?
PE
44
___________________
(c
)U
2.
Types of Feasibility
Feasibility is of the following types:
Technical Feasibility
Managerial Feasibility
Demonstrated management capability and availability, employee
involvement, and commitment are key elements required to
Economic Feasibility
___________________
___________________
___________________
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PE
)U
Cultural Feasibility
(c
Notes
___________________
Financial Feasibility
45
Social Feasibility
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Safety Feasibility
PE
___________________
46
Political Feasibility
(c
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Environmental Feasibility
Often environmental clearance from government and civil society
may prove to be a killer of projects through long, drawn-out
approval processes and outright active opposition by those
claiming environmental concerns. This is an aspect worthy of real
attention in the very early stages of a project. Concern must be
shown and action must be taken to address any and all
environmental concerns raised or anticipated. This component also
addresses the ability of the project to timely obtain and at a
reasonable cost, needed permits, licenses and approvals.
Market Feasibility
This area should not be confused with the economic feasibility.
The market needs analysis to view the potential impacts of market
demand, competitive activities, etc. and market share available.
2.
Notes
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___________________
___________________
___________________
PE
1.
47
___________________
___________________
___________________
___________________
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Summary
)U
(c
Keywords
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
48
___________________
___________________
1.
2.
3.
4.
5.
6.
(c
)U
___________________
Further Readings
Books
49
Notes
___________________
Web Readings
http://www.du.ac.in/fileadmin/DU/Academics/course_material/EP_
05.pdf
___________________
___________________
___________________
PE
https://www.extension.iastate.edu/agdm/wholefarm/html/c565.html
___________________
http://www.dwp.gov.uk/docs/credit-union-feasibility-studyreport.pdf
___________________
http://www.method123.com/feasibility-study.php
___________________
http://nfsmi.org/documentlibraryfiles/PDF/20080212032917.pdf
___________________
___________________
(c
)U
___________________
50
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 4
51
After completion of this unit, the students will be aware of the following
topics:
\
Capital Costs
Working Capital
Operating Costs
Product Revenues
Introduction
)U
Capital Costs
(c
Objectives
(a) ___________________
yearly basis
(b) over life period of the
___________________
project
___________________
PE
Notes
Activity
___________________
Establish
revenues from the
product sales of your project
on: ___________________
Many operating concerns and investors set their goals on ROI (say,
a minimum of 20% per annum pre-tax). The average annual ROI is
the total earnings divided by the specified project life times the
total investment. A 10% increase in capital cost will cause a
corresponding 10% decrease in ROI for a project with a 10-year life
___________________
___________________
___________________
___________________
___________________
___________________
___________________
cycle. A 20% ROI on a project with a 10-year life means that the
project will earn 20% for 10 years, which is 200% on the life of the
project or 100% over 5 years. This is equivalent to a pay out period
of 5 years.
Table 4.1: Major Factors Affecting Project Profitability
___________________
___________________
S. No.
___________________
___________________
Notes
Factor
Probable Accuracy
of Estimate
Prediction
Possible Effect
on Project
Profitability
PE
52
1.
Good
Minor
2.
Engineering costs
Good
Minor
___________________
3.
Good
Major
___________________
4.
Construction Cost
Fair
Major
5.
Fair
Intermediate
6.
Construction Duration
Good
Minor
___________________
7.
Working Capital
Fair
Major
8.
Operating Costs
Fair
Major
9.
Poor
Major
10.
Cost of Feedstocks
Poor
Major
11.
Cost of Utilities
Fair
Major
12.
Poor
Major
13.
Poor
Major
14.
Poor
Minor
15.
Taxation Rates
Poor
Major
16.
Rates of Inflation
Poor
Major
17.
Interest Rates
Fair
Major
18.
Poor
Major
19.
Poor
Intermediate
20.
Government Influences
Poor
Major
(c
)U
___________________
Major
Classification
Detail Items
Site
2.
Buildings,
Foundations and
Structures
3.
Building Services
4.
Process
Equipment
5.
Non-Process
Equipment
6.
Process
Auxiliaries
7.
Utilities
8.
Offsite Facilities
9.
Engineering Costs
10.
Construction
Costs
11.
Misc. Items
Notes
___________________
___________________
___________________
___________________
___________________
)U
PE
1.
53
(c
2.
___________________
___________________
___________________
___________________
___________________
Working Capital
Notes
Activity
1. ___________________
List out factors that could
affect the product revenues
___________________
and the probability of their
occurrence.
___________________
2. Establish profitability of
your project. What could
___________________
be reasons for lower
profitability?
___________________
___________________
S. No.
___________________
1.
___________________
___________________
___________________
2.
3.
4.
5.
6.
7.
8.
9.
PE
54
Account
Period Months
0-1
Feedstock Inventories
0.5 - 1
0.5 - 1
Utilities
1 to 2
Manufacturing Consumables
1 to 2
Product Inventories
1 to 3
1 to 2
Taxes Payable
4 to 6
Freight Payable
0.5 - 1
(c
)U
2.
Operating Costs
Table 4.4 lists the typical items that go into the make-up of
operational costs. These are costs which, in general, are
proportional to the plant throughput. They are necessary to run
the plant.
The major operating costs of a process plant are the costs of
feedstock, raw materials, utilities and other consumables. It is not
unusual for the annual cost of feedstock and utilities for a process
S.
No.
1.
Major
Classification
Materials
Notes
___________________
___________________
___________________
___________________
___________________
PE
55
Detail Items
2.
Labour
3.
Plant Overheads
Marketing
5.
Distribution
6.
General, Overheads
and Administration
7.
Financial
)U
4.
(c
2.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
The key objective of the project is to earn revenue from the sale of
the products. For the project to be successful there must be a
secure market. The main features that marketers will attempt to
establish are (1) Is there a demand for the products and will this
continue or preferentially increase over the life of the project? and
(2) Will the price of the products remain stable or increase over the
life of the project?
(c
)U
___________________
Product Revenues
Notes
Activity
List___________________
out economic factors
those could affect profitability
of ___________________
your project. Establish
their trend of changes based
on ___________________
the analysis of data of
recent previous years.
___________________
PE
56
Economic Factors
Government Influences
2.
)U
1.
(c
Notes
Activity
List ___________________
out factor those could
affect econometric model of
your___________________
project. Check out those
factors that have greatest
___________________
effect
on profitability of your
project.
___________________
___________________
PE
57
___________________
___________________
___________________
___________________
___________________
Row 1: Average Inflation Rate, per cent. This row shows the
predicted rate of annual inflation for the entire project life of
13 years.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
General Factors
Notes
___________________
___________________
PE
58
___________________
No.
Year No.
Design
10
11
12
13
Final
Year
Value
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
1013
Value
GENERAL FACTORS
1
7.5
8.5
9.5
10
10.5
11
10.5
10
9.5
9.5
1.03
1.061
1.101
1.145
1.193
1.247
1.306
1.372
1.444
1.523
1.603
1.683
1.763
100
60
70
80
90
100
100
100
100
100
100
Land Cost $M
20
20.6
Plant Cost $M
250
51.5
79.57 110.07
28.62
Working Capital $M
186.15
456.15
72.1
1.847
(c
)U
CAPITAL COST
35.24
44
0 125.42
23.25
25.31
27.5
30.1
14.6
12.75
13.1
13.61
14.04
299.93
23.25
25.31
27.5
30.1
14.6
12.75
13.1
13.61
14.04
379.17
27.3
28.67
30.1
31.6
33.1
34.04
36.5
38.41
40.33
46.13
455 477.75 501.44 526.72 553.06 580.71 609.74 640.23 672.24 705.05
706.86
OPERATING COSTS
Cost of Feed $M
26
455
26
10 Utilities Power $M
2.52
2.12
2.43
2.75
3.09
3.46
3.64
3.84
4.04
4.24
4.44
4.44
11 Utilities Water $M
0.53
0.44
0.51
0.57
0.64
0.72
0.76
0.8
0.84
0.88
0.93
0.93
12 Maintenance $M
10
8.43
9.63
10.91
12.26
13.72
14.44
15.23
16.03
16.83
17.63
17.63
13 Misc. Materials $M
15
12.64
14.45 1`6.36
18.39
20.57
21.65
22.85
24.04
25.25
26.45
26.45
14 Plant Labour $M
2.28
2.69
3.13
3.6
4.11
4.33
4.57
4.81
5.05
5.29
5.29
15
9.16
9.55
9.98
10.45
10.97
11.55
12.16
12.82
13.47
14.1
14.1
520.05
0 516.07 544.31
815.03
33.5
33.5
35.18
36.93
38.78
40.72
42.76
44.89
47.14
49.49
51.97
51.97
30.15
30.15
31.43
32.85
34.41
36.13
38.02
40.11
42.22
44.33
46.44
46.44
345.89
510.4
6
536
536
53.86
Administration $M
REVENUES
19 Product A Revenue $M
20 Product B Price $/BBL
32
56.42
56.42
21 Product B Revenue $M
196
0 134.62 163.73 195.54 230.43 268.84 292.95 298.51 314.18 329.89 345.56
345.56
637.54
0 606.23 648.19 692.89 740.93 793.01 850.57 895.27 941.18 988.24 1036.3
9
1036.39
36.63
38.19
163.8 129.99
39.91
90.29
41.8
47.4
43.89
46.2
48.74
51.3
FINANCIAL PICTURE
24 Cumulative Cash Flow $M
-72.1
- -151.4 -43.31
151.67 261.74 325.61 244.98
81.39
1398.91
-70
- -33.16
142.96 237.79 284.45 205.29 121.41
757.47
26 Annual Depreciation $M
22.5
22.5
22.5
22.5
22.5
22.5
22.5
22.5
22.5
22.5
22.5
250
250
250
250
227.5
205
182.5
160
137.5
115
92.5
70
47.5
25
25
94.99
67.66
81.3
96.39 113.16
1384.93
94.99
59.11
68.2
77.29
86.63
944.92
20.02
12.96
14.95
16.94
18.99
21.15
23.97
24.29
24.52
24.66
24.73
20.72
Contd...
59
31 Loan Interest/Repayment $M
45
45
-257.9
45
45
- -79.89 -10.38
193.81
257.9 193.81
45
45
45
45
45
45
45
45
45
250
1760.91
79.89
10.38
30
60
100
150
210
250
290
15.47
11.63
5.99
0.03
2.55
5.4
9.5
15
22.05
27.5
30.43
32
32.53
210.91
55.85
65.3
70.94
171.2
184.4
1039.27
46.8
52.36
54.3
57.45
77.94
95.55
687.05
37.44
41.97
43.44
45.91
61.63
76.64
375
45
76.88
320 342.47
81.37
84.5
375
54.96
)U
Operating Costs
Row 8: Feed Unit Cost, $BBL. This is the contractual feed for
the 10 year period. The initial cost is $26/bbl subject to a 5%
increase each year. The cost in year N is $26x1.05^N.
(c
___________________
___________________
___________________
PE
___________________
___________________
Capital Cost
z
Notes
Row 9: Cost of Feed, $M. This value is the barrel per day
(50,000) times the number of operating days in the year (350)
times the feedstock unit cost. Since the contract requires that
the whole 50,000 barrels be taken, this number is not
multiplied by the operating rate.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
60
Row 14: Plant Labour, $M. Plant labour has been estimated at
100 persons, over all, at an average cost of $30,000 per year.
Plant labour is subject to escalation. At lower plant operating
rates, plant labour can be reduced slightly by the 0.8 power.
The equation is 100x30,000xCEFx(POR/100)^0.8.
Row 16: Total Operating Cost, $M. This is the sum of rows 8
through 15.
Revenues
z
)U
Financial Picture
(c
61
Notes
___________________
___________________
___________________
___________________
___________________
PE
Row 25: Discounted Cash Flow, $M. The discounted cash flow
is the actual cash flow in row 24 converted to present day
values. The annual values in row 24 are divided by the
compounded escalation factor (CEF).
___________________
___________________
___________________
___________________
___________________
62
___________________
___________________
z
Row 28: Actual Annual Profit, $M. This value is the total
annual revenues (Row 23) minus the total annual operating
costs (Row 16) and minus the annual depreciation (Row 26).
