Jomo Kenyatta University Of Agriculture And Technology University Examination 2012 ZETECH COLLEGE Project Management Assignments DUE

DATE: 6th October 2012

Instructions i. All questions in this Test are compulsory ii. Ensure you write your correct Registration Number and your Official Names on the answer sheets iii. All answers must be hard-written Assignment 1 i. ii. Explain the main reasons for fuzzy project objectives/ goals at the project start [5 Marks] How does the percentage method for cost estimation work? [5 Marks] The percentage of completion method involves, as the name implies, the ongoing recognition of revenue and income related to longer-term projects, so that some result from a project can probably be recorded in every accounting period. The method works best when it is reasonably possible to estimate the stages of project completion on an ongoing basis, or at least to estimate the remaining costs to complete a project. Conversely, this method should not be used when there are significant uncertainties about the percentage of completion or the remaining costs to be incurred. The estimating abilities of a contractor should be considered sufficient to use the percentage of completion method if it can estimate the minimum total revenue and maximum total cost with sufficient confidence to justify a contract bid.

The steps needed for the percentage of completion method are as follows: 1. Subtract total estimated contract costs from total estimated contract revenues to arrive at the total estimated gross margin. 2. Measure the extent of progress toward completion, using one of the methods described above. 3. Multiply total estimated contract revenue by the estimated completion percentage to arrive at the total amount of revenue that can be recognized. 4. Subtract the contract revenue recognized to date through the preceding period from the total amount of revenue that can be recognized. Recognize the result in the current accounting period. 5. Calculate the cost of earned revenue in the same manner. This means multiplying the same percentage of completion by the total estimated contract cost, and subtracting the

amount of cost already recognized to arrive at the cost of earned revenue to be recognized in the current accounting period.

Assignment 2 i. There are several reasons for change requirements during the project progress. Name some reasons using a project of your choice (e.g. the development of the A380)! [6 Marks] The business needs have changed Business needs are changing ever more rapidly, particularly as competitors explore the new business models of eCommerce. All businesses must be willing to change if they are to remain competitive. It is surprisingly common to find that the organisation undergoes some form of restructuring during the life of a project. This could involve mergers, acquisitions, being taken over, new departments, new business leaders, new products, new accounting structures, new locations etc. The available technology improves constantly. All the time your Project Team are trying to exploit the various technology components, each of those components has a large team of people working to create a better version - and thus to make your version obsolete. Although the scope and objectives of your project remain valid, the organisation may decide that there are other business needs that have high priority and should be addressed. Organisations are responding to the rapidly changing marketplace by forming new business partnerships and alliances. New business channels are becoming available through those relationships, eg using industry hub portals and intermediaries. There may be unavoidable external requirements over which you have no control, such as new regulations for data privacy, changed regulatory reporting requirements etc. The organisation is making progress in presenting and managing itself as a global entity and, hence, there are new or revised standards for such things as website design, database definitions, corporate knowledge sharing, data warehouses etc. Other initiatives within the organisation result in revised needs for this project, eg there is a new accounting system so the interface from our new system will have to be changed. Or, to put it more discreetly, elements of the project's design and deliverables do not fully meet the defined need and will need to be re-worked.

The organisation has changed

Exploit technology improvements

The organisation's priorities have changed New business partners and channels

New legislation and regulations Globalisation, standards etc

Affect of other projects and initiatives We messed up

ii.

Describe techniques that helps to identify risks in a project

[14 Marks]

Root cause identification. This is an inquiry into the essential causes of a projects risks. It sharpens the definition of the risk and allows grouping risks by causes. Effective risk responses can be developed if the root cause of the risk is addressed. Strengths, weaknesses, opportunities, and threats (SWOT) analysis. This technique ensures examination of the project from each of the SWOT perspectives, to increase the breadth of considered. Our project team used this technique to more fully examine the risks that had been identified. Checklist Analysis. Risk identification checklists can be developed based on historical information and knowledge that has been accumulated from previous similar projects and from other sources of information. This Brainstorming. The goal of brainstorming is to obtain a comprehensive list of project risks. Ideas about project risk are generated under the leadership of a facilitator. Categories of risk such as a risk breakdown structure can be used as a framework. Risks are then identified and categorized by type of risk and their definitions are sharpened. Delphi technique. The Delphi technique is a way to reach a consensus of experts. A facilitator uses a questionnaire to solicit ideas about the important project risks. The responses are summarized and are then sent back to the experts for further comment. Consensus may be reached in a few rounds of this process. The Delphi technique helps reduce bias in the data and keeps any one person from having undue influence on the outcome. Assumptions Analysis. Every project is conceived and developed based on a set of hypotheses, scenarios, or assumptions. Assumptions analysis is a tool that explores the validity of assumptions as they apply to the project. It identifies risks to the project from inaccuracy, inconsistency, or incompleteness of assumptions. Diagramming Techniques. Risk diagramming techniques may include: o Cause-and-effect diagrams. These are also known as Ishikawa or fishbone diagrams, and are useful for identifying causes of risks. o System or process flow charts. These show how various elements of system interrelate, and the mechanism of causation. Seeing the flow sometimes triggers someone to identify a risk that may have slipped through the cracks. o Influence diagrams. These are graphical representations of situations showing causal influences, time ordering of events, and other relationships among variables and outcomes.

CAT 1 i. Describe any two types of projects that can be undertaken [4 Marks] Market-driven: Producing a new product in response to market needs. For example, a software company sells products and maintains market share by creating quality programs that meet consumer needs. Crisis-driven: Quickly solving a specific problem. For instance, in response to defective automobile tires, a manufacturer may quickly organize a project to manage their recall and replacement, and create a public relations campaign to address the issue.

ii.

Project estimation helps in getting a rough idea on time, resources and funds required to complete a project. Discuss any two estimation methods [4 Marks] Expert judgment is an estimating technique that relies on the experience of others to provide cost or duration estimates. It involves consulting with experts who, based on their history of working on similar projects, know and understand the project and its application. Parametric modeling uses mathematical parameters to predict project costs. The accuracy and availability of parametric estimates vary widely. In industries where accurate metrics have been developed over time, it is wise to use them.

iii.

Discuss the differences that exist between a Program Evaluation Review Technique (PERT) and a Gantt Chart [2 Marks] PERT chart is a technique for scheduling a project based on individual tasks or activities whereas Gantt Chart is a bar chart that represents the tasks and activities of the project schedule.