Study sets, textbooks, questions
Upgrade to remove ads
MGMT430- EXAM #3
Terms in this set (67)
process of evaluating proposed projects or groups of projects and then choosing to implement them so that the objectives of the parent company will be achieved.
project selection model criteria
realism, capability, flexibility, ease of use, cost, easy computerization
the model should reflect the reality of a company's decision situation, especially the multiple objectives of both the firm and its managers (account for limitations)
the model should be sophisticated enough to deal with the relevant factors (internal & external situations that affect projects--strikes & rates; multiple time periods)
the model should give valid results within a range of conditions that the firm may experience. It should be easy to modify in response to changes in the firm's environment.
ease of use
the model should be reasonable convenient, not taking a long time to execute and be easy to use/understand (data access and no specialized analysis/ equipment)
the data-gathering and modeling costs should be low relative to the cost of the project and less than the potential benefits of the project (all expenses should be considered)
it should also be easy and convenient to gather and store the information in a database, as well as to manipulate data in the model through standard software.
2 types of project selection models
numeric and nonnumeric
-qualitative in nature and binary
- 6 types of models (sacred cow, operating necessity, competitive necessity, product line extension, sustainability, comparative benefit)
the sacred cow
- a project that is undeservedly safe from elimination/criticism, often because it is the pet project of a senior executive (pedestal)
- tend to drain resources without necessarily producing great benefit/organizational value
-doesn't prevail in companies with mature PM
- a project that is required in order to protect property or to keep the company in operation.
- doesn't require much formal evaluation
- to continue, it needs to be done
- tornado ex
- a project that is required in order for an organization to remain competitive in their industry or one that allows the organization to focus on their core competencies.
- may bypass more careful numeric analysis used for projects that are deemed to be less urgent/less important to the company's survival
product line extension
- a project that is to develop and distribute new products or expand a current product line. Evaluated on how well the product fits with existing line, fills a gap, strengthens a weak link, or extends line in a new, desirable direction
- projects might be considered a project category or classification
- accomplished using existing resources
- common and compete for similar resources
- helps proposed projects to be selected for funding
- covers the triple bottom line
- focus on long-run performance rather than short-run gain
- commonly used for project selection decisions. This approach entails subjectively ranking projects based on perceived benefits
- Q-sort technique
- 3 types of models (real options, window of opportunity, discovery-driven planning)
- 2 categories (2 types of models- profitability; npv & payback period, scoring; unweighted factor & weighted factor)
-can use continuous/ discrete values as input
- investment leads to opportunities that would not otherwise be available
- imperative to consider and never assume that things will continue as they have in the past if you don't make the investment
window of opportunity
- attempts to determine the cost, time, & performance specifications that must be met before any project if undertaken
- approach funds enough of the project to determine if the initial assumptions concerning the costs/benfits, etc. were accurate.
-when funds are used up, assumptions are reevaluated to determine what's next (stop or decision)
-learn about the project; assumptions documented/evaluated
project portfolio process (PPP)
- 8 steps
-procedure for selecting, implementing, & reviewing projects that will help an organization achieve its strategic goals
- Collect project performance data with respect to a plan, produce performance measures, and report and disseminate performance information.
- making sure we are staying on track with the project
- Comparing actual performance with planned performance, analyzing variances, assessing trends to effect process improvements, evaluating possible alternatives, and recommending appropriate corrective action as needed.
- making changes if were not on track
A direct connection between planning and control. If it does not collect and report essential information, control can be faulty or missing
Facilities, processes, and procedures used to generate or consolidate reports from one or more information management systems and facilitate report distribution to the project stakeholders.
routine, exception, special analysis
reports issued on a regular basis. distribution can be periodic, at milestones or critical events, occasionally on a weekly/daily basis
reports distributed to the team members who are responsible for PM decision-making and distributed to inform other mangers of the decision
Reports used to disseminate the results of special problems that arise during a project. Generally cover matters that are of interest to other PM (analytic methods)
-Mutual understanding of the project goals as well as early warning signals of potential problems and delays.
-Awareness of the progress of parallel activities and of the problems associated with coordination among activities.
-Understanding the relationships of individual tasks to one another and to the overall project.