Row 30: Discounted Annual ROI, %. This row gives the value
that is of prime interest to investors. The discounted annual
profit (Row 29) is divided by the total initial design capital cost
to give the ROI. The final value gives the average over the
plant life.
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Since both land cost and working capital are residual, this
value equates to plant cost minus scrap value divided by plant
life. There are different methods of calculating depreciation.
This is the straight line method.
Notes
Loan Alternative
The econometric model up until now has assumed that all the
capital needed will be provided by the XYZ company. An
alternative to this is to raise a loan with fixed interest rate over
the project life including the construction period. The loan
repayment will be fixed and can be considered as operating cost.
The balance of any profit and the residual cost are then available
to the company and can be related to a lower investment cost.
To check out the economics of this alternative, a case is assumed
such that $250M is taken as loan over a 13 year period. An
additional $125M is raised as capital by the XYZ shareholders.
z
Row 32: Cumulative Cash Flow, $M. This is the same as row
24 except the project starts with $375M in hand and $45M in
interest is paid out each year.
)U
(c
Notes
___________________
___________________
___________________
___________________
___________________
PE
63
to pay off the loan. To compare the loan alternative with the
base case, the final cash retained equals the loan plus
investment capital, leaving the residual value the same as the
base case.
1.
2.
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Modify
econometric model of
your project by assuming
debt___________________
equity ratio of 1:1, i.e.
project financing through 50%
loan___________________
and 50% equity.
64
___________________
___________________
Case C. Operating rate runs 10% lower than hoped for in first
five years.
___________________
___________________
___________________
___________________
PE
___________________
Now that the econometric model has been set up, unlimited What
if simulations may be carried out to see the effect on the bottom
line. The inter-meshing equations on the spread sheet instantly
adjust all related values in the columns and rows to show the new
picture. To illustrate this, following five "what ifs" are simulated.
(c
)U
2.
Summary
65
___________________
___________________
___________________
___________________
___________________
PE
Keywords
Notes
___________________
___________________
)U
2.
3.
4.
(c
1.
5.
6.
___________________
___________________
___________________
Notes
Further Readings
66
Books
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
PE
___________________
Web Readings
(c
)U
http://wwwpersonal.umich.edu/~franzese/SpatialEconometricMode
ls.Proposal2.ProjectDescription.pdf
http://www.econ.cam.ac.uk/emeritus/pesaran/nonleoa.pdf
http://www.healthmetricsandevaluation.org/research/project/quant
itative-analysis-feasibility-achieving-zero-preventable-child-deaths
http://www.google.com/url?sa=t&rct=j&q=Project+FeasibilityEconometric+Model&source=web&cd=13&cad=rja&ved=0CDUQFj
ACOAo&url=http%3A%2F%2Fwww.sajhrm.co.za%2Findex.php%2
Fsajhrm%2Farticle%2Fdownload%2F96%2F96&ei=HCh6Uc3EE4
TzrQf3moDoCg&usg=AFQjCNHVBk28MHby1K7wpk3SvIDp
tseA&bvm=bv.45645796,d.bmk
http://pareto.uab.es/mcreel/econometrics/econometrics.pdf
http://mirror.cict.fr/cran/web/packages/plm/vignettes/plm.pdf
Unit 5
67
Case Study
___________________
___________________
___________________
Objectives
___________________
___________________
The year is 2005 and times are good. The business environment is
vibrant and the economy is strong. Large businesses are
committing large amounts of capital and resources to implement
new strategies, establish new capabilities, and open new markets.
It was not different at PintCo, where Jack works as a Director of
Customer Relationship Management.
)U
(c
___________________
PE
After analysing this case, the student will have an appreciation of the
concept of topics studied in this Block.
Notes
Over the course of the next few weeks, Jack took over the
Customer Master File project, met with key project team
members, and conducted dozens of interviews with key
stakeholders. It was only a few weeks since Brandon had handed
the keys to him for this troubled project, and now Jack was back
in Brandon's office to give a rather stark update on the situation.
"Brandon, I've talked to the project team and to key stakeholders,
and I know why this project is in trouble," Jack started. "If you
Contd...
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
truly want me to turn this project around, I'll need your support
to make some critical changes."
Notes
PE
68
(c
)U
"I'm not going to sugar coat this for you Brandon," Jack explained.
"I've seen this situation far too often in my career, and if we don't
change the situation this project will fail in glorious fashion."
Foundations for Success
Brandon knew that what Jack said was true, and he also knew
that changing the situation would be difficult, painful, and
potentially costly. He reluctantly agreed with Jack, and together
they laid out several key changes.
"Thanks for working with me on this Brandon," Jack said. "Just
to confirm, let me summarise the changes that we agreed to
implement:
z
Celebrations
"Thank you," Jack smiled and answered, "but you know it was
pretty touch and go after we met in your office to plan the project
turnaround. There were a lot of unhappy campers and several of
them didn't like the idea of being assigned 100% to the project if
you recall."
)U
Question:
Analyse the case and write down the case facts of your study.
Source: http://www.projectsmart.co.uk/a-tale-of-two-projects.html
(c
Notes
___________________
___________________
___________________
___________________
___________________
PE
Six months later, Jack ran into Brandon in the break room as
they both were angling for their morning coffee refill. "Jack!",
Brandon shouted while patting Jack on the back.
"Congratulations on getting the Customer Master File project into
pilot. By all accounts, it has been a resounding success!" Brandon
crowed.
69
Brandon and Jack both agreed with the plan. Jack knew that
some of these changes would be unpopular, but without them the
project would be doomed. He left Brandon's office with a sense of
relief and apprehension. There was still a lot of hard work and
heavy lifting yet to be done.
___________________
___________________
___________________
___________________
___________________
70
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
71
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
BLOCK-II
72
Notes
UNIT
6: PROJECT PLANNING
___________________
z
Introduction
___________________
z
Meaning of Project Planning
___________________
z
Need of Project Planning
Detailed Contents
Introduction
Contingency Definition
___________________
Project Life Cycle
___________________
UNIT
7: PROJECT COST AND RISK
MANAGEMENT
___________________
z
Introduction
___________________
z
Types of Project Estimates
___________________
Fixed Capital Cost Estimation
Introduction
(c
)U
PE
Unit 6
73
Project Planning
Objectives
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Notes
Activity
___________________
Develop
the activity for your
organisation which must be
___________________
related
to the achievement of
some planned objective.
___________________
___________________
___________________
___________________
___________________
___________________
Introduction
)U
(c
___________________
___________________
___________________
___________________
___________________
Notes
Identifying deliverables
PE
74
___________________
___________________
___________________
___________________
(c
)U
___________________
75
Notes
Activity
___________________
Critically
examine the situation
when the need of project
___________________
planning
arises.
___________________
___________________
___________________
PE
2.
___________________
___________________
___________________
___________________
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
The planning and scoping should be such that the project manager
can assess every stage of the project and the quality of the
deliverable of the project at every stage. First, let us list the steps
involved in project scoping.
These steps include:
z
(c
)U
___________________
Notes
PE
76
boundary
values
and
77
True or False:
2.
)U
Phase 3:
Project
Planning
Phase 4:
Project Execution
and Control
Phase 5:
Project
Closeout
Let us now try to understand the project life cycle with reference to
the process flow mentioned above.
Project Origination
(c
___________________
___________________
___________________
Phase 2:
Project
Initiation
___________________
___________________
Phase 1:
Project
Origination
___________________
PE
1.
Notes
Activity
___________________
Prepare
a
presentation
showing the Project Life
___________________
Cycle.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Project Initiation
Project Planning
(c
)U
___________________
Notes
PE
78
Project Closeout
79
S
___________________
___________________
___________________
___________________
___________________
___________________
___________________
2.
)U
1.
After completing the project scoping, you can start your project
plan. Project planning involves three processes as shown in the
figure 6.2.
The
identification
process
(c
Notes
Activity
___________________
Make
an assignment on the
process of Project Planning.
___________________
PE
The review
process
Project
Planning
Process
The analysis
process
___________________
Notes
___________________
___________________
___________________
80
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Deciding how the task, the effort and the defects are to be
tracked, what tools to be used, what reporting structure and
frequency will be followed at various stages.
)U
(c
81
Notes
___________________
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Write
an essay on Work
Breakdown Structure.
___________________
PE
82
___________________
(c
)U
2.
83
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
)U
(c
Notes
other than a grouping under the key stages. It is not time based.
There is no timescale on the drawing.
___________________
___________________
___________________
True or False:
1.
___________________
___________________
___________________
___________________
___________________
___________________
2.
PE
___________________
84
Summary
(c
)U
Keywords
85
___________________
___________________
___________________
___________________
___________________
PE
Notes
)U
2.
3.
4.
5.
6.
(c
1.
___________________
___________________
___________________
___________________
___________________
Notes
Further Readings
86
Books
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
PE
___________________
Web Readings
(c
)U
http://www.ee.ed.ac.uk/~gerard/Management/art8.html
http://www.mindtools.com/pages/main/newMN_PPM.htm
http://www.projectsmart.co.uk/project-planning-step-by-step.html
http://searchcrm.techtarget.com/definition/project-planning
http://www.businessballs.com/project.htm
Unit 7
87
Notes
Activity
___________________
Sub-divide
your project into its
units or areas. Apply the
___________________
common
code of accounts to
each sub-division.
___________________
___________________
After completion of this unit, the students will be aware of the following
topics:
\
___________________
PE
Objectives
___________________
___________________
___________________
___________________
___________________
Introduction
)U
(c
Notes
Activity
___________________
Prepare
cost estimate of each
unit of your project in line
with___________________
Table 7.2. Prepare your
project total cost estimates.
___________________
88
Fixed capital
___________________
Working capital
___________________
Operating cost
___________________
___________________
___________________
PE
___________________
___________________
(c
)U
2.
Project Subdivisions
89
___________________
13 Electrical Facilities
___________________
14 Fuel Facilities
15 Flare & Blowdown Facilities
16 Waste Disposal Facilities
22 Distribution Systems
)U
Code of Accounts
Equipment
A1
Heaters
A2
A3
A4
Rotating Equipment
Bulk Materials
B1
Civil Works
Buildings
B3
Piping
B4
Electricals
B5
Instrumentation
(c
B2
B6
Protective Coatings
Services
C1
Home Office
C2
Construction
C3
Miscellaneous
___________________
___________________
___________________
PE
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
When each unit has been estimated in this way, then the estimate
for the total project is the sum of the unit cost estimates. This can
be assembled in a matrix as shown in Table 7.4.
PE
90
Table 7.3: Project Code of Accounts for Each Unit or Area of the Project
Acct
Description
Equipment
A1
Heaters
A2
A3
A4
Rotating Equipment
Bulk Materials
(c
)U
Sub-Total
B1
Civil Works
B2
Buildings
B3
Piping
B4
Electricals
B5
Instrumentation
B6
Protective Coatings
Sub-Total
Services
C1
Home Office
C2
Construction
C3
Miscellaneous
Sub-Total
Total
Acct
Description
Process plant
Utilities
&
Services
Storage
&
Transport
Civil
Works
01 02 03 04 11 12 13 14 21 22 23 24 31
Misc.
Total
32 33 41 42 43
Acct Description
A
Equipment
A1
Heaters
A2
A3
91
Rotating Equipment
Sub-total
Bulk Materials
B1
Civil Works
B2
Buildings
B3
Piping
Notes
___________________
___________________
B4
Electricals
B5
Instrumentation
B6
Protective Coatings
___________________
___________________
Sub-total
___________________
Services
C1
Home Office
C2
Construction
C3
Miscellaneous
PE
___________________
___________________
Sub-total
Total
Estimate Accuracy
)U
Having prepared the unit and overall project estimates, the next
question is "What is the accuracy?" A higher level of accuracy may
be expected than is realistic. However, if the accuracy probability
is assessed by a formal analytical procedure, then it will be more
likely that a realistic contingency will be set.
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
92
(c
)U
2.
93
Notes
Activity
___________________
Write
down the risk factors
in cost estimates of your
___________________
project.
___________________
___________________
___________________
PE
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
94
Probability
In the above Figure 7.3, the highlighted point shows the maximum
impact area of a project life cycle.
