project, Appraisal, Planning & Control

8/12/2019 project, Appraisal, Planning & Control

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PROJECT APPRAISAL, PLANNING & CONTROL 12MBAFM425

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Questions and Answers

Module -1

1. Define project management. June/July 2011, June/July 2009

Project management is the discipline of planning, organizing, motivating, and controlling

resources to achieve specific goals

2. Describe the importance and difficulties of capital investment. July 2009

Measurement problems, uncertainty and Temporal spread

3. Why are capital expenditures often the most important decisions taken by a

firm? June/July 2011

Capital Expenditure or capital Investment Involves a current outlay (or future outlay) of

funds on the expectation of a stream of benefits extending far into the future.

4. Discuss the five broad phases of capital budgeting. June/July 2011, June /July

2009, July 2010

PHASES OF CAPITAL BUDGETING

Capital budgeting is a complex process that may be divided into six broad phases:

1. Planning

2.

Analysis3. Selection

4. Financing

5. Implementation

6. Review

1. Planning:

It is concerned with the articulation of its broad investment strategy and the generation and

preliminary screening of project proposals.

This provides the framework, which shapes, guides, and circumscribes the identification

of individual project opportunities.

2. Analysis


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If the preliminary screening suggests that the project is prima facie worthwhile, a detailed

analysis of the marketing, technical, economic, and ecological aspects is undertaken.

The focus of this phase is on gathering, preparing, and summarizing relevant information

about various project proposals, which are being considered for inclusion in the capital

budget.

3. Selection

It addresses the question--- Is the project worthwhile? A wide range of appraisal criteria

has been suggested to judge the worthwhile ness of a project.

They are divided into two broad categories, viz., non-discounting criteria (e.g. payback

period and accounting rate of return) and discounting criteria (e.g. net present value, the

internal rate of return)

4. Financing

Two broad sources of finance for a project are equity and debt. Equity consists of paid-up-

capital, share premium and retaining earnings.

Debt consists of term loans, debentures and working capital advances.

Flexibility, risk, income, control and taxes are the key business considerations that

influence the capital structure decision and the choice of specific instruments of

financing.

5. Implementation

It involves setting up of manufacturing facilities, consists of several stages: (i) project and

engineering designs, (ii) negotiations and contracting (iii) construction, (iv) training and (v) plant

commissioning.

6. Review

Performance review should be done periodically to compare actual performance with projected

performance.

A feedback device is useful in several ways: (i) it throws light on how realistic were theassumptions underlying the project; (ii) it provides a documented log of experience that is

highly valuable in future decision-making; (iii) it suggests corrective action to be taken in

the light of actual performance; (iv) it helps in uncovering judgmental biases; (v) it

induces a desired caution among project sponsors.


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5. Explain the difficulties faced in capital expenditure decisions. June /July 2009

Characteristics Operating Administrative Strategic

decisions decisions decisions

1. Level of decision Lower level Middle level Top level

2. Structure of decision Routine Semi-structured Unstructured

3. Level of resource

commitment Minor Moderate Major

4. Time Horizon Short- term Medium-term Long-term

6. Explain the nature of BCG product matrix & GE stop light matrix as a planning tool. Dec/Jan

2009, June/July 2011

BCG Product Portfolio Matrix

It is a tool for strategic (product) planning and resource allocation. The Boston

Consulting Group (BCG) product portfolio matrix analyses products on the basis of (a)

relative market share and (b) industry growth rate.

The BCG matrix classifies products into four broad categories as follows:

BCG Product Portfolio Matrix

High Low

High Stars Question

Marks

Low Cash

Cows

Dogs

1. Stars:

Products which enjoy a high market share and a high growth rate are referred to as stars.


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Though they earn high profits, they require additional commitment of funds because of the need

to make further investments for expanding their production and sales.

2. Question Marks:

Products with high growth potential but low present market share are called question marks.

Additional resources are required to improve their market share and potentially convert them into

stars. Of course, their is no guarantee that this would happen.

