PROJ 592 Final Exam

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PROJ 592 Final Exam

  1. (TCO B)  Estimating Procedures(a) You are the project manager for a new high-rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $60.00/ton, and the most pessimistic estimate is $160.00/ton. (Note there are 3 data points in for this estimate.)
    What is the expected price of the material?(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons or as much as 56 tons might be required.
    What is the expected amount of the material needed for the project?
    (c) Using the estimates from (a) & (b) what is the expected cost for the material over the life of the project using the COMPLEX method? (Points : 30)
  2.  (TCO B) Contingency Allowance:You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones
    Case$20.00Order of Magnitude
    Keypad$3.00Order of Magnitude
    Circuit boards (handset)$6.50Budget
    Circuit boards (base unit)$8.50Definitive
    Battery$1.20Order of Magnitude
    Charger$16.00Order of Magnitude
     Total cost$78.90NA

    The estimating department currently defines estimate accuracy as follows:

    Order of Magnitude-25%, +85%
    Budget-10%, +25%
    Definitive-5%, +10%

    (a) What contingency cost budget do you recommend for the product?
    (b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 50%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates.

    (Points : 30)

    1. (TCO C) Work Breakdown Structure WBSSpeedy Computer, Inc. (SCI) is going to introduce its first laptop computer. Although SCI recognizes that it is a late entry into the market, it believes that there is room for an inexpensive product at the low end of the market. Its design process will start with a conceptual design performed concurrently with the disassembly and analysis of a select group of the competitor’s products. The best components consistent with the conceptual design will then be used as the basis for the working design.

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4. (TCO A) Budgeting processes and techniques

A company modifies production automobiles to create custom hybrid vehicles for the high-end auto enthusiast market. They develop and build these custom designs as a single unit or at times in multiples of as many as 20 for larger orders. The orders are generated by the marketing department with help from the owners who participate in the management of the company. Each new order is assigned to a project team, which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects.

As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.

What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work. (Points : 30)


1. (TCO C) Schedule Crashing

Using the network below and the additional information provided, find:

(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?


  1. (TCO E) Responsibility Allocation MatrixProjects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.(a) Why is the RAM such an effective tool for Project Managers?
    (b) What are some of the typical responsibilities assigned on a RAM? (Points : 30)
    1. (TCO E) Resource Allocation/LevelingThe following data were obtained from a project to design a new software package:
    ActivityDurationPredecessorsPersonnel / Cost
    A3 days1 Systems Analyst/$260 day
    B6 days3 Programmers/$200 day each
    C4 daysA3 Programmers/$200 day each
    D2 daysC2 Hardware specialists/$230 day each
    E3 daysA1 Systems Analyst/$260 day
    F2 daysD, E1 Test Engineer/$300 day


    Personnel AvailableQuantity
    Systems Analysts1
    Hardware Specialists2
    Test Engineers2

    The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at an 80% cost premium if needed.

    (a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.

    (b) Note that operations can be split if required: what is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 30)

  1. (TCO G) Estimate At Completion forecast (EAC)A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below:
A$8,500$8,500$8,500$ –1.00$7,000$1,4001.21
B$15,000$15,000$15,000$ –1.00$13,000$2,0001.15
E$16,000$0$0$ –$0$ –
Project:$65,00026,93029,200($2,270)0.92$25,200$ 8301.06


(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments.

(Points : 30)


2. (TCO D) PMIS and cost accounting

We have discussed extensively over the past eight weeks the benefits, tools, and methodologies to project monitoring and control. Effective project monitoring requires access to projects data, and therefore a Project Cost Accounting System (PCAS) is essential.

(a) What are the primary types of data collected by such a system?
(b) What are some of the benefits of PCAS? (Points : 30)

  1. (TCO F) Earned ValueThe following data were obtained from a project to design a new software package:
ActivityDurationPredecessorsBudgeted Cost
A3 Days$8,320
B6 Days$11,740
C4 DaysA$11,550
D2 DaysC, B$7,850
E3 DaysA$10,750
F2 DaysD, E$8,600

At the end of day 5, the status of the project is as follows:

Activity% CompleteActual Cost

Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.




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