Homework answers / question archive / Formal Exams SP21, 2020 BX2077 Project Management Venue Seat Number Student Number Family Name First Name ____________________ ________ |__|__|__|__|__|__|__|__| _____________________ _____________________ BX2077 Project Management Formal Exams SP21, 2020 FINAL Examination College of Business, Law & Governance Applied – Calculation Case Scenario Lance, after years as a successful engineering career, has decided to pursue his lifelong dream of opening a photography business

Formal Exams SP21, 2020 BX2077 Project Management Venue Seat Number Student Number Family Name First Name ____________________ ________ |__|__|__|__|__|__|__|__| _____________________ _____________________ BX2077 Project Management Formal Exams SP21, 2020 FINAL Examination College of Business, Law & Governance Applied – Calculation Case Scenario Lance, after years as a successful engineering career, has decided to pursue his lifelong dream of opening a photography business

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Formal Exams SP21, 2020 BX2077 Project Management Venue Seat Number Student Number Family Name First Name ____________________ ________ |__|__|__|__|__|__|__|__| _____________________ _____________________ BX2077 Project Management Formal Exams SP21, 2020 FINAL Examination College of Business, Law & Governance Applied – Calculation Case Scenario Lance, after years as a successful engineering career, has decided to pursue his lifelong dream of opening a photography business. Lance has been dabbling in photography for a number of years and has become quite the master. His primary products include pictures of the Australian outback. Lance has been selling his products at local markets, arts and craft fairs, and at local businesses. Business has been picking up significantly and Lance feels that now is the time to launch a website for his business. Lance wants a website that will showcase his products, allow secure online ordering, and has social media capability. In addition, Lance would like to provide videos on the process of taking amazing photos. The videos will be free for a two week period and then there will be a nominal monthly subscription fee. This monthly fee will allow one to watch unlimited videos and download samples of his work. Lance wants to add enough videos to get the subscription service started and then he will add additional new videos each month. He contacts Leigh, a family friend, who owns a software and website development business. They meet for lunch and Lance gives her all the specific requirements for the website. Lance would like to have a website launched in less than three weeks. He will be a vendor at a large art show in six weeks and wants a website in place so potential visitors can peruse his products prior to the show. Leigh is happy to help Lance with the website and carefully takes notes of all his website requirements. She tells Lance that she needs to estimate how long the website project will take given that she and her employees are in the midst of several projects. However, she promises that she will try her best to have the project completed within three weeks. Lance tells Leigh that he is willing to pay extra in order to have the website completed within a three week period. Leigh goes back to her office and puts together the project activities, the time to complete each activity, and whether an activity time can be reduced (crashed) by hiring additional workers. She does not want to begin shooting videos for the subscription service (Activity J) until the videos for photography are complete (Activity B). Table 1 provides the activity, description, time to complete an activity, predecessors, and the maximum amount that an activity can be crashed (completion time reduced). Leigh needs your help. Her project management expert is on vacation this week. Page 1 of 5 Formal Exams SP21, 2020 BX2077 Project Management Table 1 Predecess or Activity Description A B Sample pictures Videos on how to take pictures Design of the website and main page Design of the website and catalogue Design of the website ordering systems Completion of the website main page which includes pictures and videos Review and changes of the website main page Completion of the product catalogue and ordering systems Review and changes to the product catalogue and ordering systems Videos for the subscription system Design of the website subscription section Social media Final website integration, review and changes C D E F G H I J K L M Est. Time (days) 3 5 Max crash amount 1.5 3 2 1 2 1 2 1 A, B, C 2 1 F 1 0 A, B, D, E 2 1 H 1 0 B 15 5 J 2 1 J G, I, K, L 2 2 1 0 Page 2 of 5 Formal Exams SP21, 2020 BX2077 Project Management FORMULA SHEET BUDGET , COSTS & SCHEDULE: Total Budgeted Costs (TBC) = summed costs of each individual work-package for an activity Actual costs (AC) = actual costs of work done in that activity Planned Value (PV) = Cumulative Budgeted Costs (CBC) = sum of all TBC for each activity Rate of Performance (RP) = Actual work completed/percentage of work planned to have completed Earned Value (EV) = % Complete x TBC (for the activity) = PV to date x RP Cost Performance Index (CPI) = EV/AC Cost Variance (CV) = EV – AC Schedule Variance (SV) = EV - PV Scheduled Performance Index (SPI) = EV/PV Forecasted Cost to Completion (FCAC) = TBC / CPI Estimated Time to Completion = Original Completion Time Estimated/SPI Page 3 of 5 Formal Exams SP21, 2020 BX2077 Project Management PART A (20 marks) 1) Develop a project network diagram that shows all the activities and precedence relationships. Explain the importance of a network diagram for project management, providing examples of the benefits. (7 marks) 2) Determine the critical path activities. Describe the critical path, why it exists and provide justification for including those activities illustrated. (7 marks) 3) What is the shortest time that the project can be finished if crashing is allowed? Discuss why a project may require to be crashed, providing a specific example drawn from the provided case study. (6 marks) Page 4 of 5 Formal Exams SP21, 2020 BX2077 Project Management PART B (30 marks) The financials for the project are listed below and forecast for the first 24 days of the project. Considering the table below, calculate the following schedule and cost variances, providing a brief paragraph explaining why each calculation is relevant to project management. a) What is the Earned value and the planned value? 8 marks b) What is the Estimated Time to Completion? 8 marks c) What is the Actual cost of work performed (AC)? 6 marks d) Is this project on track to be completed on budget and time? 8 marks Activity A B C D E F G H I J K L M 0 1000 Total Cumulative Actual Cumulative Actual 1000 1000 2500 2500 4 2000 500 500 3000 4000 5100 7600 8 3000 5000 0 800 400 12 3000 0 1000 16 3000 0 800 400 200 800 2000 400 500 1000 500 500 1000 2000 10700 14700 12700 20300 5900 20600 6400 26700 9700 30300 10600 37300 Page 5 of 5 20 1000 5000 1000 500 7500 37800 9000 46300 24 Total 1000 5000 4000 2000 3500 6000 2000 2000 25500 63300 0 13000 10500 1500 800 2000 1400 7200 4400 3000 5500 8000 4000 2000 63300 % Complete 80% 100% 100% 100% 100% 20% 30% 10% 20% 20% 40% 40% 10% PART A Project network diagram is a graph that displays the activities, duration and its dependencies of tasks within the project. It is beneficial to a project manager as it allows them to track down every activity of the project and in turn can give quick responses regarding the status of the project. Project network diagram provides a clear visual representation of the progress to the relevant stakeholders. It also allows the project manager to establish project workflows. In the case of lance, he can monitor the progress of the activities by understanding which activities to perform first and which to follow. Activity A comes before activity F for the case of lance since activity F depends on activity A for completion. With the help of a project network diagram the project manager and all stakeholders can identify any potential limitations of the project. Critical path entails the longest path activities of a project must complete to successfully complete the project from start to conclusion. Critical path exists to determine the time deadlines and provides clear work schedules for the project. It also identifies the most important activities within the project to ensure they have timely completion. The shortest time to complete the project if crashing is allowed is 9 days. Crashing is essential for a project as it shortens the time duration for the project than the actual planned time and maintains minimum costs for the project. PART B Earned value of a project helps the project manager measure the overall performance of the project. It considers the status of the project by considering time and cost of the project while planned value entails the budget authorized for the project which serves as a baseline in measuring performance. Early Termination Decision Rules Costs exceed business benefits - Failure to meet strategic fit criteria Deadlines continue to be missed . Technology evolves beyond the projects scope Sequence Activities Four Steps: 1. Place a successor activity after its predecessor 2. Draw an arrow to show the relationship 3. Continue until all activities have been placed on the work surface 4. Dependencies can be mandatory or discretionary Discounted Cash Flow The value of a stream of cash inflows and outflows in today's dollars (Net Present Value) Also know as discounted cash flow or just discounting Widely used to evaluate projects Includes the time value of money Includes all inflows and outflows, not just the ones through payback point