3. Cash cows:

Products which enjoy a relatively high market share but low growth potential are called cash

cows. The generate substantial profits and cash flows but their investment requirements are

modest.

4. Dogs:

Products with low market share and limited growth potential are referred to as dogs. Since the

prospects for such products are bleak, it is advisable to phase them out rather than continue with

them.

From the above description, it is broadly clear that cash cows generate funds and dogs if

divested, release funds. Stars and question marks require further commitment of funds.

7. What is abandonment analysis in Project review? Describe the general procedure of this

analysis. June/July 2011

Project Abandonment Analysis is a process that organizations should execute before making

decisions upon stopping or continuation of their projects. This analysis embraces economic and

administrative considerations that an organization should give to their projects prior to making a

well-grounded project continuation vs. abandon decision when it is necessary for an organization

to cease some of their projects for the sake of a better viability of their other projects.

8. What conditions should the capital budget satisfy in order to be meaningful and viable? June /July2009

Project budget can be prepared in many types identify the different kinds of budgets that you

enter for your projects. Every project budget that you enter is classified by a budget type.


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Each budget type is defined as either a cost budget type or a revenue budget type. For budgets

using cost budget types, you can enter quantities, raw cost, and burdened costs. For budget using

revenue budget types, you can enter quantities and revenue amounts.

You can use any budget type for project status tracking.

Oracle Projects predefines four budget types:

o Approved Cost Budget

o Approved Revenue Budget

o Forecast Cost Budget

o

Forecast Revenue Budget

9. Discuss the influence of Intuition and judgement in capital budgeting. What factors

influence judgement? Dec/Jan 2009

Refer the above answer for the same.

10.What are the three important reasons which make capital investment decisions

important? Dec/Jan 2009

a. Return on Investment

b.

Company extensions

c. Profit maximization

11. What are the sources of net present value? June/July 2011

a. Economies of Scale

b. Product Differentiation


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c. Cost Advantage

d. Marketing Reach

e. Technological Edge

f. Govt. Policy

12.Explain the essential elements/steps involved in the project planning process.June/July 2011

1. Compatibility with the promoter

2. Consistency with governmental priorities

3. Availability of inputs

4. Adequacy of market

5. Reasonableness of cost

6.

Acceptability of risk leve

13. What is a work schedule and what is its purpose?Dec/Jan 2009

Work schedules are up to an employer to set and enforce, i.e., scheduling of employees

is entirely within the employer's control, and it is up to the employees to comply with

the schedule that is given to them.

With only extremely narrow exceptions relating to certain regulated industries or

collective bargaining agreements, adults, as well as youths ages 16 or 17, may work,and/or may be required to work, unlimited hours each day (the only limits are employee

morale, practical realities, and common sense in general).


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Module-2

1. Distinguish between the physical life and economic life of an asset. How would you determining

the latter?Dec/Jan 2010

The expected period of time during which an asset is useful to the average owner. The economic

life of an asset could be different than the actual physical life of the asset. Estimating the

economic life of an asset is important for businesses so that they can determine when it is

worthwhile to invest in new equipment. In addition, businesses must plan so that they have

sufficient funds to purchase replacements for expensive equipment once it has exceeded its

useful life.

2. Discuss various elementary investment options, which influence resource allocation.July 2012

The following are the elementary investment options:

Replacement & Modernization

1. Capacity expansion

2. Vertical Integration

3. Concentric diversification

4. Conglomerate diversification

5. Divestment

3. Problem on Rankingof Five ProjectsDec/Jan 2009

Five Basic Steps for a Successful Project Management

1. Get the right staff for the right work.

2. Map out Procedures and make them understandable.

3. Get the right directions and make sure that people do not have doubts.

4.

Follow Up; Even more communication.

5. Respect

4. Explain the Jury of Executive method and Delphi method of demand forecasting. Dec/Jan 2009

Demand forecasting is the activity of estimating the quantity of a product or service that

consumers will purchase. Demand forecasting involves techniques including both informal


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methods, such as educated guesses, and quantitative methods, such as the use of historical sales

data or current data from test markets. Demand forecasting may be used in

making pricing decisions, in assessing future capacity requirements, or in making decisions on

whether to enter a new market.

