Plan the project

Question 1

What is a WBS ?

Answer 1

A Work Breakdown Structure (WBS) partitions the project into a set of tasks that

• are independent of each other AMAP
• can be measure, evaluated, independently
• can be integrated together
• and compose altogether the complete project

Question 2

What is a task ?

Answer 2

A task is a documented piece of work, an estimation of resource/time needed, located among other tasks (precedence) and under the responsibility of some people.

Question 3

What is a Gantt chart ?

Answer 3

The Gantt chart shows how long, the scheduling and the responsibility for each task.

Question 4

What is the role of the WBS ?

Answer 4

It allows to detail the project in tasks and validate the whole, to estimate efforts/costs and to get these resources, to define a time table (schedule), to define clear responsibilities, to implement and perform control, to study the risks and to coordinate the people and objectives.

Question 5

What is the RACI Matrix?

Answer 5

The Responsibility-Accountable-Consulted-Informed or RACI matrix identifies for each task who is:

• Responsible: who will be doing this task
• Accountable: who’s head will roll if this goes wrong, who has the authority to take decision
• Consulted: Anyone who can tell me more about this task, any stakeholders already identified ?
• Informed: Anyone whose work depends on this task ? Who has to be kept updated about the progress ?

Question 6

Why develop a schedule ?

Answer 6

The goal is to build a feasible schedule for the project by using the critical path and slack, the earliest completion times, and working with probabilistic task length estimates.

Question 7

Critical Path Method ?

Answer 7

Input: lists of tasks, estimation of length, precedence constraints.

Output: project length, critical path(s) and the slack for non-critical tasks.

1. List the activities, their dependence and their estimated (or known) duration
2. Build a node (with its ID and duration) for each activity + a Start Node + a Finish Node
3. Connect the tasks according to the precedence relations (and simplify)
4. Compute the earliest start and finish times
5. Compute the latest start and finish times
6. Determine the critical path(s) and tasks & determine the slack times

Question 8

How to optimize resource?

Answer 8

1. Resource levelling
2. Project crashing

Question 9

What is levelling?

Answer 9

• Resource leveling is a technique in project management that overlooks resource allocation and resolves possible conflict arising from over-allocation. When project managers undertake a project, they need to plan their resources accordingly.*
• This will benefit the organization without having to face conflicts and not being able to deliver on time. Resource leveling is considered one of the key elements to resource management in the organization.*
• An organization starts to face problems if resources are not allocated properly i.e., some resource may be over-allocated whilst others will be under-allocated. Both will bring about a financial risk to the organization.*

► We take advantage of the slack on some tasks to level/to optimize the resource consumption.

Question 10

What are the two types of crashing ?

Answer 10

1. Crashing with integer
2. Crashing with binary

Question 11

What is Variation ?

Answer 11

Variation comes from many small influences and yields a range values on a particular activity (eg: task X takes 4 days instead of 3). We can anticipate variations by adding buffers that will help the team complete project within a predictable range. The project manager’s role is to be the troubleshooter and expeditor by planning with buffers and using disciplined execution.

Question 12

What is PERT method ?

Answer 12

The aim is to build a probability distribution of the project length. For that we use 4 approximations:

1. Length of the critical path = length of the longest path
2. The tasks along the critical path are independent
3. The length of the critical path has the shape of a Normal distribution (µ, s)
4. Each task has a beta distribution:
   
   • min, mode, max with µ = ( min + 4 mode + max) / 6
   • s = (max-min) / 6

Question 13

What are foreseen uncertainties?

Answer 13

Those are identifiable and understood influences that the team cannot be sure will occur (eg: a part has to be completely reworked).

Question 14

What is the difference between macro and micro-risk ?

Answer 14

It can be seen as the Casino versus the casino player or the insurance company versus the individual. For the macro-risk, it is necessary to estimate the average. For the micro-risk, we are not interested in probability but we want to know the risks in order to monitor, to mitigate.

Question 15

What is the process of risk management ?

Answer 15

1) Identify the risks 2) Analyse risks 3) Prioritize and map risks

Question 16

OR formulation for integer crashing

Answer 16

Question 17

OR formulation for binary crashing

Answer 17

Question 18

How to calculate project value ?

Answer 18

Net Present Value (NPV)

• Calulates the net present value of an investment by using a discount rate and a series of future paymens (negative values) and income (positive values)*
• NPV(rate, value1, value2, …)*
• rate is the rate of dicount over the length of one period
• value1, value2, … are 1 to 29 arguments representing the payments and incomes.

Question 19

What is the IRR ?

Answer 19

It’s the internal rate of return, the interest rate received for an investment consisting of payments (negative values) and income (positive values) that occur at regular periods.

The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Question 20

Is the net present value reliable?

Answer 20

NPV depends on:

• The discount rate (r)
• The number of periods to consider
• The quality of the forecast revenues / expenses

NPV does not take into account the cash flow efforts NPV assumes re-investment at capital rate

Question 21

Is the IRR reliable ?

Answer 21

It depends on

• the number of periods to consider
• the quality of the forecast revenues / expenses

► IRR does not provide an answer in case of different initial efforts IRR assumes re-investment at “IRR” rate.

Question 22

What is the analytic hierarchy process (AHP)?

Answer 22

It was developed by Thomas L. Saaty in the 1970s and has been extensively studied and refined since then. It represents the most accurate approach for quantifying the weights of criteria. Individual experts’ experiences are utilized to estimate the relative magnitudes of factors through pair-wise comparisons. Each of the respondents has to compare the relative importance between the two items under special designed questionnaire (note that while most of the surveys adopted the five point likert scale, AHP’s questionnaire is 9 to 1 to 9

Question 23

What is the Payback Period (PP)?

Answer 23

The payback period is when your cumulated benefits paid back your initial investment.

It could be computed simply as:

PP (in years) = Initial investment / Yearly benefits

(-) Negative aspects are that there is no actualization, it cannot be used for project with different lengths !

(+) Positive is that it is simple and it provides confidence.

Question 24

How to manage foreseen uncertainties ?

Answer 24

Major project risks, or “chance nodes” (circles), can be identified and contingent actions can be planned, depending upon actual events and desired outcomes.

The role of the manager is to be the consolidator of the project achievements by identifying risks, preventing threats and developing contingency plans.

The managing tasks are:

• planning by anticipating alternative paths to project goal by using decision tree techniques
• execution by identifying occurences of foreeen risks and triggering contingencies

Managing relationships ? Planning must be done by increasing awareness for changes, the stakeholders should be informed and motivated to cope with switches in project execution.