major limitation of the payback model | My Assignment Tutor

Instructions Sheet Write all answers in the spaces provided in this examination paper. Answer all eight questions. TOTAL                                                                                                                      50 MARKS Students MUST answer all EIGHT questions. Write ALL answers in the space provided in this examination paper.   Question 1                                                                                                                 6 Marks       According to Gray & Larson, a project life cycle typically passes through four stages.  Sketch a graph below showing the 4 stages, when they occur, the relative amount of time in each stage and the relative amount of effort for each stage. The y axis should represent the “level of effort” and the x axis should represent time.  Be sure to label each stage on your graph.   (3 marks) Question 1 continued over page Question 1 (continued) Two new projects are proposed to a young start-up company. Project A will cost $200,000 to develop and is expected to have annual net cash flow of $30,000. Project B will cost $250,000 and is expected to have annual net cash flow of $50,000. Using the payback period, which project is better from a cash flow standpoint? Explain your answer. Show all your calculations in your answer below:                                                                                   (2 marks) Calculation of Payback Period for Project A   Calculation of Payback Period for Project B   Project Selected (and reason) What is the major limitation of the payback model and what is an alternative model you could use that does not have that limitation?                                                        (1 mark) Question 2                                                                                                                 4 Marks You work for JJHearBetter, a company that has been a market leader in hearing aids for the last 20 years. Your Research and Development department believes that it has come up with an affordable new technology to create smaller, better and cheaper hearing aids.  A project to build and trial a prototype device is approved by senior management.                                                                                                                                                      What kind of project organisational structure (functional, matrix or dedicated team) would you recommend they use for this project? You must explain the reasons for your choice.         (1 mark) What additional information would you like to have to make this recommendation? In your answer you must explain how each additional piece of information would influence your recommendation.                                                                                           (3 marks) Question 3                                                                                                                 6 Marks In traditional project management “scope creep” can result in projects going over budget and not being delivered on time. However, there are times when the scope of the project needs to be changed. What needs to be done to manage changes to scope in traditional project management?                                                                                                (2 marks) Explain how scope management is different on agile projects.             (2 marks) What are the three main requirements for Agile Project Management to be effective?        (2 marks) Question 4                                                                                                                 7 Marks The function point count for a software project was calculated to be 1320. Base the following estimates on this function point calculation.    Assuming that historical data indicates that five function points equals one person month and that six people can work on the project simultaneously, what is the minimum estimated project duration? You must show all your working and your final answer below. (1 mark)      If the project must be completed in 12 months what is the minimum number of people that will be needed for this project (again assuming that they could all work productively on the project simultaneously)? You must show all your working and your final answer below.                                                                                                                        (1 mark) Is it a good or bad idea to add slack (i.e. “padding”) to individual task estimates? You must justify your answer by discussing the likely impact and any ethical considerations that might be relevant.                                                                                                             (2 marks) Question 4 continued over page  Question 4 (continued) Explain how the project manager, parent organisation and professional bodies can influence how the members of the project team will respond to ethical dilemmas. (2 marks) The Punctuated Equilibrium model of team development suggests that major transitions in productivity occur as a result of changing behaviour patterns at the midpoint of assigned deliverables.  What can Project managers do to take advantage of this phenomenon when planning projects?                                                                                              (1 mark) Question 5                                                                                                                 7 Marks With the use of examples, describe two of the four “risk response” strategies for negative risk. Provide a realistic example of each.                                                             (2 marks) With the use of examples, describe two of the four “risk response” strategies for positive risk (i.e. opportunities). Provide a realistic example of each.                           (2 marks)   Question 5 continued over page  Question 5 (continued)   What is the purpose of maturity models?                                                       (1 mark) What are retrospectives?                                                                                  (1 mark) Given the cost/schedule graph provided below: How is the project performing with respect to the budget? Explain your answer.                                                                                                                              (1 mark) Question 6                                                                                                                    6 Marks This question (and question 7) relates to the project described in the network diagram below. Question 6 continued over page Question 6 (continued) Given that the customer would like the project completed in 16 weeks, complete the table below listing the following values for each activity: earliest start time (ES), earliest finish time (EF), latest start time (LS), latest finish time (LF), total slack (TS).      (3 marks) ActivityESEFLSLFTSA     B     C     D     E     F     G     H     I      What is the most critical path(s) for this project? If there is more than one path, list the activities on each path separately.                                                                 (1 mark) Question 6 continued over page Question 6 (continued) Only the activities in the following table can be shortened (crashed). They can all be crashed by up to 2 weeks. The costs to crash each activity are shown in the table.  