The Delphi method is a structured communication technique, originally developed as a

systematic, interactive forecasting method which relies on a panel of experts

In the standard version, the experts answer questionnaires in two or more rounds. After each

round, a facilitator provides an anonymous summary of the experts forecasts from the previous

round as well as the reasons they provided for their judgments. Thus, experts are encouraged to

revise their earlier answers in light of the replies of other members of their panel. It is believed

that during this process the range of the answers will decrease and the group will converge

towards the "correct" answer. Finally, the process is stopped after a pre-defined stop criterion

(e.g. number of rounds, achievement of consensus, stability of results) and

the mean or median scores of the final rounds determine the results

5. What are the sources of project ideas? Dec/Jan 2009

1.SWOT Analysis

2.Clear Articulation of Objectives

3.Fostering a Conducive Climate

6. What are the pre requisites for successful project implementation. Dec/Jan 2009

Prepare the infrastructure.

Coordinate with the organizations involved in implementation.

Implement training.

Install the production solution.

Monitor the solution

7. Explain in detail the project implementation strategies .Dec/Jan 2009

If the only action by an executive is the assignment of a project manager, is it reasonable for that

executive to expect that something special will happen next? Many strategic projects fail to gain

total acceptance within an organization, thereby stalling effective project management initiatives.

Gaining "buy in" is imperative to achieving the desired results. Whether it is with a dynamic

personality, a compelling story, or a media blitz, implementing project management can take on


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a life of its own given the right force. As many people find out, after the big kickoff meeting

there needs to be something else that continues to breathe life into the large strategic projects and

keeps the momentum going in the right direction.

8. Discuss the biases of cash flow. July 2009

The Typical Pattern

i. At beginning of the project, some amount must be spent to invest in the

project (Initial outlay)

1. Subsequent cash flows tend to be positive

Project Cash Flows Are Incremental

ii. What cash flows will occur if we undertake this project that wouldnt

occur if we left it undone and continued business as before

Sunk Costs

Costs that have already occurred and cannot be recoveredshould not be included in

projects cash flows

Only future costsare relevant

Opportunity Costs

What is given up to undertake the new project

The opportunity cost of a resource is its value in its best alternative use ,For instance, if

firm needs a new warehouse, it could either:

9. What are the various methods of demand forecasting? July 2013, June/July 2009

Qualitative methods

i. Jury of executive method

ii. Delphi method

Time series projection methods

iii. Trend projection

iv.

Moving average

Causal methods

v. Consumption level method

vi. End use method

vii. Econometric method


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10.Explain Porters model of profit potential of industries. June/July 2009

Threat of New Entrants

Rivalry amongExisting firms

Bargaining Power of Buyers

Bargaining Power of Suppliers

Threat of Substitute Products

11. Problem on RiskAnalysis & Selection of ProjectsJune /July 2009, July 2012

The expected period of time during which an asset is useful to the average owner. The

economic life of an asset could be different than the actual physical life of the asset.

Estimating the economic life of an asset is important for businesses so that they can

determine when it is worthwhile to invest in new equipment. In addition, businesses must

plan so that they have sufficient funds to purchase replacements for expensive equipment

once it has exceeded its useful life.


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Module-3

1. Describe important investment criteria. June/July 2011, June/July 2009

1.Discounted Cash Flow (DCF) Criteria

a.

Net Present Value (NPV)

b. Internal Rate of Return (IRR)

c. Profitability Index (PI)

2.Non-discounted Cash Flow Criteria

d. Payback Period (PB)

e. Discounted Payback Period (DPB)

f. Accounting Rate of Return (ARR)

2. Explain the ways of evaluating on International Investment Proposal Dec/Jan 2009

Facets of Project Analysis

The important facets of project analysis are:

1. Market Analysis

2. Technical Analysis

3. Financial Analysis

4. Economic Analysis

5. Ecological Analysis

3. How will you prepare a project budget? What are the various budgets? Dec/Jan

2010


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Budget Preparation

Consider very carefully what is required when putting together a budget request for a funding

application. There are two general areas in a budget:

1.