95
Notes
___________________
___________________
___________________
___________________
True or False:
1.
2.
Summary
)U
(c
___________________
PE
Keywords
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
2.
3.
4.
5.
6.
(c
)U
___________________
Notes
PE
96
Further Readings
Books
97
Notes
___________________
___________________
___________________
Web Readings
___________________
___________________
PE
http://www.rdec.gov.tw/public/attachment/8112510475771.pdf
http://www.reading.ac.uk/web/FILES/innovativeconstructionresear
chcentre/icrc-31-cProjectcostoverrunsandriskmanagementARCOM2002.pdf
___________________
___________________
http://www.wbdg.org/project/riskmanage.php
___________________
http://www.projectrisk.com/white_papers/Project_Cost_Risk_Analy
sis.pdf
___________________
http://www.palisade.com/downloads/pdf/Project_Cost_Risk_Analysi
s_and_Risk_Prioritizaton_using_the_Risk_Driver_Method.pdf
(c
)U
http://www.phe.gov/about/amcg/toolkit/Documents/riskmanagement.pdf
___________________
98
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 8
99
___________________
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Contingency Definition
___________________
___________________
Objectives
Notes
___________________
___________________
___________________
___________________
Introduction
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Contingency Definition
(c
)U
___________________
Notes
Activity
___________________
Write
a short note on
Contingency concept.
___________________
PE
100
101
Notes
___________________
___________________
___________________
___________________
___________________
PE
___________________
)U
Construction problems
Schedule slippages
Miscellaneous unforeseen
Estimating inaccuracies
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Prepare
a
contingency
worksheet of your project in
line___________________
with Table 8.1.
___________________
___________________
___________________
PE
102
(c
)U
Typical
Accuracy
Range
+or -
Accuracy
Range Selected
for Specific
Project
25 to 50
30
15 to 25
20
10 to15
13
5 to 10
0 to 5
Financial completion
___________________
Normal
Contingency, $
% Normal
Contingency
% at stage 5
% at stage 4
% at stage 3
% at stage 2
% at stage 1
% at stage 0
% of Total Cost
(c
Forecast Value, $
Description
___________________
___________________
Account No.
___________________
___________________
)U
___________________
PE
Project Definition
Notes
Activity
___________________
Establish
overall average
contingency for your project
by ___________________
using the contingency
sheet prepared earlier.
___________________
___________________
103
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Columns 1 & 2 on the left hand side of the form contain a list of
the equipment and bulk materials by code of accounts. The form
may be subdivided under material, subcontracts and labour in a
similar manner to the way in which the unit estimate is built up.
Notes
PE
104
105
2.
Notes
Activity
___________________
Using
average and maximum
contingency for each account,
___________________
establish
potential areas of
high sensitivity and impact of
any ___________________
specific cost changes for
your project.
___________________
PE
___________________
___________________
)U
Equipment Failures
Subcontractors Poor Performance
Supplier's Claims
Damages and Losses
Schedule Completion Formalities
Operating Performance Penalties
Item of Risk
Probability of
Risk Occurrence
(c
Maximum Extra
Cost due to Risk
Net Risk to
Project
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
___________________
PE
106
___________________
___________________
___________________
1.
2.
(c
)U
Summary
Keywords
107
Notes
___________________
___________________
___________________
___________________
1.
2.
3.
4.
What are the factors that govern choice between average and
maximum risk contingency to be applied to a particular project
at a particular location?
Books
)U
Further Readings
(c
___________________
PE
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
___________________
___________________
Web Readings
108
http://www.dummies.com/how-to/content/how-to-estimate-projectcosts.html
http://www.brookings.edu/about/projects/archive/nucweapons/man
hattan
___________________
http://www.villanovau.com/project-cost-management-strategies/
___________________
http://docs.oracle.com/cd/A60725_05/html/comnls/us/cst/trnspr01.ht
m
___________________
___________________
(c
)U
___________________
PE
___________________
http://www.pmh1project.com/info-centre/faq/Pages/Project-CostTiming.aspx
Unit 9
109
Sensitivity Analysis
Notes
Activity
___________________
Prepare
an assignment on
application
of
Sensitivity
___________________
Analysis
in your project.
___________________
Objectives
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
\
___________________
Judgment Factor
___________________
Introduction
)U
(c
Having carried out the contingency and risk analysis, the last step
is to do a sensitivity analysis. The term may be interpreted in
many ways. But in general, the requirement is to determine cost
areas which could change significantly and which, in turn, would
have the greatest impact on the overall project cost which will be
more sensitive to changes in some accounts than others. For
example, if one account represents 1% of the total cost, then a
100% overrun in this account will only affect the total by a
maximum of 1%. On the other hand, if another account represents
20% of the total cost, then a 10% overrun on this account could
affect the total cost by 2%. Thus the total cost has greater
sensitivity to this account than the first.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
110
111
Notes
___________________
Judgment Factor
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
)U
___________________
(c
2.
___________________
Notes
Activity
___________________
Prepare
a report on settings
and constraints of your
___________________
project.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
PE
112
(c
)U
2.
)U
1.
Summary
(c
113
Notes
___________________
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Keywords
PE
___________________
114
the
statistical
2.
3.
4.
(c
)U
1.
Further Readings
Books
Web Readings
Notes
___________________
___________________
___________________
___________________
___________________
PE
115
http://www.euroi.ktu.lt/lt/images/stories/Paskaitos/ch11.pdf
___________________
http://www.wageningenur.nl/en/show/validation-of-complexadaptive-systems-1.htm
___________________
http://www.biztek.edu.pk/downloads/JICT%204.1/4%20Project%20
Management.pdf
___________________
(c
)U
http://archive.nbuv.gov.ua/portal/Soc_Gum/Evd/2011_4/32.pdf
___________________
___________________
116
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 10
117
Case Study
___________________
___________________
___________________
Objectives
___________________
___________________
)U
(c
___________________
PE
After analyzing this case, the student will have an appreciation of the
concept of topics studied in this Block.
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
118
___________________
Question:
___________________
Analyse the case and write down the case facts of your study.
(c
)U
Source: http://www.scribd.com/doc/6929735/Project-Management0406
119
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
BLOCK-III
120
Notes
UNIT
11: INITIATING A PROJECT
___________________
z
Introduction
___________________
z
Manpower Build-up
___________________
z
Project Initiation Steps
___________________
Project Managers and Project Team
Responsibilities
___________________
Issue of Network, Work to List and Work Order
Form
___________________
___________________
Introduction
A Sample Project
Major Elements
Introduction
Time Estimation
PERT Model
CPM Model
(c
)U
PE
___________________
UNIT 12: PROJECT EXECUTION
___________________
z
Introduction
___________________
z
Meaning of Project Execution
Detailed Contents
Unit 11
121
Initiating a Project
___________________
Objectives
Manpower Build-up
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
\
Notes
Activity
___________________
Make
a list of the major
initiation steps for your
___________________
project.
___________________
___________________
___________________
Introduction
Manpower Build-up
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Prepare
a
preliminary
construction plan for your
___________________
project.
PE
122
___________________
___________________
(c
)U
___________________
2.
2.
3.
4.
5.
6.
7.
8.
9.
)U
(c
Notes
___________________
___________________
___________________
___________________
___________________
PE
123
the rules and the course may yet have to be defined. The initiation
of a project puts great pressure on him to get the project moving.
Box 11.1 lists the steps in the initiation of a project. The list is not
comprehensive but shows the more important activities of a project
manager.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
To ensure continuity and a smooth job start, the E&C will want to
involve the nominated PM and the key members of the proposed
project team in the proposal activities and pre-award contract
discussions.
(c
)U
___________________
Notes
PE
124
Engineering
Procurement
Construction
125
___________________
___________________
controls,
reports,
___________________
PE
___________________
Scheduling activities
construction;
)U
in
___________________
___________________
(c
Notes
engineering,
procurement
and
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
126
(c
)U
)U
Electrical systems
Climatic conditions
(c
127
Notes
___________________
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
PE
___________________
128
___________________
(c
)U
The above will take two to five months for completion depending
upon the size and complexity of the project. Normally, preliminary
process flow diagrams are produced as a first step and reviewed
with the client. Following on from this, critical process system
equipment specifications and data sheets are issued for early
procurement.
Contract data
Scope of work
Client's responsibilities
Approvals
Engineering
Procurement
129
Construction
Notes
Accounting
___________________
___________________
Project procedures;
Organization charts;
)U
(c
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
engineering phase, at which time bulk materials are taken off and
priced. The defined estimates provide the firm with a basis for cost
control for the on going project execution.
Notes
PE
130
___________________
___________________
___________________
___________________
PE
)U
During the project initiation stage, the first task of the project
procurement manager is to prepare the procurement plan
amplifying the procurement aspects of the project plan. The
procurement plan establishes the procurement philosophy for the
project. It identifies the critical items of equipment and materials,
lists those items which will be provided "sole source", that is from a
specified supplier; notes material which are "free issue," provided
by subcontractors or from other sources; establish quality and cost
philosophies; the number of competitive bids required; whether or
not the policy is to purchase locally, nationally or worldwide. The
procurement plan is reviewed by the PM and may be subject to
approval by the client before issue. Following on from the
procurement plan, detailed procurement procedures are drawn up
which specify the purchasing forms to be used, the approval levels,
the routing and distribution of purchase documents and any
special referencing and numbering codes to be used.
Along with the above, an approved bidders list is prepared
reflecting the policies established in the procurement plan. The
approved bidders list is set up by using project procedures for each
category of equipment, material and service. All bidders on the
approved list will be suppliers who have performed satisfactorily in
the past and have proved themselves by their quality and
reliability. The project procurement manager also participates in
(c
Notes
___________________
131
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Labour relations;
(c
)U
___________________
Notes
PE
132
2.
Summary
)U
This unit lists out and details the important actions to be taken by
PM at the time of initiation of a project. The most important steps
to be taken are aimed at: Establishing communication channels
and procedures with the client, making estimates of manpower
deployment for achieving project completion within agreed
schedule, Draw up project master schedule and identify critical
path activities and Preparation and review of engineering,
procurement and construction schedules.
Keywords
(c
133
Notes
___________________
___________________
___________________
___________________
___________________
PE
At this stage, the project has been initiated. If the PM has directed
his efforts to ensure that the basic project initiation steps have
been properly completed, he will no longer be the leader of an
unfamiliar team in a race against time on an unknown course with
undefined rules. He will now have an organized integrated team,
all working to a common plan. The overall success of the project
can depend, to a great extent, upon how thoroughly the project
initiation steps have been carried out.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
134
___________________
2.
3.
4.
5.
(c
)U
___________________
Further Readings
Books
135
Notes
___________________
___________________
___________________
Web Readings
___________________
___________________
PE
http://www.method123.com/project-initiation-phase.php
http://www.chandleraz.gov/Content/PM000PMMethodologyGDE.pdf
http://www.lincoln.ne.gov/city/pworks/engine/dconst/gpp/pdf/prjing
pp.pdf
http://www.kumlanderlab.com/idu3390/idu3390_konsp_4_2011_eng.
pdf
http://www.processimpact.com/handbooks/pi_intro_and_chapter_1.
pdf
(c
)U
http://projectmanagementblog.com/five-steps-initiating-project
___________________
___________________
___________________
___________________
___________________
136
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 12
137
Project Execution
___________________
___________________
___________________
Objectives
)U
In this unit, you will study about the project execution and control
phase of a project life cycle. Project execution (or implementation)
is the phase in which the plan designed in the prior phases are put
into action. The purpose of project execution is to deliver the
project expected results (deliverable and other direct outputs).
Typically, this is the longest phase of the project management
lifecycle, where most resources are applied. During the project
execution, the execution team utilizes all the schedules, procedures
and templates that were prepared and anticipated during prior
phases. The completion of start-up activities ensures that all
elements are in place and project is ready to take-off. Project
execution converts the plan into tangible asset, fulfilling a set of
objectives. However, in real life, this transition from plan to
tangible asset is not smooth.
In the standard division of project management discipline this
phase is called "Project Execution and Control"; the term "control"
is included here because execution is not a blind implementation of
what was written in advance but a watchful process where doing
things goes along with understanding what is being done, and redo it or do it differently when the action does not fully responds to
what was meant for. This "control" is an integral part of project
management and is a necessary task of the project manager.
