Project and Program Management

Question 1

Cost-benefit analysis

Answer 1

estimates the total monetary value of the benefits and costs to the community of a project(s) to determine whether they should be undertaken.
Typically, this is used for public projects such as highways and other public facilities.

Question 2

Cost-effectiveness analysis

Answer 2

a method for selecting among competing projects when resources are limited, was developed by the military.
For example, if a community has $50,000 to spend on park improvements then several different projects can be prepared, such as adding playground equipment or purchasing a new lawnmower.

Question 3

The cost-effectiveness ratio

Answer 3

CE Ratio = (cost of new strategy - cost of current practice)/(effect of new strategy - effect of current practice).

Question 4

Net Present Value

Answer 4

shows the net monetary value of a project, discounted to today’s present value.
For example, if the net present value of a proposed hockey arena is greater than zero then one can conclude that the monetary benefit of the hockey arena outweighs its monetary costs.

Question 5

Net Present Value

Answer 5

To calculate net present value you need to know the years of the project’s lifespan, the quantified monetary benefits, the monetary costs and the interest rate for discounting purposes.

Question 6

internal rate of return

Answer 6

The internal rate of return is a metric used in financial analysis to estimate the profitability of potential investments.
The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis.

Question 7

Project Management Techniques

Answer 7

Goals Achievement Matrix (GAM)
Gantt Chart
Linear programming
Program Evaluation and Review Technique (PERT)
Critical Path Method (CPM)

Question 8

Critical Path Method (CPM)

Answer 8

is a tool to analyze a project.
The analysis results in a “critical path” through the project tasks.
Each project task has a known amount of time to complete and cannot be completed before the previous one is completed.
The longest pathway is the critical pathway.

Question 9

Program Evaluation and Review Technique (PERT)

Answer 9

is a scheduling method that graphically illustrates the interrelationships of project tasks.
PERT is a good choice when precise time estimates are not available for project tasks.
The U.S. Navy developed this method in the 1950s and it is now used widely in the defense industry. The PERT planning process involves the following steps:
• Identify the specific activities and milestones;
• Determine the proper sequence of the activities;
• Construct a network diagram;
• Determine the critical path;
• Update the PERT chart as the project progresses.

Question 10

Linear programming

Answer 10

a project management method that attempts to find the optimum design solution for a project.
This system takes a set of decision variables within constraints and comes up with an optimum design solution.

Question 11

Gantt Chart

Answer 11

was developed in 1917 by Charles Gantt.
This chart focuses on the sequence of tasks necessary for project completion.
Each task is represented as a single horizontal bar on an X-Y chart.
The X-axis is the time scale over which the project will endure. The length of each taskbar corresponds to the duration of each task. The relationship usually shows dependency, where one task cannot begin until another is completed.

Question 12

Goals Achievement Matrix (GAM)

Answer 12

a comprehensive way to evaluate a project.
It consists of a project evaluation matrix that includes competing projects in rows and the evaluation criteria in columns.
The evaluation criteria are based on the various stakeholder groups that may be impacted by the costs or that may receive benefits.
The matrix shows the anticipated attainment of a project’s goals and the assignment of accomplishing a goal to a group.