Direct costs which are directly attributable to a research project

2. Indirect costs which institutions incur in supporting research, but which cannot be

directly attributed to individual research projects.

If there is no set format for the application, consider grouping your costs under 3 headings:

1. Direct Labour costs

These are personnel costs (including relief from teaching) which include salary

on-costs (salary on-costs covers superannuation, payroll tax, workers

compensation, etc.)

2. Direct Operating costs (i.e. non-labour project costs), such as:

Travel

Consumables

Equipment hire (including Central Science Laboratory costings)

Other

3. Indirect costs

For Category 1Australian Competitive Grants (ACG) there are no charges for

Indirect costs. For grants that do not appear on the ACG Register, Indirect Costs

are applicable. Please refer to the Indirect Cost policy.

Please refer to the Australian Competitive Grant Register (ACGR) to confirm if

the Funding Body is exempt from Indirect Cost charges

4. Describe the properties of NPV. June/July 2012

A rule stating that an investment should be accepted if its net present value is greater than

zero and rejected otherwise. According to the theory of net present value (NPV),

participating in a positive NPV project will increase firm or shareholder wealth.


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5. What is DPR? June/July 2009

The discounted payback period is the amount of time that it takes to cover the cost of a

project, by adding positive discounted cash flow coming from the profits of the project.

Module-4

1. What is sensitivity analysis? Dec/Jan 2009

Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or

system (numerical or otherwise) can be apportioned to different sources of uncertainty in its

inputs. A related practice is uncertainty analysis, which has a greater focus on uncertainty

quantification and propagation of uncertainty. Ideally, uncertainty and sensitivity analysis shouldbe run in tandem.

Sensitivity analysis can be useful for a range of purposes, including:

Testing the robustness of the results of a model or system in the presence of uncertainty.

Increased understanding of the relationships between input and output variables in a

system or model.

Uncertainty reduction: identifying model inputs that cause significant uncertainty in the

output and should therefore be the focus of attention if the robustness is to be increased

(perhaps by further research).

sensitivity analysis is also called What if analysis, Only one variable is varied at

a time

2. Explain the elements of project risk management. June/July 2011

Conservative estimation of revenues.

Safety margin in cost figures.

Flexible Investment Yardsticks.

Acceptable overall certainty index.

Judgement on three point estimates.

3. Discuss the different ways of managing project related risks. July 2013

a.Fixed and variable cost

b.Financial leverage


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c. Pricing strategies

d.Sequential investment

e. Improving information

4.

What are the pros and cons of decision-tree analysis? June /July 2009

In decision analysis a decision tree and the closely related influence diagram is used as a visual

and analytical decision support tool, where the expected values (or expected utility) of competing

alternatives are calculated.

A decision tree consists of 3 types of nodes:

1. Decision nodes - commonly represented by squares

2. Chance nodes - represented by circles

3. End nodes - represented by triangles

Decision trees are commonly used in operations research, specifically in decision analysis, to

help identify a strategy most likely to reach a goal. If in practice decisions have to be taken

online with no recall under incomplete knowledge, a decision tree should be paralleled by

a probability model as a best choice model or online selection model algorithm. Another use of

decision trees is as a descriptive means for calculating conditional probabilities.

Decision trees, influence diagrams, utility functions, and other decision analysis tools and

methods are taught to undergraduate students in schools of business, health economics, and

public health, and are examples of operations research or management science methods.

5. Problem on RiskAnalysis & Selection of Projects.June /July 2009

Problems are solved in the classroom

6. Discuss the Five stages of project appraisal in UNIDO method. June/July 2009,

June/July 2012, 13

a. Calculation of the financial Profitability of the project

b. Obtaining the net benefit of the projectc. Adjustment for the impact of project on savings & investments

d. Adjustment for the impact of project on income distributions

e. Adjustment for the impact of project on merit and demerit goods.