(c
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Introduction
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Make
an assignment on the
qualities of team members
___________________
quality
of executing the
project.
___________________
At the time a project moves into the Execution Phase, the project
team and the necessary resources to carry out the project should be
in place and ready to perform project activities. The project plan
should have been completed and base lined by this time as well.
The project team and specifically the Project Managers focus now
shifts from planning the project efforts to participating in,
observing, and analyzing the work being done. Once all essentials
are in place, the project manager plans to commence the project.
He organizes a meeting, called 'kick-off meeting or event' of all
concerned to mainly announce the start of the project. He takes the
opportunity to present the main features of the project, project
objectives, organization, etc. Purpose of the meeting is to ensure
that:
Team members understand the features of the project
(c
)U
1.
PE
138
2.
3.
4.
2.
Notes
Activity
As ___________________
a Project Manager, what
are your duties towards
___________________
carrying
out and executing the
project of your organisation.
___________________
___________________
___________________
PE
1.
139
___________________
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Performance Monitoring
Notes
Activity
___________________
Prepare
Work Order Form of
your company.
___________________
PE
140
True or False:
(c
)U
1.
2.
2.
ID
Activity
Description
Duration
Resource
1.
ABC
US-4
S-2
___________________
___________________
___________________
15-03-08
17-3-08
___________________
)U
(c
___________________
___________________
Activity Description:
Progress on
Date (Days
Work or %)
___________________
___________________
___________________
Scheduled
Completion
___________________
Scheduled
Staff
Notes
PE
4.
141
3.
Anticipated
Completion
Date
Sign
of I/C
Besides giving complete account of resource allocation on day-today basis, progress made, and holds, if any need to be stated. Work
order form acts as a history sheet. It can help in managing future
network.
142
Notes
___________________
___________________
1.
2.
___________________
___________________
___________________
___________________
___________________
___________________
Summary
(c
)U
___________________
PE
___________________
Keywords
Notes
___________________
___________________
___________________
___________________
___________________
PE
143
___________________
___________________
2.
___________________
3.
___________________
4.
5.
6.
)U
1.
Further Readings
Books
(c
___________________
Notes
___________________
___________________
___________________
___________________
Web Readings
144
http://oa.mo.gov/itsd/cio/projectmgmt/V4_1/MOBPM_Chapter05_V
4_1.pdf
http://www.cioarchives.ca.gov/ITpolicy/pdf/PM5.1_Project_Executio
n_Introduction.pdf
___________________
http://www.its.ny.gov/pmmp/guidebook2/ExecutionAndControl.pdf
___________________
___________________
http://www.oceanleadership.org/wp-content/uploads/2009/04/100100000_PEP_OOI_ver_3-06_Pub.pdf
___________________
http://pmstats.dis.arkansas.gov/Meth/07-Execution%20Phase.pdf
(c
)U
___________________
PE
___________________
http://www3.imperial.ac.uk/estatesprojects/projectprocedures/proce
sses/pm/1.40/1.40.03
Unit 13
145
Objectives
A Sample Project
Major Elements
Procurement
Construction
Engineering
Introduction
)U
A Sample Project
Direct field labour hours (at 20% at $15 per hour) 1,300,000
hours
(c
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Notes
Activity
___________________
Considering
your project as
the sample project, detail out
the ___________________
items given in table 13.1
as per your project.
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Make
a list of major elements
of your project.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Schedule constraints
___________________
(c
)U
PE
___________________
146
2.
Major Elements
Notes
Activity
___________________
Prepare
a
procurement
schedule for your project.
___________________
___________________
___________________
___________________
PE
147
___________________
___________________
___________________
___________________
___________________
2.
)U
1.
Procurement
(c
Procurement Cycle
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
ACTIVITIES
REF NOTE
Durations are working days
() are cumulative working
days
(c
DURATIONS
Complex
Standard
Bulk
Equipment Equipment Material
Item
Item
Item
A
B
C
0
(0)
0
(0)
0
(0)
8
(8)
5
(5)
5
(5)
)U
___________________
PE
148
7
(15)
5
(10)
3
(8)
Receive Quotations
30
(45)
20
(30)
15
(23)
20
(65)
15
(45)
7
(30)
10
(75)
10
(55)
5
(35)
5
(80)
5
(60)
5
(40)
16
12
20
(100)
15
(75)
00
(50)
20
15
(90)
10
(60)
149
Notes
Activity
___________________
Prepare
a
construction
schedule for your project.
___________________
___________________
___________________
Equipment/Material List
PE
___________________
)U
2.
Construction
(c
Sequences
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Man-hours
(c
)U
___________________
Notes
PE
150
For the project under consideration, the plot area is 400x400 feet,
which equals to 160,000 square feet. The economic peak manpower
therefore is 160,000/200 = 800 men.
2.
)U
1.
Engineering
Engineering has been last until left because it is the most difficult
to schedule. For many reasons, the sequence of engineering
activities may not follow typical logic. It comes down to priorities,
preferences and discipline. However, some sequence is applicable
as process engineering precedes detailed engineering, some
engineering is dependent upon the receipt of vendor drawings, etc.
If minimum schedule is the priority, many engineering shortcuts
can be taken based on conservative, empirical assumptions.
Equipment and material can be "sole sourced" to save time.
The result may be a less than optimum design, with some added
costs. If design optimization and/or minimum cost is the priority,
then basic engineering may go through many recycles with
consequent effect on the schedule and man-hours.
(c
151
Notes
Activity
___________________
Prepare
an
engineering
schedule for your project.
___________________
___________________
___________________
___________________
PE
Orderliness
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
(c
)U
___________________
PE
152
Spread Charts
2.
Notes
Activity
___________________
Write
a short note on total
project.
___________________
___________________
___________________
___________________
PE
1.
153
___________________
)U
Engineering (to the 90% point) normally should not exceed 65% of
the total project duration.
Master Schedule
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Comparative Analysis
Make Adjustments
(c
)U
___________________
Notes
PE
154
Realistic Milestones
A master project schedule developed by this "top-down" method
provides realistic milestones. These can subsequently be used for
155
Notes
___________________
___________________
2.
___________________
___________________
___________________
PE
1.
___________________
___________________
Summary
)U
Keywords
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
156
1.
2.
3.
4.
What is critical path for a project and how does the activities
on critical path influence the project?
5.
(c
)U
___________________
6.
Further Readings
Books
157
Notes
___________________
Web Readings
http://www.mindtools.com/pages/article/newPPM_71.htm
___________________
___________________
___________________
PE
http://www.dummies.com/how-to/content/how-to-develop-yourprojects-schedule.html
___________________
http://www.cioarchives.ca.gov/ITpolicy/pdf/PM3.4_Planning_Projec
t_Schedule.pdf
___________________
___________________
http://www.ces.sdsu.edu/Pages/Engine.aspx?id=56
___________________
http://polaris.umuc.edu/mts/TMAN/Learn_Objects/mod3/html/page
1.html
___________________
(c
)U
http://blogs.pmi.org/blog/voices_on_project_management/2013/04/es
sentials-of-successful-proje.html
___________________
158
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 14
159
Time Estimation
PERT Model
CPM Model
___________________
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Development of Project Network
___________________
___________________
Objectives
Notes
___________________
___________________
___________________
___________________
___________________
Introduction
)U
(c
There are two basic network techniques: PERT and CPM. PERT,
an acronym for Program Evaluation Review Technique was
originally developed to facilitate the planning and scheduling of
the Polaris Fleet Ballistic Missile Project of the US Government.
Designed to handle risk and uncertainty, PERT is eminently
suitable for research and development programmes, aerospace
projects, and other projects involving new technology. In such
projects, the time required for completing various jobs or activities
can be highly variable. Hence, the orientation of PERT is
'probabilistic'.
CPM, an acronym for Critical Path Method, is akin to PERT. It
was developed independently in 1956-57 by the DuPont Company
in the US to solve scheduling problems in industrial settings. CPM
is primarily concerned with the trade-off between cost and time. It
has been applied mostly to projects that employ a fairly stable
technology and are relatively risk free. Hence, its orientation is
'deterministic'.
Notes
Activity
___________________
Identify
network technique for
your project management.
___________________
___________________
160
___________________
___________________
___________________
___________________
___________________
___________________
PE
___________________
Send Invitation
Receive Guests
(c
)U
Prepare Dinner
Take Dinner
4
The forward method begins with the initial event, marking the
beginning of the project, and proceeds forward till the end event is
reached. The backward method begins with the end event and
works backwards till the beginning event is reached.
)U
(c
1.
Notes
___________________
___________________
___________________
___________________
___________________
PE
161
___________________
___________________
___________________
___________________
___________________
___________________
3.
Not more than one activity can have the same preceding and
succeeding events. This means that each activity is
represented by a uniquely numbered arrow and a situation
like the one shown in Figure 14.3 is not permissible.
___________________
___________________
___________________
2.
Notes
___________________
___________________
___________________
___________________
___________________
___________________
PE
162
(c
)U
163
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
Illustration
)U
D = Install wiring
E = Install plumbing
F = Plaster walls
G = Install siding
(c
G should precede I
___________________
___________________
___________________
Notes
Activity
___________________
Write
a short note on time
estimation.
___________________
Erect Frame
2
164
Install Mill
___________________
Lay
Foundation
___________________
Erect Frame
2
___________________
___________________
___________________
Lay Foundation
___________________
Install plumbing
In Pla
sta
ste
rw
ll
alls
sid
in
g
F
Install Siding
Install Wiring
Erect frame
___________________
Install plumbing
E
Plaster Walls
PE
___________________
Install
Wiring
Finish the
Exterior
(c
)U
2.
Time Estimation
Once the logic and detail of the network have been established,
time estimates must be assigned to each activity. Generally, three
time values are obtained for each activity:
z
165
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
)U
2.
3.
4.
(c
1.
5.
166
___________________
___________________
True or False:
___________________
1.
2.
PE
Notes
Activity
___________________
What
is critical path for a
project and how do the
___________________
activities
on critical path
influence the project?
___________________
___________________
___________________
Once the network diagram with single time estimates has been
developed, the following computational procedure may be
employed for determining the critical path/s, event slacks, and
activity floats.
___________________
___________________
(c
)U
An event occurs when all activities leading to the event have been
completed. In the network diagram shown in Figure 14.8, for
example, event 4 occurs when activities (2-4) and (3-4) are
completed. Obviously activity (2-4) cannot begin unless event 2
occurs, which in turn requires the completion of activity (1-2).
Likewise, activity (3-4) cannot begin unless event 3 occurs which in
turn requires the completion of activity (1-3). Thus, we find that
event 4 occurs when activities (1-2), (2-4), (1-3), and (3-4) are
completed. In other words, event 4 occurs when paths (1-2-4) and
(1-3-4) are completed.
The EOT, the earliest occurrence time, of an event refers to the
time when the event can be completed at the earliest. Looking at
event 4, we find that since the paths leading to it, viz. (1-2-4) and
(1-3-4) take 15 weeks and 20 weeks, respectively, the EOT of event
4 is 20 weeks. In general terms, the EOT of an event is the
duration of the longest path (from the beginning event whose EOT
is set at 0) leading to that event. The EOTs of various events in our
illustrative project are shown in Figure 14.8. It may be noted that
in Figure 14.8 and subsequent figures an event is represented by a
circle. The upper half of the circle denotes the event number, the
left quarter in the lower half denotes the EOT, and the right
quarter in the lower half denotes the latest occurrence time, a term
described later.
167
___________________
15
13
Notes
13
___________________
28
12
___________________
___________________
PE
___________________
___________________
12
20
___________________
___________________
)U
The EOT of the end event obviously represents the minimum time
required for completing the project. To obtain the EOT of various
events we start from the beginning event and move forward
towards the end event. This computational procedure is referred to
as the forward pass. In this computation, we assume that each
activity starts immediately on the occurrence of the event
preceding it. Hence, the starting and finishing time for various
activities obtained from this computation are the Earliest Starting
Time (EST) and the Earliest Finishing Time (EFT).
