INSTITUTE OF ENGINEERING & MANAGEMENT
(AUTONOMOUS INSTITUTION)
PROJECT MANAGEMENT (MB301)
STUDY MATERIAL
Subject –Project Management
Paper Code – MB301
Course Objective:
Project management theory, terms and concepts are introduced in this course. Students will
understand the project life cycle and learn how to build a successful project from pre-
implementation to completion. It will introduce project management topics such as resources,
costs, time constraints and project tools and techniques.
Course outcome
CO1 -Understand the concept of project life cycle, various project issues and problems
CO2 - Exhibit skills in using various project management techniques
CO3 - Developing the knowledge of project feasibility and project appraisal
CO4 - Understand Capital Budgeting Process, Social Cost Benefit analysis
Sl Question Blooms
No. Level and
Marks
1 You manage a hotel resort on the South Beach of Goa. You are shifting the focus of your resort BL5
from a traditional fun-in-the-sun destination to eco-tourism. How would you classify the (Marks
following projects in terms of compliance, strategic, and operational? 10)
a. Convert pool heating system from electrical to solar power
b. Renovate the cafeteria
c. Update all the bathrooms with modern facilities that are 10 years old or older
d. Change the hotel brochures to reflect eco-tourism image.
e. Introduce wireless internet service in café and lounge areas.
f. Test and revise fire extinguishing plan.
Hint: In depth knowledge of Project is required to identify its nature
2 Project Life Cycle divides the project into phases that provide better management control and BL 5
the appropriate links to the (Marks 5)
ongoing operations of the organization and defines the beginning and end of the project—
Draw a chart of Project Life Cycle
and explain briefly
Hint: different phases of project to be discussed
3 In the executing phase of your project, you lose some key resources. Some new people have BL5
joined, (Marks
and you (the project manager) set up a meeting to get the team together. What should be the 10)
most
important agenda item for this meeting? - Justify
a. Discussing team building activities
b. Inviting the team members to share their past project experiences
c. Reviewing WBS and responsibilities of all team members
d. Planning risk responses for existing risks
4 BL4
From conception to completion – the project development cycle consists of certain activities (Marks
- Discuss 10)
Hint: Understanding of project life cycle
5 Draw work breakdown structure of a car servicing company BL4
(Marks
10)
6 Arrange the following activities into the WBS to show how the work items decompose into BL 4
activities. (Marks
10)
Shop for shoes
Create guest list
Have the tailoring and fitting done
Shop for dress
Find caterer
Cater the wedding
Wait for RSVPs
Mail the invitations
Finalize the menu
Print the invitations
Choose the bouquet
7 Draw a WBS of Industrial tour of the students of MBA in Tata Steel company, Jamshedpur BL 4
(Marks
10)
8 Draw a Milestone chart of construction project BL 4
(Marks 5)
9 Examine different types of stakeholders in a project BL 5
(Marks 5)
10 Analyse the importance of project management software BL 5
(Marks 5)
11 Tata group is a multinational group based in Mumbai, Maharastra, India. The idea of Tata BL5
Nano came to Mr. Ratan Tata. He was travelling on a rainy day when he saw a man carrying (Marks
his whole family (4 people) on a bike. Mr. Ratan Tata saw that the man was facing a lot of 10)
problem while driving his bike as it was raining and the bike was overloaded.
This event struck an idea to Mr. Ratan Tata about building a car that was big enough for a
small family and affordable by people who ride bikes. Mr Ratan Tata raised hope for a lot of
Middle class families by giving them the status of owning a car. Expectations were increasing
amongst the customers regarding the product features and its efficiency. Competitors were
eagerly waiting for its arrival to find “what’s inside NANO?” The only factor the customer
knew in advance was its price tag of 1 lac as conveyed by Ratan Tata.
For most, the Nano would have been their very first Tata car, while for others it was a dream
come true. A number of things contributed to the Tata Nano’s failure in Singur, West Bengal.
a. In which phase Tata Nano project shifted from Singur, West Bengal?
b. Why Tata Nano was a failure?
c. What are the causes of project failure?
Hint: Concept of different phases of project and causes of failure are important
12 Evaluate environmental aspects of project appraisal BL4
(Marks 5)
13 You and your sponsor are discussing the financial benefits of selecting between two BL 5
similar projects - project A and project B. When evaluating the projects, you realize (Marks
that project A will cause some amount of short-term environmental damage but minimal long- 10)
term
environmental problems. In this context, what will be the best course of action and why?
a. Explain to your senior management about the potential environmental damage caused
by
project A and persuade them to discard the project.
b. Select the project A as there is only low probability of causing long-term environmental
damage.
c. Try to find solutions to the environmental damage that may occur in the future because of
project A.
d. Undertake the project A but try to minimize the environmental damage, if any
14 The Department of Management is planning to organize management fest in the month of BL6
October, 2022. Create a Gantt Chart for the same (Marks
10)
15 Create a Work Breakdown Structure (WBS) for the patient handling and treatment process in BL 6
the emergency department of a hospital. (Marks
10)
16 The Department of Management is planning to organize a Study Abroad Program (SAP) in BL 6
Singapore in the month of December, 2022. Create a Gantt chart for the same with (Marks
appropriate note. 10)
17 BL 5
A Company is looking for setting up a beverage plant in Kalyani. Create a marketing (Marks
appraisal report of that upcoming project 10)
18 Prepare a chart showing technical aspects and financial aspects of a project feasibility study BL 5
report (Marks
10)
19 A project involves an initial outlay of Rs 30,00,000 and with the following table for the project BL 5
For the next five years. The salvage value at the end of the life of the project after five years (Marks
is Rs. 3,00,000. Check whether the project is financially feasible by assuming an interest rate 10)
of 15% compounded annually
End of the Maint.& Revenue (Rs.)
year Operating
Expenses
(Rs.)