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7. What is scenario analysis? June/July 2009

In sensitivity analysis, typically one variable is varied at a time. If variable are inter-

related as they are most likely to be, it is helpful to look at some plausible scenarios,

each scenario representing a consistent combination of variables

8. Explain steps in Decision tree analysis. June/July 2011

Steps in Decision Tree Analysis:

Identifying the problem and alternatives.

Delineating the decision tree.

Specifying probabilities and monetary outcomes.

Evaluating various decision alternatives

9. What is simulation analysis? June/July 2009

Simulation will be used for developing the probability profile of a criterion of merit by

randomly combining values of variables which have a bearing on the chosen criterion.

Module-5

1. What is social cost Benefit analysis? June/July 2011, June/July 2009

Costbenefit analysis (CBA), sometimes called benefitcost analysis (BCA), is a systematic

process for calculating and comparing benefits and costs of a project, decision or government

policy (hereafter, "project"). CBA has two purposes:

1. To determine if it is a sound investment/decision (justification/feasibility),

2. To provide a basis for comparing projects. It involves comparing the total expected cost

of each option against the total expected benefits, to see whether the benefits outweigh

the costs, and by how much

2. What are the principal discrepancy that needs to be considered while undertaking

social cost benefit analysis? June/July 2011

a. Market Imperfections.

b. Externalities.


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c. Taxes and subsidies.

d. Concern for savings.

e. Concern for Redistribution.

BA is related to, but distinct from cost-effectiveness analysis. In CBA, benefits and costs are

expressed in monetary terms, and are adjusted for the time value of money, so that all flows of

benefits and flows of project costs over time (which tend to occur at different points in time) are

expressed on a common basis in terms of their "net present value."

Closely related, but slightly different, formal techniques include cost-

effectiveness analysis, costutility analysis, economic impact analysis, fiscal impact analysis

and Social return on investment(SROI) analysis.

3. What is capital rationing? June/July 2009

Selecting the mix of acceptable projects that provides the highest overall net present value

(NPV) when a company has a limit on the budget for capital spending. The probability index

is used widely in ranking projects competing for limited funds

Module-6

1. What is a work schedule? June/July 2011

The time basis on which an employee is paid. A work schedule may be full-time, part-

time, or intermittent.

2. Define the term project monitoring and control .Dec/Jan 2010

Definition of Project Controls :

Project Controls can be defined as - Management action, either preplanned to achieve the

desired result or taken as a corrective measure prompted by the monitoring process.

Project controls is mainly concerned with the metrics of the project, such as quantities,

time, cost, and other resources; however, also project revenues and cash flow can be part


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of the project metrics under control. Thus, we believe an effective Project Controls

process can be applied in a co llaborat ion of its various sub -disciplines, such a s:

1) Planning, Scheduling & Project Reporting

Scope management;Project deliverables:

Work breakdown / Cost breakdown structures;

Schedule management;

Schedule forecasting;

Corrective action;

Progress measurement / reporting;

Productivity Analysis & Calculation;

2) Earned Value Analysis & Management

3) Cost Engineering & Estimating

Estimating;

Cost management;

Cost control;

Cost forecasting

4) Change Management & Controls

Change order control;

Trend Analysis;

5) Risk and Delay Claims

Risk Assessment & management;

Delay Claims Quantification

Forensic Schedule Analysis

3. What is environmental impact statement of the project? Explain the contents of

environmental statement. June/July 2009

An environmental impact assessment(EIA) is an assessment of the possible impacts that aproposed project may have on the environment, consisting of the environmental, social and

economic aspects.

The purpose of the assessment is to ensure that decision makers consider the environmental

impacts when deciding whether or not to proceed with a project. The International Association


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for Impact Assessment (IAIA) defines an environmental impact assessment as "the process of

identifying, predicting, evaluating and mitigating the biophysical, social, and other relevant

effects of development proposals prior to major decisions being taken and commitments

made." EIAs are unique in that they do not require adherence to a predetermined environmental

outcome, but rather they require decision makers to account for environmental values in theirdecisions and to justify those decisions in light of detailed environmental studies and public

comments on the potential environmental impacts.