(c
___________________
___________________
Notes
backward. The LOT for various events is shown (in the right
quarter of the lower half of event nodes) in Figure 14.9.
168
___________________
___________________
13
13
___________________
15
___________________
___________________
___________________
___________________
___________________
___________________
PE
___________________
28
12
18
26
(c
)U
The slack for an event is the difference between its LOT and EOT.
The slacks for various events of our illustrative project are shown
in Table 14.1.
Table 14.1: Event Slack
Event
LOT
EOT
(In weeks)
Slack
= LOT
= EOT
28
28
26
20
18
12
13
13
169
Notes
Activity
___________________
Describe
the term PERT.
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
13 13
13
15
28 28
)U
0 0
12
12 18
20 26
2.
(c
1.
PERT Model
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Measures of Variability
PE
170
(c
)U
tp
to
O = (tp-to)/6
Variance = O2
(1-2)
21
5.00
(2.5)
24
10
2.33
5.43
For real life projects which have a large number of activities on the
critical path, we can reasonably assume that the critical path
duration is approximately normally distributed, with mean and
standard deviation obtained by the method described above.
Range
Mean One standard deviation
Mean Two standard deviations
X-30
X+30
X-20
X-0
___________________
___________________
___________________
___________________
___________________
0.954
___________________
0.998
X+1
X+20
(c
___________________
0.682
___________________
___________________
___________________
Probability
)U
Notes
PE
171
Notes
___________________
___________________
___________________
3.0
___________________
___________________
___________________
___________________
___________________
2.6
2.4
(c
0.001
0.003
0.005
0.008
2.2
0.014
2.0
0.023
1.8
0.036
1.6
0.055
1.4
0.081
1.2
0.115
1.0
0.159
0.8
0.212
0.6
0.274
0.4
0.345
0.2
0.421
0.0
0.500
0.2
0.579
0.4
0.655
0.6
0.726
0.8
0.788
1.0
0.841
1.2
0.885
1.4
0.919
1.6
0.945
1.8
0.964
2.0
0.977
2.2
0.986
2.4
0.992
2.6
0.995
2.8
0.997
3.0
0.999
)U
___________________
2.8
Cumulative Probability
PE
___________________
172
The above procedure may be illustrated for our project which has
T = 28 and SD = 3.07. The probability of completing this project by
certain specified dates is shown in Table 14.3.
Specified
Probability of Completion by D
20
20 28
= 2.6
3.07
0.005
25
25 28
= 1.0
3.07
0.159
30 28
= 0.6
3.07
0.726
30
173
Notes
Activity
___________________
Explain
the
networking
techniques CPM.
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
CPM Model
)U
Assumptions
(c
___________________
___________________
___________________
3.
___________________
___________________
___________________
2.
Notes
___________________
___________________
___________________
___________________
Direct cost of
Activity
___________________
___________________
PE
174
Duration
Crash Time
Normal Time
Activity
(c
Indirect cost of
project
)U
4.
Procedure Duration
Procedure
Given the above assumptions, CPM analysis seeks to examine the
consequences of crashing on total cost (direct cost plus indirect
cost). Since the behaviour of indirect project cost is well defined,
the bulk of CPM analysis is concerned with the relationship
Time in Weeks
Crash
8
5
9
7
5
3
6
10
9
4
3
6
5
1
21/2
2
7
5
Normal
Crash
3,000
4,000
4,000
2,000
8,000
10,000
4,000
6,000
4,200
6,000
8,000
5,500
3,200
12,000
11,200
6,800
8,700
9,000
45,200
70,400
Cost to Expedite
per Weeks
)U
Normal
Cost
450
2,000
500
600
1,000
2,400
700
900
1,200
(c
10
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Example:
1-2
1-3
2-4
3-5
2-5
4-6
5-6
6-7
5-7
Notes
PE
Step 3: Construct the new critical path after crashing as per step
2. Determine project duration and cost.
175
between total direct cost and project duration. The procedure used
in this respect is generally as follows:
5
7
___________________
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
8
___________________
___________________
___________________
___________________
PE
176
6
10
(c
)U
6
10
177
Notes
___________________
___________________
___________________
10
___________________
PE
___________________
___________________
___________________
___________________
___________________
)U
6
7
___________________
(c
178
___________________
___________________
___________________
___________________
Notes
PE
___________________
___________________
___________________
___________________
Looking at the new critical path (1-2-4-6-7) we find that the only
non crashed activity is (4-6). Crashing this gives us the project
network shown in Figure 14.20. As per this Figure 14.20, the
critical path again is (1-2-4-6-7) with a duration of 191/2 weeks and
the total direct cost is ` 57,600.
6
)U
(c
___________________
___________________
6
7
9
5
Since all the activities on the critical path (1-2-4-6-7) are crashed,
there is no possibility of further time reduction. Hence, let us now
look at the time-cost relationship. This is shown in Figure 14.20.
From Table 14.5, we find that the total cost is minimised for the
project schedule represented by the activities crashed are (1-2),
(2-4), (3-5), (5-6), (6-7). The information provided in Table 14.5 is
useful for decision-making.
Project
Duration
in Weeks
Total
Direct
Cost
Total
Indirect
Cost
Total
Cost
Notes
Figure
No.
179
___________________
___________________
None
30
45,200
60,000
105,200
14.15
(2-4)
29
46,700
58,000
104,700
14.16
27
14.17
24
14.18
21
14.19
20
14.20
191/2
___________________
___________________
___________________
PE
14.14
49,500
54,000
103,500
52,500
48,000
100,500
55,500
42,000
97,200
___________________
56,400
40,000
96,400
57,600
39,000
96,600
)U
Check Your Progress
(c
2.
___________________
___________________
1.
___________________
Summary
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
180
(c
)U
Keywords
used
in
network
2.
3.
4.
5.
___________________
___________________
PE
)U
Web Readings
(c
___________________
___________________
1.
Books
Notes
___________________
Further Readings
181
http://www.mindtools.com/critpath.html
http://en.wikipedia.org/wiki/Program_Evaluation_and_Review_Tec
hnique
http://home.snc.edu/eliotelfner/333/stones/page3.html
http://krypton.mnsu.edu/~tony/courses/609/PERT/tech.html
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
http://filebox.vt.edu/users/sfury/3434/technique.html
182
http://smallbusiness.chron.com/cpm-pert-weaknesses-strengths1082.html
https://www.cs.tcd.ie/~yoonj/Teaching/ST4004/CPM_Reading3.pdf
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 15
183
Case Study
Notes
___________________
___________________
___________________
Objectives
___________________
___________________
PE
After analyzing this case, the student will have an appreciation of the
concept of topics studied in this Block.
)U
(c
On July 14, 2010, the first flight touched down at Indias newly
built Terminal 3 (T3) of Delhi airport, the swankiest and largest
in the country, opening a new chapter in the history of the airport
and the Indian Aviation Industry. It was around 4:40 pm (IST)
when the first commercial flight, the Air India flight from John F
Kennedy International Airport, New York, touched down on the
runway to be greeted by water cannon salutes from both sides.
The 220 passengers and 18 crew members of AI-102 flight were
warmly welcomed by the airport senior officers and staff and
treated as special guests. They posed for media cameras and
Contd...
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Not too long ago, Delhi airport had been known for its poor
management and poor passenger services. Underinvestment in
airport infrastructure since independence was a major cause for
concern. Lack of funds and the expertise to develop and maintain
the growing airport infrastructure needs of the country forced the
government to invite private players to participate in
infrastructure development under Public Private Partnership
(PPP). It was in January 2006, that a consortium led by the GMR
Group won the bid to develop the airport. Very soon, the PPP
initiative yielded results, with two terminals being renovated and
one new runway and terminal 1D being opened up for commercial
operation. However, revolutionary change, as the experts called it,
came about when the T3 was inaugurated on July 3, 2010. At the
inauguration of T3, Manmohan Singh (Singh), Prime Minister of
India, said, "The Delhi airport has improved its rank sharply in
terms of Air Service Quality (ASQ) performance, from 101 in 2007
to 21 in 2010. After the opening of this new terminal we are
hopeful that the airport will shortly rank within the first 10
airports of the world."
PE
184
(c
)U
Source: http://www.icmrindia.org
185
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
BLOCK-IV
186
Notes
UNIT
16: PROJECT CONTROL
___________________
z
Introduction
___________________
z
Definition and Importance of Project Controls
___________________
z
Controlling the Projects
z
___________________
Project Control Cycle
z
z
z
___________________
Construction Curves Construction Progress
Control
Introduction
The Estimate
Introduction
Project Dynamics
Rework Cycle
Ripple Effects
(c
Introduction
___________________
"S" Curve
___________________
"S" Curve Applications
___________________
Master Project Schedule
)U
PE
___________________
UNIT 17: CHECKING PROJECT PROGRESS WITH
BELL
AND S CURVES
___________________
Detailed Contents
Unit 16
187
Objectives
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Project Control
Notes
Activity
___________________
Explain
Project
controls
monitor and adjust the cost,
___________________
schedule
and scope of a
project to ensure that it is
___________________
completed
within budget, on
time and as planned.
___________________
___________________
___________________
Introduction
)U
(c
Fayol noted that "to control means seeing that everything occurs in
conformity with established rule and expressed command." Control
is a fact-finding and remedial action process to facilitate meeting
the project purposes. Its primary purpose is not to determine what
has happened (although this is important information), but rather
to predict what may happen in the future if present conditions
continue and if there are no changes in the management of the
project. This enables the project manager to manage the project in
compliance with the plan. The basis of effective project monitoring,
evaluation, and control is an explicit statement of the project
objectives, goals, and strategies which provide performance
standards against which project progress can be evaluated.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
___________________
___________________
___________________
PE
188
Scope management;
Project deliverables:
Progress measurement/reporting;
(c
)U
Estimating;
Cost management;
Cost control;
Cost forecasting
Trend Analysis;
Notes
___________________
___________________
___________________
___________________
___________________
PE
189
)U
(c
1.
2.
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Make
a presentation on
application of control of major
___________________
constraints
Time, Cost &
Qualities in any organisation
___________________
of your
choice.
190
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
191
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
)U
___________________
(c
1.
___________________
___________________
___________________
2.
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
192
3.
4.
5.
___________________
(c
)U
Variance Analysis
Performance Analysis
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Overhead budgets
___________________
)U
BCWP - ACWP
Schedule Variance
BCWP - BCWS
BCWP/ACWP
BCWP/BCWS
(ACWP + ACC)/(BCTW)
(c
Notes
PE
193
___________________
___________________
___________________
___________________
3.
___________________
___________________
___________________
___________________
___________________
4.
2.
Notes
PE
194
___________________
___________________
(c
)U
5.
2.
195
Notes
Activity
___________________
Write
a short note on key
steps
to
effective
time
___________________
management.
___________________
___________________
___________________
PE
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
196
Schedule Adjustments
Resource Evaluation
Time/Cost Trade-off
True or False:
1.
2.
ACWP
represents
actual
cost
incurred
for
accomplishing the work performed during a particular
time period.
Summary
197
)U
Keywords
(c
Notes
___________________
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
198
___________________
___________________
1.
2.
3.
4.
5.
6.
___________________
___________________
___________________
___________________
___________________
PE
___________________
(c
)U
Further Readings
Books
Web Readings
199
Notes
www.projectsmart.co.uk
___________________
www.projectmanagement.com
___________________
www.pmearth.com
http://www.brighthubpm.com/risk-management/69114-the-needfor-project-control-why-bother/
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
200
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 17
201
After completion of this unit, the students will be aware of the following
topics:
\
"S" Curve
Introduction
)U
"S" Curve
(c
Objectives
___________________
PE
Notes
Activity
___________________
Make
a spreadsheet for the
engineering planned progress
and___________________
man-hour expenditure
(discipline wise) on the basis
___________________
of the
engineering schedule.
Draw corresponding S and
___________________
Bell
curves.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
and its slope shows the rate of progress or loading at each point of
time. In reality, it is rarely feasible to apply full loading instantly
and to maintain a constant load throughout the time span.
Usually, there must be an initial lead-in period for initial
mobilization before peak effort can be applied and a tail-off period
towards the end. Curve B in Figure 17.1 shows a typical,
symmetrical "S" curve which has an equal build up and tail-off. "S"
curves are not usually symmetrical. They may be front end loaded
or back end loaded as illustrated in curves C and D in Figure 17.1.