ActivityCost to shorten task by 1 weekA$300B$500C$2000D$250F$750G$900H$400I$700 Note that activities not listed in the table cannot be crashed. You are required to shorten the project in the network diagram by 1 week less than your earliest finish time for the lowest possible cost.  What activity or activities would you shorten/crash to achieve the reduction in the project duration of 1 week and why? You must explain your choice(s).              (1 mark) In some circumstances it may be possible to shorten the critical path and also save money. Explain when this could occur.                                                                 (1 mark) Question 7                                                                                                                    5 Marks This question relates to the project described in the network diagram and resource requirements table below.  The network diagram is the same as question 6. The network diagram is reproduced below for convenience. Question 7 continued over page  Question 7 (continued) Resource Requirements TaskResources (workers) required for the duration of the taskA2B3C3D2E1F3G1H1I5 Assume that the number of workers required for a task does not change for the duration of the task. Complete the table below to show the current resource requirements for the      duration of the project.                                                                                                               (2 marks)    MONTHS1234567891011121314151617181920A                    B                    C                    D                    E                    F                    G                    H                    I                    Total number of workers                     Question 7 continued over page Question 7 (continued) You are informed that resources are constrained for the project and you can only have a maximum of 5 workers working on the project at any one time. Perform resource constrained scheduling for this project using the priority rules described in this unit. Show the final result in the table labelled “Final Answer”.  You are provided with extra tables to show your working.       (2 marks)    MONTHS1234567891011121314151617181920A                    B                    C                    D                    E                    F                    G                    H                    I                    Total number of workers                        MONTHS1234567891011121314151617181920A                    B                    C                    D                    E                    F                    G                    H                    I                    Total number of workers                     Question 7 continued over page Question 7 (continued)    MONTHS1234567891011121314151617181920A                    B                    C                    D                    E                    F                    G                    H                    I                    Total number of workers                     Final Answer:    MONTHS1234567891011121314151617181920A                    B                    C                    D                    E                    F                    G                    H                    I                    Total number of workers                     Has the resource constrained scheduling had an impact on the sensitivity of the network? Explain you answer clearly with specific reference to the tasks in the project.                                                                                                                                   (1 mark)   Question 8                                                                                                                    9 Marks The formulae required to answer this question are provided in the table below. ValueDescriptionFormulaEVEarned ValueEV =% completed *original budgetCVCost varianceCV = EV-ACSVSchedule VarianceSV = EV-PVCPICost performance indexCPI =EV/ACSPISchedule performance indexSPI =EV/PVEACfForecasted estimate of completion or forecasted cost at completion (if we continue at the same efficiency on the project)EACf  = AC + [(BAC-EV)/CPI]   BAC is the total planned value of the project This question relates to the following network diagram and baseline budget table. Question 8 continued over page Question 8 (continued) TaskTBCMonth1234567891011121314151617181920A 202020                 B 10151510                C    10151540404040          D     2525252525252525        E     1025302510           F             30303030    G                 40404040Total                     Cumulative                      Table 1: Budget Table (values are in thousands of dollars) Question 8 continued over page Question 8 (continued) Complete the following table to provide a status report for the project at the end of month 7:                                                                                                                          (3 marks) End of Month 7ActivityActual % completeEV (Earned Value)AC (Actual Cost)PV (Planned Value)CV (Cost Variance)SV (Schedule Variance)A100% 55   B100% 45   C60% 120   D15% 40   E90% 80         F0% 0   G0% 0   Cumulative totals      Table 2: Status Report (Actual costs are in thousands of dollars) Based on the data in tables 1 and 2 (and any necessary calculations you need to perform using this data), complete the following assessment of the project status at the end of month 7 by completing (i) – (iv) in the sentences below.                                                        You are required to either fill in the dollar value in the blanks or circle the correct answer where you are given a choice of answers.   Note: When answering the questions below requiring a dollar value, show the exact amount (e.g. $100,000) not in thousands of dollars as shown in Tables 1 and 2. Show all your working clearly in Tables 1-2 and in the space provided at the end of the question. The project is currently (i) $_________        (ii) (under) /  (over) budget (1 mark) Question 8 continued over page Question 8 (continued) There is (iii) $                          worth of (iv) (additional work that has been done) / (work that was supposed to have been done that has not been done).                                                                                        (1 mark) What additional data/information other than the SV (or SPI) should the project manager take into consideration when assessing the status of the project schedule? Based on this additional consideration, comment further on the status of the schedule for this project in month 7.    (2 marks) Question 8 continued over page Question 8 (continued) If this project has a priority matrix that is time-constrain, scope-enhance, cost-accept, make very specific suggestions (with justification) about what the project manager should do in his/her role as project manager to address any issues you have identified regarding the current status of the project.                                                                                                                                                                                                                       (2 marks) –  End of paper –


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