1 2,00,000 8,00,000
2 2,50,000 10,00,000
3 3,00,000 12,00,000
4 3,50,000 14,00,000
5 4,00,000 16,00,000
Hint: use of capital budgeting technique to take decision
20 Alpha & Co. wants to replace its old machine with a new automatic machine. Two models Zee BL 5
and Chee are available at the same cost of Rs. 5,00,000 each. Salvage value of the old machine (Marks
is Rs. 1,00,000. The utilities of the existing machine can be used if the company selects Zee. 10)
Additional cost of utilities to be purchased in that case are Rs. 1,00,000. If the company
purchases Chee then all the existing utilities will have to be replaced with the new utilities
costing RS. 2,00,000. The salvage value of the old utilities will be Rs. 20,000.
The cash flows are expected to be
Year Zee Chee DCF
at
15%
1 1,00,000 2,00,000 .870
2 1,50,000 2,10,000 .756
3 1,80,000 1,80,000 .658
4 2,00,000 1,70,000 .572
5 1,70,000 1,40,000 .497
The return on capital is 15%
Apply any method where you can decide which machine is better for replacement.
Hint: use of capital budgeting technique to take decision
21 A construction company is preparing a PERT network for laying the foundation of a new art BL 4
museum. Given the following set of activities, their predecessor requirements and three (Marks
estimates of completion time: 10)
Time estimates (days)
Activity Predecessor
Optimistic Pessimistic Most likely
A None 2 4 3
B None 8 8 8
C A 7 11 9
D B 6 6 6
E C 9 11 10
F C 10 18 14
G C,D 11 11 11
H F,G 6 14 10
I E 4 6 5
J I 3 5 4
K H 1 1 1
Draw the PERT network
Compute the slack for each activity and determine the critical path
The Contract specifies a Rs 5000 per day penalty for each day the completion of the project
extends beyond 37 days. What is the probability that this company will have to pay a maximum
penalty of Rs 15000?
Hint:
Activity : A B C D E F G H I J K
1
a : 2 8 7 6 9 10 1 6 4 3 1
1
m : 3 8 9 6 10 14 1 10 5 4 1
1
b : 4 8 11 6 11 18 1 14 6 5 1
1
te=1/6(a+4m+b) : 3 8 9 6 10 14 1 10 5 4 1
e^2=[1/6(b- 1/ 2/ 1/ 4/3 4/ 1/ 1/
a)]^2 : 3 0 3 0 3 0 3 3 3 0
22 The following table gives the activities in a small project and other relevant information: BL 5
Resource required (Marks
Activit Immediate Operator Mechanic 10)
Duration (Days)
y Predecessor s s
A 3 None 2
B 2 A 2 2
C 4 A 4 4
D 5 A 5 5
E 3 B 2 2
F 2 E 2
G 6 C 2
H 4 D 2 2
I 4 G 4 2
J 2 D 2
K 2 J 2 2
L 4 F,H,I 4 4
I. Draw the network, compute Earliest Start Time (EST), Latest Finish Time (LFT) for
each of the activities and find out the project completion time and identify the critical
path.
II. Draw the Time Scaled Diagram along with resource accumulation table. Comment on
demand for the operators and mechanics for the entire project duration and suggest the
method for smoothening the resources.
23 List of activities for erecting a canteen in a factory is given below with other relevant details. BL 4
Job A must proceed with all others while Job E must follow all others: apart from this, jobs (Marks
can run concurrently. 10)
Job Normal Crash
Code Description Duration Duration
(Days) Cost (Rs) (Days) Cost (Rs)
Lay
foundation
& build
A walls 5 30,000 4 40,000
Tile
B roofing 6 12,000 2 20,000
Install
C electricity 4 10,000 3 18,000
Install
D plumbing 5 12,000 3 20,000
Connect
services to
E finish 3 16,000 3 16,000
I. Draw the network and identify the critical path.
II. Crash the network fully to find out the minimum duration.
III. If indirect costs are Rs 3000/day, determine the time-cost trade-off for the project.
24 A social worker is planning a questionnaire survey on ‘CIGARETTE SMOKING’. The BL 4
following tasks need to be carried out: (Marks
Duration (in days) 10)
Activity task Predecessor Most likely Optimistic Pessimistic
A. Design Questionnaire None 5 4 6
B. Sample design None 12 8 16
C. Testing of
Questionnaire A 5 4 12
D. Recruit Interviewers B 3 1 5
E. Train Interviewers D,A 2 2 2
F. Allocation of Area to
Interviewers B 5 4 6
G. Conducting Interviews C,E,F 14 10 18
H. Evaluate Results G 20 18 34
Find the expected task durations and variations of task duration using PERT
Draw the activity arrow network and identify the critical path. Find the expected duration of
the project and its variance.
25 The following table gives the activities in a construction project and other relevant BL 4
information: (Marks
10)
Activity 1-2 1-3 2-3 2-4 3-4 4-5
Duration 20 25 10 12 6 10
Draw the network for the project
Find critical path
Find free, total and independent floats for each activity
26 ABC Chemical Ltd. is deciding which investment alternative is feasible considering costs BL 4
and benefits of each of them. (Marks 5)
Alternative 1
Total Costs of Alternative 1 = $ 88.000.000.
Expected Benefits s of Alternative 1 = $ 108.000.000
Alternative 2
Total Costs of Alternative 2 = $ 11.000.000.
Expected Benefits s of Alternative 2 = $ 23.000.000
Opine which alternative ABC Chemical Ltd. should choose?
Hint: Calculate benefit cost ratios of each alternatives to check about positive results and
higher ratio.