An actual "S" curve might follow any shape within the grid but will
probably fall between the extremes of the two curves shown. The
closer the "S" curve is to the 45 degree straight line, the greater is
the degree of resource levelling that has been achieved and greater
the theoretical efficiency.
Notes
PE
202
The Bell curve is derived from the "S" curve and shows the amount
of vertical movement of the "S" curve (the rate of progress or
loading) for a finite time. In the case of the straight line "S" curve,
the slope or loading is constant indicating a constant effort
throughout the total period. Thus, the derived Bell curve is also a
straight line. This shape of the curve is normally the most efficient
203
Notes
Activity
___________________
Prepare
a weighted progress
(planned) S curve for any
one___________________
engineering discipline of
your project.
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
The most common "S" curves used for overall project review are for
engineering, procurement, material delivery and construction.
Notes
PE
204
205
Notes
___________________
___________________
___________________
___________________
___________________
PE
(c
)U
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Unsuitable Curves
Figure 17.3 also includes curve shapes that are unacceptable for
engineering disciplines. Curve A in Figure 17.3 is too steep and too
early. It shows an unrealistic peak of 2.5 times the average with a
long slow tail-off. Curve B shows two steep portions with a central
flat area. The derived Bell curve shows two short term peaks with
low progress achievement over the central portion of the project.
These curve shapes show inefficient manpower loading. If they
were produced, either planned or actual, there is something
seriously wrong with project planning or performance.
(c
)U
___________________
Figure 17.3, curve 1, shows a fast build up, early peak which
applies for process, mechanical and equipment disciplines. Figure
17.3, curve 2, shows a normal build up with a long even peak
which applies for project and support engineering disciplines.
Figure 17.3, curve 3 shows a slow build up and late peak which
applies to the major drafting disciplines.
Notes
PE
206
207
Notes
___________________
Periodic Recording
___________________
___________________
___________________
___________________
)U
PE
(c
Manpower Forecasting
___________________
___________________
___________________
___________________
___________________
___________________
2.
3.
4.
5.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
___________________
(c
)U
___________________
PE
208
2.
)U
(c
209
Notes
Activity
___________________
Draw
up Master project
schedule and S curves for
your___________________
project.
7.
___________________
___________________
___________________
PE
6.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
210
___________________
A Narrow Band
___________________
The shape of the "S" curves, their relationship to each other and
their position with regard to overall project completion fall within
a fairly narrow band for all projects. For example, procurement,
engineering and material delivery all should be complete at the
50%, 70% and 80% points respectively.
___________________
(c
)U
___________________
Notes
___________________
___________________
___________________
___________________
___________________
PE
211
planning. Also the curves help to check the realism of any detailed
plans developed for a specific project.
___________________
___________________
___________________
Unacceptable Curves
2.
The drawing AFC curve is too late. This is running too far
behind the planned progress.
3.
There is too wide a gap between the drawing start and the
drawing AFC curve in the early phases. This means the
drawings are started and left incomplete for too long. This
usually reflects inefficient operation.
4.
5.
(c
)U
1.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
2.
(c
)U
___________________
Notes
Activity
___________________
Draw
construction craft S
and Bell curves for your
___________________
project.
PE
212
Notes
___________________
___________________
___________________
___________________
___________________
PE
213
___________________
___________________
)U
(c
2.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Summary
Notes
PE
214
Keywords
(c
)U
Bell Curve: The Bell curve is derived from the "S" curve and
shows the amount of vertical movement of the "S" curves (the rate
of progress or loading) for a finite time.
Engineering Curves: It contains a tabular spreadsheet
distributing engineering planned progress and man-hour
expenditures by discipline from project start to mechanical
completion.
Individual Discipline Curves: It shows individual discipline
curves plotted over the scheduled completion time for the
discipline.
Isometrics: A system of physical exercises in which muscles are
caused to act against each other or against a fixed object.
Manpower Forecasting: The process of calculating how many
employees will be needed in the future, and how many will actually
be available.
Unacceptable Curves: It shows unacceptable drawing curves
(in heavy dotted line) in relation to the drafting discipline progress
curves.
Unsuitable Curves: It includes curve
unacceptable for engineering disciplines.
shapes
that
are
215
2.
3.
5.
6.
___________________
___________________
___________________
___________________
___________________
___________________
PE
4.
Notes
1.
Books
)U
Further Readings
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
http://www.forecastingnet.com/Alert_0212_34-39.pdf
http://www.seecore.org/d/2007_02t.pdf
http://www.12manage.com/description_s_curve.html
http://www.growthdynamics.com/articles/FROM%20MY%20PERSPECTIVE.htm
(c
)U
___________________
Web Readings
Notes
PE
216
Unit 18
217
___________________
Objectives
The Estimate
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
\
Notes
Activity
For ___________________
your project, calculate
the percentage cost (of the
___________________
total)
for various elements.
___________________
___________________
___________________
___________________
___________________
Introduction
)U
The Estimate
(c
Variations
The last two stages that the final cost of a project is not known
until financial completion, when all commitments and invoices
have been paid. Prior to that there is always the possibility of
variation from an estimate no matter how detailed. Normally,
three levels of estimates are prepared during project execution:
218
Notes
Order of magnitude
Preliminary control
Definitive
___________________
___________________
___________________
___________________
___________________
___________________
___________________
PE
___________________
___________________
Procedures
(c
)U
___________________
Cost in a Project
% of Total
Low
Typical
High
Home office
10
12
Equipment
20
30
40
Commodities
25
31
40
Direct labour
15
20
25
12
Construction
Indirects
Total
100
2.
Notes
Activity
List ___________________
out the methods of
controlling engineering cost.
___________________
___________________
___________________
___________________
PE
1.
219
___________________
Construction plan
)U
Cost Influence
(c
Basic engineering fixes the quality and content of the project which
in turn, fixes the basic cost. Such things are the equipment, the
material and design specifications, philosophies regarding
reliability, spares, safety, environmental protection, automation
and controls, extent of buildings and structures, etc. which are
fixed. After basic engineering has been fixed, the only
opportunities for cost savings are by improved project execution
efficiency and productivity in engineering and construction or by
more competitive equipment and material purchasing. These are
called Economic Value Addition (EVA) methods.
Significant costs are saved only by reducing the scope of the project
by removing equipment items or using less stringent design and
___________________
___________________
___________________
___________________
Notes
Activity
List___________________
the steps you will take to
control the construction cost of
___________________
your
project.
___________________
220
___________________
___________________
1.
___________________
2.
___________________
___________________
___________________
PE
___________________
(c
)U
2.
)U
(c
Notes
Activity
For ___________________
effective cost control,
establish
the
stage
of
___________________
engineering
completion at
which the Bill of Quantities
___________________
(BOQ)
should be available
more or less precisely for the
___________________
following
commodities:
(a) ___________________
Foundation for
steel/rebars
(b) ___________________
Structural steel
PE
221
Document Review
(c) ___________________
Piping and piping
specialties
___________________
(d) Instruments
(e) ___________________
Electrical cables
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
222
___________________
___________________
___________________
___________________
(c
)U
___________________
Since the estimate takeoffs are based upon designs which are
not final, appropriate allowances must be added to the
estimate takeoff to cover final design, construction and
maintenance spares. Allowances must be identified. Unit
prices used in the estimates must also be recorded.
___________________
___________________
___________________
___________________
PE
Notes
___________________
223
Home office overheads for accommodation, facilities and nonchargeable support staff.
___________________
___________________
)U
(c
2.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
List___________________
out the field sub-contracts
required for your project and
give___________________
specific proposals for
cost control of each.
___________________
___________________
PE
224
(c
)U
z
2.
Summary
)U
This unit provides the basic concepts for project cost control at
Engineering, Procurement and Construction stages. Cost control at
engineering stage is carried out by correct estimates of bulk
materials (commodities) and avoiding over design of equipment.
Methods of cost control during construction and cost control of
subcontracts have been emphasized. The role of project changes in
cost over-runs has been described and a control suggested.
What means you would like to adopt for controlling equipment cost
of your project
Keywords
(c
Notes
___________________
___________________
___________________
___________________
___________________
PE
225
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
226
2.
(c
)U
1.
3.
4.
5.
6.
Further Readings
Books
Notes
___________________
___________________
___________________
___________________
___________________
PE
227
___________________
Web Readings
___________________
http://www.tutorialspoint.com/management_concepts/project_cost_
control.htm
http://www.jasonowens.com/wpcontent/uploads/2009/12/ProjectCostControlTools_and_Techniques.
pdf
)U
http://pmbook.ce.cmu.edu/12_Cost_Control,_Monitoring,_and_Acco
unting.html
http://www.pmipr.org/html/Presentaciones/cost_Management.pdf
(c
https://www.e-education.psu.edu/geog584/l6_p6.html
___________________
___________________
___________________
228
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 19
229
Notes
Activity
___________________
Collect
recent updates on
Project Dynamics.
___________________
___________________
___________________
After completion of this unit, the students will be aware of the following
topics:
\
Project Dynamics
Rework Cycle
Ripple Effects
Introduction
)U
(c
___________________
PE
Objectives
Project Dynamics
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
230
___________________
___________________
___________________
(c
)U
Source: https://ceprofs.civil.tamu.edu/dford/dnf%20profesional/ProjectControlModelSDConf2007.pdf
2.
3.
Notes
Activity
___________________
Make
an assignment on
Rework Cycle.
___________________
___________________
___________________
___________________
PE
231
4.
___________________
___________________
1.
___________________
2.
___________________
Rework Cycle
)U
(c
___________________
___________________
RW resource
rate
RW process
rate
Notes
Rework
Backlog
Rework Rate
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
<QA % correct>
QA % correct
Correct
QA Backlog
Error
-- Correct
Fraction
Work
Work
Approve Work Released
Rate
PE
___________________
QA Backlog
-- Incorrect
Work
Discover
Rework Rate
<QA rate>
Incorrect
232
Incorrect.
Initial
Completion
Backlog
Initially Complete
Work Rate
IC process rate
Correct.
QA process
rate
QA rate
QA resource
rate
IC resource rate
Source: https://ceprofs.civil.tamu.edu/dford/dnf%20profesional/ProjectControlModelSDConf2007.pdf
Controlling Feedbacks
(c
)U
Source: https://ceprofs.civil.tamu.edu/dford/dnf%20profesional/ProjectControlModelSDConf2007.pdf
233
Notes
___________________
___________________
___________________
___________________
___________________
PE
(c
)U
___________________
___________________
___________________
___________________
___________________
234
Staff
Notes
Activity
___________________
Prepare
a
presentation
showing the Ripple Effects.
___________________
Resources
Applie d
+
<Rework Rate.>
___________________
Overtime
Add Pe ople
Work M ore
+
<QA Rate.>
___________________
Work
Intensity
+
<Initially Complete
Work Rate.>
Rework Rate
Rework
Backlog
PE
___________________
Work Faster
Correct
Incorrect
___________________
QA
QA Backlog
--- Incorrect Backlog
Correct
Work
Work
Discover
Rework Rate
___________________
Work
Approve Work Released
Rate
Resources
Needed
+
-
<QA rate>
Incorrect.
___________________
Initial
Completion
Backlog
___________________
___________________
Correct.
Time Remaining
QA rate
Initially Complete
Work Rate
Project Backlog
+
Source: https://ceprofs.civil.tamu.edu/dford/dnf%20profesional/ProjectControlModelSDConf2007.pdf
(c
)U
2.
Ripple Effects
235
Notes
___________________
___________________
Staff
___________________
+
+ +
Overtime
+
+
- Productivity
Rework
Backlog
+
Rework Rate
Correct
QA
QA Backlog
--- Incorrect Backlog
Correct
Work
Work
<QA rate>
Incorrect.
Initial
Completion
Backlog
___________________
Initially Complete
Work Rate
___________________
___________________
___________________
___________________
Work Faster
Work
Approve Work Released
Rate
)U
Correct.
