Chapter 2 Intro to PM book

Question 1

strategic planning

Answer 1

the process of determining long-term objectives by analyzing the strengths and weaknesses of an organization, studying opportunities and threats to the business environment, predicting future trends and projecting the need for new products and services.

Question 2

SWOT Analysis

Answer 2

analyzing strengths, weaknesses, opportunities, and threats

Question 3

Mind mapping

Answer 3

technique that uses branches radiating out from a core idea to structure thoughts and ideas.

Question 4

4 stages of project planning

Answer 4

1. strategic planning 2. Business Area analysis 3. Project planning 4. resource allocation

Question 5

agile

Answer 5

able to move quickly and easily. typically used in software dev. which divides tasks into short phases with frequent reassessment and adaption of plans

Question 6

4 factors affecting organization

Answer 6

1. meeting regulatory, legal and social requirements 2. satisfying stakeholders needs or requests 3. implementing or changing business or technological strategies 4. creating, improving, or fixing products, processes or services.

Question 7

Net present value (NPV) analysis

Answer 7

method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.

Question 8

opportunity cost of capital

Answer 8

the return available by investing the capital elsewhere.

Question 9

cash flow

Answer 9

benefits - cost (income - expense)

Question 10

discount rate

Answer 10

rate used for discounting future cash flows

Question 11

Return on investment

Answer 11

ROI = (total discounted benefits - total discounted costs) /discounted costs)

Question 12

NPV Formula

Answer 12

1. determine discount factor 2. cost *discount factor 3. benefits * discount factor 4. total benefits - total costs

Question 13

discount factor

Answer 13

a multiplier of each year based on the discount rate and year, then applying the cost and benefits for each year

Question 14

required rate of return

Answer 14

minimum rate of return on an investment (some companies require at least 10% return)

Question 15

internal rate of return (IRR)

Answer 15

what discount rate results in an NPV of zero for a project

Question 16

payback period

Answer 16

the amount of time it will take to recoup the total$$ invested

Question 17

weighted scoring model

Answer 17

tool that provides a systematic process for selecting projects based on many criteria (trip example)

Question 18

balanced scorecard

Answer 18

methodology that converts an organizations value drivers to a series of defined metrics (customer service, innovation, operational efficiency, financial performance)

Question 19

Directives

Answer 19

new requirements imposed by management, gov. , or external influence

Question 20

Discretionary costs

Answer 20

costs that organizations have discretion in deciding whether to fund them

Question 21

non discretionary costs

Answer 21

costs that organizations must fund to stay in business

Question 22

opportunity cost of capital

Answer 22

The return available by investing the capital elsewhere

Question 23

Return on investment (ROI)

Answer 23

Benefits-costs/costs