Chapter 2 Intro to PM book Flashcards
strategic planning
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.
SWOT Analysis
analyzing strengths, weaknesses, opportunities, and threats
Mind mapping
technique that uses branches radiating out from a core idea to structure thoughts and ideas.
4 stages of project planning
- strategic planning 2. Business Area analysis 3. Project planning 4. resource allocation
agile
able to move quickly and easily. typically used in software dev. which divides tasks into short phases with frequent reassessment and adaption of plans
4 factors affecting organization
- 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.
Net present value (NPV) analysis
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.
opportunity cost of capital
the return available by investing the capital elsewhere.
cash flow
benefits - cost (income - expense)
discount rate
rate used for discounting future cash flows
Return on investment
ROI = (total discounted benefits - total discounted costs) /discounted costs)
NPV Formula
- determine discount factor 2. cost *discount factor 3. benefits * discount factor 4. total benefits - total costs
discount factor
a multiplier of each year based on the discount rate and year, then applying the cost and benefits for each year
required rate of return
minimum rate of return on an investment (some companies require at least 10% return)
internal rate of return (IRR)
what discount rate results in an NPV of zero for a project
payback period
the amount of time it will take to recoup the total$$ invested
weighted scoring model
tool that provides a systematic process for selecting projects based on many criteria (trip example)
balanced scorecard
methodology that converts an organizations value drivers to a series of defined metrics (customer service, innovation, operational efficiency, financial performance)
Directives
new requirements imposed by management, gov. , or external influence
Discretionary costs
costs that organizations have discretion in deciding whether to fund them
non discretionary costs
costs that organizations must fund to stay in business
opportunity cost of capital
The return available by investing the capital elsewhere
Return on investment (ROI)
Benefits-costs/costs