Add Pe ople
Work M ore
Work
Intensity
+
+
<Initially. Complete
+
Work Rate>
QA rate
Incorrect
Discover
Rework Rate
PE
Error Fraction
Resources
Needed
+
-
Time Remaining
Project Backlog
+
Source: https://ceprofs.civil.tamu.edu/dford/dnf%20profesional/ProjectControlModelSDConf2007.pdf
(c
___________________
___________________
236
PE
Notes
Activity
___________________
Present
drafts of written
assignments
on
Project
___________________
Dynamics
Feedback Structure
and then revise the drafts
___________________
which
are based on other
student comments. Groups for
this___________________
activity should not be too
large.
___________________
___________________
___________________
___________________
___________________
___________________
Source: https://ceprofs.civil.tamu.edu/dford/dnf%20profesional/ProjectControlModelSDConf2007.pdf
Figure 19.6: Impacts of Overtime (OT), Workforce Size (WF), and Work
Intensity (WI) on Rework due to a Step increase in the Required
Effective Workforce
Knock-on Effects
(c
)U
2.
237
Notes
___________________
___________________
___________________
___________________
___________________
)U
PE
(c
___________________
___________________
___________________
___________________
___________________
Notes
___________________
238
Fraction of Defic it To
Be Filled By
Workw eek
Average
Workweek +
Target Average
Workweek
+
___________________
Productivity
Effort Applie d
+
___________________
Work
Accomplished
___________________
Fraction of Def ic it To
Be Filled By Workf orce
Project
Workforce
Target
Workforce Size
Work Intensity
___________________
Rework
Backlog
___________________
___________________
Target Work
Intensity
Rework Rate
Incorrect.
Initial
Completion
Backlog
Effective WF
Available
Effective WF
Deficit
Fraction of Defic it To
Be Filled By Intensity
QA
QA Backlog
--- Incorrect Backlog
Correct
Work
Work
Discover
Rework Rate
QA Resource
Rate
QA Process
Rate
Correct
Incorrect
___________________
___________________
PE
___________________
Rework
Rework
Process Rate Resource Rate
Work
Approve Work Released
Rate
Effective WF to
Complete on Time
+ -
Correct.
Initially Complete
Work Rate
IC Resource
Rate
Time Available
IC Process Rate
Estimated Work
Remaining
+
Project Scope
(c
)U
Errors from
Overtime
Average
Workweek +
Productivity
Error Fraction
Rework
Backlog
Initial
Completion
Backlog
+
Target
Workforce Size
Work Intensity
Target Work
Intensity
Rework Rate
Correct
QA
QA Backlog
--- Incorrect Backlog
Correct
Work
Work
+
Incorrect.
Project
Workforce
Rework
Resource Rate
+
Incorrect
Discover
Rework Rate
Work
Accomplished
Rework
Process Rate
Effort Applie d
+
+ + +
Target Average
Workweek
+
Errors from
Workforce
Base Project
Error Fraction
QA Process
Rate
QA Resource
Rate
Effective WF
Available
-
Work
Approve Work Released
Rate
Effective WF
Deficit
+
Effective WF to
Complete on Time
+ -
Correct.
Initially Complete
Work Rate
IC Resource
Rate
Time Available
IC Process Rate
Estimated Work
Remaining
+
Project Scope
Notes
___________________
___________________
___________________
___________________
___________________
PE
239
___________________
___________________
2.
)U
Summary
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Keywords
Notes
PE
240
2.
3.
4.
5.
6.
7.
(c
)U
1.
Further Readings
Books
Web Readings
Notes
___________________
___________________
___________________
___________________
___________________
PE
241
___________________
___________________
https://ceprofs.civil.tamu.edu/dford/dnf%20profesional/ProjectContr
olModel-SDConf2007.pdf
___________________
http://www.assakkaf.com/Courses/ENCE%20302/Lectures/Chapter
11.pdf
___________________
http://www.systemdynamics.org/conferences/2011/proceed/papers/P
1293.pdf
)U
http://www.techrepublic.com/blog/10things/10-ways-to-effectivelyestimate-and-control-project-costs/1059
http://www.westney.com/publications/Offshore%20Tech%20Confer
ence/Managing%20the%20Cost%20and%20Schedule%20Risk%20of
%20Offshore%20Development%20Projects.pdf
(c
http://eprints.aston.ac.uk/15566/2/Cost_and_time_control_inhibiting
_factors_and_mitigating_measures.pdf
___________________
242
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 20
243
Case Study
Notes
___________________
___________________
___________________
Objectives
___________________
___________________
PE
After analyzing this case, the student will have an appreciation of the
concept of topics studied in this Block.
___________________
___________________
When Chrysler merged with Fiat on June 10, 2009, there was
cause for hope and optimism. After an endless string of bad news,
perhaps, the auto industry was not dead yet.
On paper it looked like a good deal for everyone. Fiat would
return to the US market and sell its popular 500 (Cinquecentro),
Chrysler would acquire a line of cars that consumers might
actually buy, and tens of thousands of workers would keep their
jobs.
But the real prize might just be Sergio Marchionne, CEO of Fiat
and now CEO of FiatChrysler.
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
DaimlerChrysler
Notes
PE
244
Cerberus
(c
)U
Notes
___________________
___________________
___________________
___________________
___________________
PE
245
Source: http://www.projectsmart.co.uk/project-failures-from-the-top-down-can-marchionnesave-chrysler.html
___________________
___________________
___________________
___________________
(c
)U
___________________
246
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
247
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
BLOCK-V
248
Notes
UNIT
21: PROJECT PROCUREMENT
___________________
MANAGEMENT
___________________
z
Introduction
Detailed Contents
Introduction
___________________
Meaning and Concept of Project Procurement
Creative Endeavour
PE
___________________
UNIT 22: EVALUATING BIDS FOR MAJOR
EQUIPMENT
___________________
Preliminary Evaluation
Technical Evaluation
Commercial Evaluation
Pre-award Meetings
Conditioning of Bids
Vendor Selection
Pre-commitment Meeting
(c
Introduction
Project Engineering
Project Construction
)U
Introduction
___________________
Pre-select Vendors
___________________
Prepare Inquiry
___________________
Receive Bids
Unit 21
249
Objectives
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
Notes
Activity
___________________
Write
a short note on six
processes widely recognised
by ___________________
the project management
industry.
___________________
___________________
___________________
Introduction
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
250
2.
Notes
Activity
Find___________________
out the sources that are
available to provide the
___________________
needed
products or services
for your project.
___________________
___________________
___________________
PE
251
Once the contract is complete, the final step is to close the contract.
The contract is audited to make certain all terms of the contract
were fulfilled. Contract closure involves evaluating the
performance of vendor and documenting any lessons learned in
executing the contract.
___________________
___________________
___________________
___________________
___________________
)U
What to procure
When to procure
(c
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
252
___________________
___________________
___________________
(c
)U
___________________
Oligopoly: There are very few sellers and the actions of one
seller will have a direct effect on the other sellers prices and
the overall market condition.
2.
Notes
Activity
___________________
Assumptions
can also affect
procurement
decisions.
___________________
Elaborate.
___________________
___________________
___________________
PE
1.
253
)U
(c
___________________
___________________
___________________
___________________
___________________
Notes
be
considered
Cost estimates
___________________
Schedule estimates
WBS components
___________________
___________________
___________________
___________________
___________________
effective
___________________
___________________
have
PE
___________________
___________________
to
254
True or False:
1.
2.
(c
)U
Summary
Modern
approaches
to
project
procurement
Keywords
255
___________________
___________________
___________________
___________________
___________________
PE
Notes
___________________
___________________
___________________
2.
3.
4.
5.
)U
1.
Further Readings
Books
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
http://www.euroi.ktu.lt/lt/images/stories/Paskaitos/ch12.pdf
http://www.eastidahopmi.org/5-16-07mtg.pdf
http://www.levlafayette.com/node/330
http://www.anthonyyeong.com/Anthony_PMBOK_Chapter_12.pdf
http://cmtsw.customs.gov.tw/Upload/c_webnews_c_webnews/652/10
10511_2%20%20Project%20Procurement%20Management.pdf
(c
)U
___________________
Web Readings
Notes
PE
256
Unit 22
257
Notes
___________________
___________________
___________________
___________________
After completion of this unit, the students will be aware of the following
topics:
Pre-select Vendors
Prepare Inquiry
Receive Bids
Preliminary Evaluation
Technical Evaluation
Commercial Evaluation
Pre-award Meetings
Conditioning of Bids
Vendor Selection
Pre-commitment Meeting
)U
Introduction
(c
Pre-select vendors
2.
Prepare enquiry
3.
Receive bids
4.
5.
___________________
PE
Objectives
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Make
a list of probable
vendors for the selected major
___________________
equipment
of your project.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
7.
8.
Condition bids
9.
Select vendors
Pre-select Vendors
Before inquiries are issued, potential bidders should be preselected from the ones who have the experience and who have
performed satisfactorily in the recent past. Before sending an
inquiry to a new vendor, pre-qualify him by asking for a
presentation of his qualifications, his prior and similar experience,
and a list of references. Take a feedback from the references,
especially those who have similar equipment installed from the
same vendor. Visit his manufacturing plant, look at his
organization especially with regard to quality assurance aspects,
meet some of the key people and test their calibre. Look at the
equipment and facilities and do a good evaluation of their overall
competence.
(c
)U
___________________
6.
PE
258
Notes
Activity
___________________
Prepare
an enquiry document
for the equipment selected by
you ___________________
for procurement.
___________________
___________________
___________________
PE
Finally, don't send out too many inquiries. Four to five bidders are
enough to get a competitive price. Six is normally the maximum
number of bidders to whom inquiries should be sent so as not to
use up too much of your time and also the time of a large number
of vendors.
259
___________________
___________________
___________________
___________________
2.
)U
1.
Prepare Inquiry
(c
___________________
260
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Notes
A final point: Before the inquiries are issued, check with each
vendor to ensure that he is interested in receiving the inquiry and
will provide you with a bid by the due date. It can be frustrating to
issue inquiries and then receive decline to bid letters just prior to
the due date. This will mean lost time if a second round of
inquiries has to be initiated with new vendors.
2.
)U
1.
Receive Bids
(c
261
Notes
Activity
___________________
Write
a short note on bid
procedure.
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
If the sealed bid procedure is used, any bids received prior to the
bid closing date should be kept in sealed condition only until the
official opening on the bid due date. Vendors should submit their
bids in the envelopes provided and the envelopes should be
properly sealed according to the instructions. Sealed bids should be
opened in the presence of two or more nominated persons who will
witness that at the time of opening, the seals were intact. The
individuals attending the opening of sealed bids shall sign the
envelopes and the cover sheet of each bid to witness the fact that
the bids were sealed until the time noted. Any bids received after
the bid due date should be disqualified and returned to the vendor
unopened.
(c
)U
___________________
Notes
PE
262
True or False:
1.
2.
Preliminary Evaluation
263
PE
Notes
Activity
___________________
1. Prepare
a checklist of
the known components
___________________
required, the drawings,
datasheets
and
the
___________________
documents
of
your
project.
___________________
2. Prepare a technical bid
evaluation sheet for the
___________________
equipment selected for
procurement.
___________________
Once the bids have been received and opened, simply check that
the bids are complete. Have the bidders responded fully? Do you
have all you need to make a proper evaluation?
)U
2.
(c
1.
Technical Evaluation
Once the bids have been initially checked out for completeness
or additional information received for making the bid complete,
perform a complete technical evaluation from the short list of the
most promising bids.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
264
265
Notes
Activity
___________________
Prepare
a commercial bid
evaluation sheet for your
___________________
equipment.
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
)U
___________________
True or False:
2.
(c
1.
Commercial Evaluation
A preliminary commercial evaluation is performed when the bid is
received and opened. The main purpose is to establish a shortlist of
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Check that unit rates or per diem rates have been quoted for
possible additions or extensions of service personnel. If the price is
not fixed, but subject to escalation, check that the escalation
formula clearly defines the material, labour or other components
and the national indices used.
(c
)U
___________________
Notes
PE
266
Once the basic prices have been checked, the next step is to apply
adjustments and corrections. Add allowances for differential
freight costs, import costs, currency exchange, agents or any other
additional services, which may be required.