-Minimizing confusion associated with change by reducing delays in communicating the change.
-Keeping the client and senior management up-to-date on project status, costs, milestones, deliverables, and needs.
- too much detail, both in reports and input is being solicited from workers
- poor interface between the project information system and the parent firm's information system/ the interface should be designed to ensure that the data are not lost/distorted.
- poor correspondence between the planning and monitoring systems. this often happens when the existing information system is used for monitoring without modifications for PM
earned value management
A methodology that combines scope, schedule, and resource measurements to assess project performance and progress.
planned value (PV)
planned % complete x budget
earned value (EV)
actual % complete x budget
schedule variance (SV)
EV - PV
Negative is behind schedule;
positive is ahead of schedule;
0 on schedule
cost variance (CV)
EV - AC
Negative is over budget;
positive is under budget;
0 on budget
schedule performance index (SPI)
>1= more work was completed than planned (ahead)
<1= less work completed than planned (behind)
=1= all work completed
cost performance index (CPI)
>1= earning more than spending (under)
<1= earning less than spending (over)
=1= earning and spending are equal
assuring that reality meet expectations or plans. usually involves the process of keeping actions within limits so to assure certain outcomes will happen
project change basic causes
uncertainty about the technology on which the network of the project or its output is based, an increase in the knowledge base/sophistication of the client/user leading to scope change, modification of rules applying to the process of carrying out the project/to its output
the comparison of actual or planned practices, processes and operations, to those of comparable firms to identify best practices, generate ideas for improvement, and provide a basis for measuring performance
A graphic display of process data over time and against established control limits, which has a centerline that assists in detecting a trend of plotted values toward either control limit.
4 independent dimensions of project success
efficiency, customer impact/satisfaction, business/direct success, future potential
meeting the time, cost, and scope objectives
Meeting the technical and operational specifications as well as loyalty/repurchase
related to commercial success and market share or internal operational performance
Future opportunities and real options
purposes of evaluation
decide whether project is successful, help translate achievement of project's goals
a thorough examination of the management of a project, the methodology and procedures, records, properties, budgets/expenditures, and the degree of completion
normally most constrained by resources and time and is usually a brief review of a project
a typical detailed audit is conducted when a follow-up to the general audit is required. occurs due to unacceptable level of risk or performance in project areas.
typically performed by a qualified technician under the direct guidance of a project auditor. although not always the case, it is often the most detailed.
often a legal necessity because the client specified in the contract. needed to account for all project property and expenditures.
contains description of the project in order to provide a framework of understanding for the reader
should include measures:cost, schedule, scope, quality
auditor's conclusions regarding progress together with recommendations for changes in technical approach, schedule, and budget that should be made in the remaining project tasks
critical management isseues
issues that require close monitoring by senior management should be included, along with a brief explanation between issues and objectives of the project
contains review of the major risks associated with the project and their projected impact on project time/cost/scope
limitations and assumptions
may be placed at the end of the report or may be included as part of the introduction
project termination varieties
termination by addition, termination by integration, termination by extinction, termination by starvation
termination by addition
This approach concludes a project by institutionalizing it as a formal part of the parent organization (project team created for purpose of monitoring ATM transactions)
termination by integration
Most common and complex way to terminate successful projects - output of the project becomes a standard part of the operating systems of the parent firm or the client. (ATM machines)
termination by extinction
stopped because project is unsuccessful or has been superseded (all activity ceases) (ATM card only used for cash- replaced by debit cards)
termination by starvation
slow starvation by budget decrement- budget cuts during recessions are common (ATM cards)
2 parts to project termination process
decision process and implementation process
Sets with similar terms
OPMA 407 Final
Ch 7, 8 16 HRIS
MKT 363 Exam 3 Part 2
Other sets by this creator
Service Mgmt exam 3
MGMT456 EXAM 2
MGMT 430- EXAM 2
MGMT 456 exam 1
Other Quizlet sets
BLAW EXAM 1 Chp4
CHAPTER 7 - REAL PROPERTY OWNERSHIP AND INTERESTS
Reliigion Test Chapter 2
History Module 2: Lesson 4 - Colonial dissatisfact…