4. What is meant by Environment Impact Assessment? What are the methodologies

for Impact Assessment? Explain. June/July 2011

impact assessment type a wide range of methodologies has been developed, according to the

precise purpose of the assessment, the types of question to be asked, the organisational context,

the socio-economic context, available budget, research capacity and other factors. An impactassessment may include any or all of:

Quantitative statistical methods involving baseline studies, the precise identification of

baseline conditions, definition of objectives, target setting, rigorous performance

evaluation and outcome measurement. Such methods can be costly, limited in the types

of impacts which can be accurately measured, and may pose difficulties for inference of

cause and effect. Some degree of quantification may be necessary in all impact

assessments, in order to evaluate the success of the intervention and the magnitude of any

adverse effects.

Qualitative methods suitable for investigating more complex and/or sensitive types of

social impacts, e.g. intra-household processes, policy issues and investigation of reasons

for statistical relationships and policy implications. These methods generally require high

levels of skill, and may be relatively costly. Some degree of qualitative interpretation

may be necessary in all impact assessments, in order to evaluate the causes of impacts

which have been observed.

Participatory approaches suitable for initial definition or refinement of the actual or

potential impacts which are of concern to stakeholders, questions to be asked, and

appropriate frameworks and indicators to be used. Such approaches can contribute to all

types of assessment, and are particularly suited to exploratory low budget assessments

and initial investigation of possible reasons for observed statistical relationships. Theyoffer a means of involving stakeholders in the research, learning and decision-making

processes. These methodologies also require a certain level of skill, depending on the

issues to be addressed and ways in which they are integrated with other methods. Some

degree of stakeholder participation is likely to be necessary in all impact assessments, in

order to achieve a good understanding of stakeholder perceptions of impacts.


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Module-7

1. What are the various sources of finance available for the projects in India? Dec/Jan

2009/ Describe briefly the various means of financing of project. June/July 2009

The capital markets:

i) new share issues, for example, by companies acquiring a stock market listing for the first

time

ii) rights issues

Loan stock

Retained earnings Bank borrowing Government sources

Business expansion scheme funds Venture capital

Franchising.

2. What is the procedure associated with availing term loan? Explain.June 2011/

Discuss the procedure associated with term loan.July 2012

a. Idea Generation and Financial Projections: Conceiving the project and preparation of the

projections regarding the project.

b. Submission of Loan Application: Submission of loan application along with projectreport giving comprehensive information about the project.

c. Initial Processing (Flash Report): Initial processing of loan application and preparation of

Flash Report.

d. Detailed Appraisal: Appraisal of the proposed project report covers marketing,

technical, financial, managerial and economic aspects which is prepared after site

inspection.

e. Issue of (In Principle) Letter of Sanction: Issue of letter of sanction i.e. financial letter

of sanction.

f. Acceptance of Terms and Conditions: Acceptance of the terms and conditions and

compliance of terms of sanction by the borrowing unit at its board meeting and passing ofresolution and conveying its acceptance within a stipulated period.

g. Execution of Loan Agreement: Execution of loan agreement and payment of registration

charges. The draft loan agreement sent for execution by authorized persons and to be

properly stamped as per the Indian Stamp Act, 1899 and then the financial institution also

sign it.


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h. Disbursement of Funds: Disbursement of loans time to time as per the progress of the

projects and the financial status of the project.

i. Creation and Registration of Security: Creation of security through the first mortgage of

immovable properties and hypothecation of movable properties. Creation of mortgage

within one year from the date of first disbursement failing which 1% additional interest tobe paid. This time limit is given for acquiring the assets which might

be indigenous purchased or assembled or imported as the case may be.

j. Monitoring/Post Disbursement Check: Monitoring done at the implementation stage as

well as at the operational stage. Also monitoring recovery of dues of interest and

principal repayment.