Take into account the cost of money. The simplest method is to
adjust all costs to a present day value. Allow a discount equal to
the prevailing interest rates for money, which will be paid in
future. This will penalize vendors requiring a high down payment
and large interim progress payments and favour those vendors
who do not require payment until job completion. If you can defer
payment of money, you have the benefit of "float" interest the
money can earn while in your possession. Paradoxically, this
approach may realize a vendor offering a delivery date much
earlier than that is required. Too early a delivery date will cost
money. It may also invalidate warrantees if the equipment is not
put into service for some months after it has been received.
The best plan is to insist upon a delivery date that meets your
erection plan. The conversion of quoted cost to present day values
267
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
268
___________________
___________________
___________________
2.
Once the basic prices have been checked, the next step
is to apply .
Pre-award Meetings
(c
)U
___________________
2. ___________________
Find out intangible and
other factors which might
influence vendor selection
___________________
of your project.
___________________
PE
Notes
Activity
1. ___________________
Review any questions
which have arisen during
___________________
the
technical
and
commercial evaluations of
___________________
your project.
Pre-award
meetings
should
be
held
bidders prior to selection.
2.
with
Conditioning of Bids
After the complete technical and commercial review, the next step
is to "condition" the bids. The conditioning process allows you to
take into account intangible and other factors which might
influence vendor selection. A low bid may not necessarily be the
cheapest bid. One vendor may require more engineering follow-up,
other may require more extensive expediting and inspection.
Consider these points when conditioning bids: additional
engineering review required, late receipt of engineering drawings,
2.
Notes
Activity
___________________
1. Prepare
a
vendor
selection process for your
___________________
project.
2. Find
out the agenda for
___________________
the
pre-commitment
meeting of your project.
___________________
___________________
PE
1.
269
___________________
___________________
___________________
___________________
___________________
Vendor Selection
)U
Having completed all the above steps, the vendor can now be
selected. Normally, this is not done by one person alone. The
technical and commercial evaluation will be signed off by the
technical management, commercial management and possibly the
client. If the case has been prepared properly, support and
approval may be a matter of circulating the forms for signature. In
some cases, it may be necessary to call a meeting and make a walkthrough presentation of the pros and cons of the bidders and justify
the basis for recommendation.
2.
(c
1.
Pre-commitment Meeting
Once agreement and approval have been reached about the vendor,
call the vendor in for a pre-commitment meeting. This meeting is
to let him know that he is close to getting an order. But before you
actually place the order, be sure that all points are fully
understood and confirmed.
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Prepare
a list of documents
to be issued with purchase
___________________
order.
___________________
___________________
PE
270
True or False:
1.
(c
)U
2.
2.
Summary
271
Notes
This unit lists out and explains various steps involved in the
procurement of major equipment. Each stage of procurement
starting from vendor pre-selection to issue of enquiry, bid
evaluation, vendor selection and placement of order has been
described with special emphasis on various important points to be
considered at each stage.
___________________
___________________
___________________
___________________
PE
___________________
Keywords
Bid Price: A bid price is the highest price that a buyer (i.e. bidder)
is willing to pay for a good. It is usually referred to simply as the
"bid."
)U
2.
(c
1.
3.
4.
5.
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
___________________
6.
Further Readings
272
Books
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
(c
)U
Web Readings
http://www.maxwideman.com/papers/procurement/procurement.pdf
http://www.wisegeek.com/what-is-project-procurement.htm#didyou-know
http://www.forthconstruction.co.uk/downloads/achievingexcellence-guide-3.pdf
http://www.infrastructureaustralia.gov.au/publications/files/Procur
ement_Benchmarking_Volume_1_final.pdf
Unit 23
273
Notes
Activity
___________________
Write
short note on Creative
Endeavour of your project.
___________________
___________________
___________________
___________________
PE
Objectives
After completion of this unit, the students will be aware of the following
topics:
___________________
___________________
Creative Endeavour
___________________
___________________
Introduction
)U
Creative Endeavour
(c
___________________
Notes
___________________
___________________
274
Why a Manager?
___________________
___________________
The need for project management arises from the difficulty the
"boss" of the pyramidal organization has in expeditiously handling
the extra problems of the project in addition to his other
responsibilities. What is needed is an extension of this "boss"-the
manager who has the responsibility for the project and the longterm traditional organization. By having a project manager fill this
role, the objectives are:
___________________
Have realistic goals set for the project (for all participating
groups), considering the resources that each can bring to bear.
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
2.
275
)U
True or False:
1.
2.
(c
Notes
Activity
___________________
1. Find
out the difference
between Authority and
___________________
Responsibility.
2. What
is the Style of
___________________
Management
of
your
project?
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Selecting
a project manager
is like selecting managers in
___________________
general.
Explain.
Leadership Factor
PE
276
(c
)U
Style of Management
2.
Notes
Activity
___________________
Discuss
the Planning and
Scheduling of your project.
___________________
___________________
___________________
___________________
PE
277
___________________
___________________
Experience Requirement
___________________
)U
True or False:
(c
1.
2.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
tasks are to be done are usually made by the project team group
heads. These decisions are probably based on policies and
procedures established by their permanent functional department
heads. Thus, the problem of deciding what background a project
manager needs is simpler than for a functional manager.
Notes
PE
278
Decision Making
(c
)U
2.
Successful
project
management
requires
an
understanding of the process used by
functional groups working on the project.
Notes
Activity
___________________
Write
short note on knowing
the people. How these help
your___________________
project?
___________________
___________________
___________________
PE
1.
279
___________________
___________________
___________________
)U
The best equipped person for the position of project manager is one
who knows and understands the working of the project-team group
that will make the most decisions affecting other groups and overall project objectives. Usually, most of such decisions are made by
engineering. Once the work of engineering is finished, the
problems of other groups on the project are "cast in concrete". They
cannot be changed.
(c
2.
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Summary
Notes
This unit lists out and explains the important attributes of a good
project manager. Importance of qualities like managerial skills,
leadership, creativity, decision making etc. has been explained.
The need for a project manager and the authority he should have
in order to fulfil his responsibility has also been explained.
PE
280
Keywords
(c
)U
2.
3.
4.
Further Readings
281
Books
Notes
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
Web Readings
)U
http://www.syntelinc.com/Internal.aspx?id=707
http://99u.com/articles/6946/top-10-characteristics-of-great-projectmanagers
http://www.recruiter.com/i/attributes-of-a-good-project-manager/
(c
http://www.cio.com/article/447182/Six_Attributes_of_Successful_Pr
oject_Managers
___________________
282
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Unit 24
283
Modern Trends
___________________
___________________
___________________
Objectives
Project Engineering
Project Construction
___________________
___________________
PE
After completion of this unit, the students will be aware of the following
topics:
\
Notes
___________________
___________________
___________________
___________________
Introduction
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Provide
a brief history of
project management.
___________________
PE
284
PM Software Categories
(c
)U
Features of PM Software
)U
What-if analysis
Multi-project analysis
(c
Developments in PM Software
During the past few years, all PM software has been improving
using internet technology. Most of the software is web enabled
now-a-days and offer internet based facilities such as:
z
285
Notes
___________________
___________________
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
Activity
___________________
Evaluate
the various software
available for the management
___________________
of your
project.
PE
286
(c
)U
z
Some software requires other data too, e.g. three time estimates,
etc. for simulating a schedule, WBS (work breakdown structure) in
order to organize data as per WBS.
2.
287
Notes
___________________
___________________
___________________
___________________
___________________
PE
)U
MS Project
MS Project has been improving its spread and quality along with
other Microsoft family products. Initially its capabilities were
mainly limited to preparation of bar-charts, PERT networks.
(c
The current version (MS Project 2000) has everything in it, i.e.
schedule, cost and resource planning/control capabilities. Also it
has web-enabled capabilities. MS Project is a MS Office product
and it is very easily available. It is very cheap as compared to P3
and Artemis, etc. It is extremely user friendly. Most of its
icons/commands are in line with other MS Office products.
Milestone
___________________
___________________
___________________
___________________
___________________
288
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
1.
2.
PE
Notes
Activity
___________________
What
is the computer software
used
in
engineering,
___________________
procurement
of a project?
Project Engineering
MicroStation/AutoCAD
(c
)U
Engineering Documentation
Engineering documentation these days is mainly kept in the
electronic (soft) form because:
It is mainly generated in electronic form by use of
AutoCAD/MicroStation software.
Notes
Activity
___________________
Discuss
the
computer
software used in construction
of a___________________
project.
___________________
___________________
___________________
PE
289
___________________
___________________
___________________
)U
2.
Project Construction
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
___________________
___________________
___________________
___________________
PE
290
True or False:
1.
2.
(c
)U
Summary
Keywords
Notes
___________________
___________________
___________________
___________________
___________________
PE
291
___________________
___________________
___________________
___________________
___________________
2.
3.
4.
)U
1.
Further Readings
Books
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Web Readings
http://www.bestpricecomputers.co.uk/glossary/projectmanagement-software.htm
http://bmoj.com/ppeg_lite.pdf
http://1000projects.org/project/civil-engineering-projects-forstudents-pdf/
http://www.stanford.edu/class/cee320/CEE320C/RobertFoxPresent
ation.pdf
(c
)U
___________________
Notes
PE
292
Unit 25
293
Case Study
Notes
___________________
___________________
___________________
Objectives
___________________
___________________
PE
After analyzing this case, the student will have an appreciation of the
concept of topics studied in this Block.
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
The debate on the bill has spawned two stories in the Toronto
Star about potential problems with mining operations in Ecuador,
Argentina, and Papua New Guinea. The stories include responses
from spokespeople of the mining companies involved, but the
exposure of these allegations in a national newspaper has
tarnished the CSR reputation built up by the mining companies
mentioned.
(c
)U
___________________
Notes
PE
294
Notes
___________________
___________________
___________________
___________________
___________________
PE
295
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
296
297
Notes
___________________
___________________
___________________
___________________
___________________
PE
___________________
Question:
___________________
Source: http://www.projectsmart.co.uk/corporate-social-responsibility-and-project-
(c
)U
management.html
___________________
___________________
___________________
298
Notes
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
PE
___________________
Glossary
Glossary
299
Notes
___________________
___________________
___________________
___________________
PE
Actual Cost for Work Performed (ACWP): This represents actual cost
incurred for accomplishing the work performed during a particular time
period.
___________________
Authority: The right to act in a specified way, delegated from one person
or organization to another.
Average Contingency: It is determined by examining the project
definition stage for each code of accounts and applying average
estimating accuracy factors appropriate for the specific project.
Bell Curve: The Bell curve is derived from the "S" curve and shows the
amount of vertical movement of the "S" curves (the rate of progress or
loading) for a finite time.
)U
Bid Price: A bid price is the highest price that a buyer (i.e., bidder) is
willing to pay for a good. It is usually referred to simply as the "bid."
Budgeted Cost for Total Work (BCTW): This is the total budgeted cost
for the entire project work.
Business Case: The information necessary to enable approval,
authorization and policy making bodies to assess a project proposal and
reach a reasoned decision.
Business Risk: Risk caused by the operating environment of the
business.
Capital Costs: One-time setup cost of a plant or project, after which
there will only be recurring operational or running costs.
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
300
(c
)U
Glossary
Notes
___________________
___________________
___________________
___________________
___________________
PE
301
Fixed Capital: It refers to any kind of real or physical capital that is not
used up in the production of a product and is contrasted with circulating
capital such as raw materials, operating expenses and the like.
Float: Float will show up if material deliveries are ahead of the
construction material required dates.
)U
(c
Labour: The aggregate of all human physical and mental effort used in
creation of goods and services.
Leadership: Leadership has been described as a process of social
influence in which one person can enlist the aid and support of others in
the accomplishment of a common task".
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
302
(c
)U
Glossary
Notes
___________________
___________________
___________________
___________________
___________________
PE
303
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
Notes
PE
304
(c
)U
Glossary
Notes
___________________
___________________
___________________
___________________
___________________
PE
"S" Curve: A basic "S" curve is drawn on a grid with a horizontal axis
showing percentage calendar time from 0 to 100% and a vertical axis
showing percentage completion from 0 to 100%.
305
)U
(c
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
___________________
(c
)U
___________________
Notes
PE
306