PROJECT MANAGEMENT

CHAPTER 1

What is a PROJECT?
Insurance company is planning to
purchase computers for information
process.
A
steel
plant
is
considering
purchasing a furnace.
Government plans to build a dam.
Mr. X is about to purchase a bike.

 PROJECT -A project is a capital

investment to develop facilities to
provide goods and services.
PROJECT MANAGEMENT - Project
Management
is
the
planning,
analysis, financing, implementation
and review of the resources to
develop facilities in order to provide
goods and services to the society.

CHARACTERISTICS OF
PROJECT

Investment
Benefits
Time period
Social cost and benefit (SCBA)
Location

TYPES OF PROJECTS
Based on Industry
Based on size
Based on objective..etc

PHASES OF PROJECT MANAGEMENT /

PROJECT LIFE CYCLE

Identification
Formulation
Appraisal
Selection
Implementation
Review

Phase 1: Identification
Project identification consists of :
1. Finding projects ideas
2. Choosing the right line of
business
3. Looking for Opportunity

Phase 2: Formulation
Taking a first-look carefully and critically at a
project idea to build up a beneficial project
The aim of project formulation is to achieve
the
project
objectives
with
minimum
expenditure and adequate resource
Project formulation means to check whether
the proposal of project will become reality or
not. For this the entrepreneur must examine
various factors like the capacity of the firm to
produce, the repaying capacity of capital etc

Phase 3: Appraisal
Economic: it means that the project must be
beneficial to the economic development of the
country.
Technical: it means the project must have
appropriate technology and related features.
Managerial: it means the project must have
manpower as required
Operational: it means the capacity of the
project must be feasible
Financial: it means the project must be
financially profitable

Phase 4: Selection
1. Payback period-should be less
then target period.

2. Accounting rate of returnshould be greater than target rate.

3. Internal rate of return-should

be greater than cost of capital.

4. Benefits cost ratio-should be

greater than 1.

Phase 5: Implementation
1. Project engineering and designs- site checking,
preparation, preparation of blue prints, plant designs,
plant engineering, selection of specific machineries
and equipments.
2. Negotiation and contracting- negotiation and
drawing up of legal contracts
3. Construction- site preparation, construction of
buildings and civil works, execution and installation
of machineries and equipments.
4.
Training- training of engineers, technicians,
workers etc.
5. Plant commission- startup of the plant.

Phase 6: Review
Performance review should be done
periodically
to
compare
actual
performance.
It helps in providing the feedback
and taking corrective actions if
required.

PROJECT IDENTIFICATION
Sources of good project ideas
Preliminary screening of ideas
PRESENTATION

PROJECT FORMULATION
Presentation

PROJECT REPORT

Meaning
Scope
Importance
Contents
Proforma
PRESENTATIONS