3. Describe the key steps in public investment decision making process in India. July

2013

Define the problem

Develop the alternatives

Evaluate the alternatives

Make the decision

Implement the decision

Monitor the solution

4. Describe the features of term Loan. July 2012

Term Loan is a liability accepted by the company for purchasing the fixed assets. These

are repayable over a period of 310years. These can be given by Banks or other

financial institution.Following are the features of term loans:

1) Banks or Financial institutions granting term loans are creditors and not the owners of

the company. They only lend the funds to the company.

2) They are required to be repaid during the life time of the company at a predefined

interval.

3) The term loans are either secured or unsecured.

4) Return on term loans is paid in the form of interest. This interest is still paid even if

there is non-availability of profits.

5) This source of raising funds is very risky from companys point of view.

6) Term Loans are less risky on the part of banks and financial institution.

7) They are cheap source of funds from companys point of view.


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Module-8

1. Explain the term project inventory. June/July 2011

The Inventory of Major Projects (IMAP) is produced by Alberta Enterprise and

Advanced Education to assist firms in identifying potential supply opportunities, as well

as informing Albertans on the status of projects in the province valued at $5 million or

greater.

2. Illustrate the problem of project scheduling in view of various resources constraints

with the help of an example. June/July 2011

In project management, a schedule consists of a list of a project's terminal elements with

intended start and finish dates. Terminal elements are the lowest element in a schedule,

which is not further subdivided. Those items are often estimated in terms of resource

requirements, budget and duration, linked by dependencies and scheduled events. Project

schedule can be created; the schedule maker should have a work breakdown

structure (WBS), an effort estimate for each task, and a resource list with availability for

each resource. If these components for the schedule are not available, they can be created

with a consensus-driven estimation method like Wideband Delphi. The reason for this is

that a schedule itself is an estimate: each date in the schedule is estimated, and if those

dates do not have the buy-in of the people who are going to do the work, the schedule

will be inaccurate.

In many industries, such as engineering and construction, the development and

maintenance of the project schedule is the responsibility of a full time scheduler or team

of schedulers, depending on the size of the project. Though the techniques of scheduling

are well developed, they are inconsistently applied throughout industry. Standardization

and promotion of scheduling best practices are being pursued by the Association for the

Advancement of Cost Engineering (AACE), the Project Management Institute (PMI).


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3. State the essential elements/steps involved in the project planning process. Dec/Jan 2010

4. Illustrate in detail the skills and competencies required by a project manager

June/July 2011

The skills that a good project manager possesses are many and varied,

covering the entire spectrum of the human personality. We can divide

these skills into a number of specific categories, namely: Personal Skills, Technical

Skills, Management Skills

5. What are EOT & LOT in Network Techniques? Dec/Jan 2010

Network Techniques

PERT

(Program Evaluation Review Technique)

Designed to handle risk and Uncertainty

Probabilistic

CPM

(Critical Path Method)

Concerned with trade-off between cost and time

Deterministic


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6. What is a GANTT chart in project management? Dec/Jan 2009

A Gantt chart is a type of bar chart, developed by Henry Gantt, that illustrates a project

schedule. Gantt charts illustrate the start and finish dates of the terminal elements and

summary elements of a project. Terminal elements and summary elements comprise

the work breakdown structure of the project. Some Gantt charts also show

the dependency (i.e., precedence network) relationships between activities. Gantt charts

can be used to show current schedule status using percent-complete shadings and a

vertical "TODAY" line as shown here.

7. What is a work schedule and what is its purpose? Dec/Jan 2009

Work schedules are up to an employer to set and enforce, i.e., scheduling of employees

is entirely within the employer's control, and it is up to the employees to comply with

the schedule that is given to them.

With only extremely narrow exceptions relating to certain regulated industries or

collective bargaining agreements, adults, as well as youths ages 16 or 17, may work,

and/or may be required to work, unlimited hours each day (the only limits are employee

morale, practical realities, and common sense in general).

project, Appraisal, Planning & Control

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