Scribd
Upload
17 views2 pages

MGMT Assignment 7

This document contains an assignment with questions about project management topics like estimating, costs, and decision making. It discusses how accurate estimates are critical for project success by supporting decisions, scheduling, and monitoring progress. Organizational culture can influence estimate quality if a company encourages or discourages padding estimates. Bottom-up estimating uses a work breakdown structure while top-down is for rough estimates. Controllable project costs include direct labor and materials while overhead costs are not under a project manager's control. Mega projects are difficult to estimate due to their complexity, long timelines, and potential for overpromising. A "white elephant" project goes over budget with costs exceeding benefits. The assignment also involves a hypothetical post-graduation trip decision

Uploaded by

kireeti415
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
17 views2 pages

MGMT Assignment 7

This document contains an assignment with questions about project management topics like estimating, costs, and decision making. It discusses how accurate estimates are critical for project success by supporting decisions, scheduling, and monitoring progress. Organizational culture can influence estimate quality if a company encourages or discourages padding estimates. Bottom-up estimating uses a work breakdown structure while top-down is for rough estimates. Controllable project costs include direct labor and materials while overhead costs are not under a project manager's control. Mega projects are difficult to estimate due to their complexity, long timelines, and potential for overpromising. A "white elephant" project goes over budget with costs exceeding benefits. The assignment also involves a hypothetical post-graduation trip decision

Uploaded by

kireeti415
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

MGMT 3530 – Project Management 2/13/18

Session 9: Assignment #7
Chapter 5 Review Questions (p.152)
1. Why are accurate estimates critical to effective project management?
Accurate estimates are important to project management because they are needed to:
- Support good decisions
- Schedule work
- Determine how long the project will take to complete and how much it will cost
- Determine whether the project is actually worth doing at all
- Develop accurate cash flow needs
- Determine how well the project is progressing
Finally, accurate estimates are critical to the success of the project because reliable and accurate
estimates are the basis for timely monitoring – which will ensure that mangers are checking
project progress constantly and taking corrective action before the project fails entirely.
2. How does the culture of an organization influence the quality of estimates?
Organizational culture is important in this case because what is acceptable and expected in
certain companies may not be the same in others. For example, some companies might outwardly
or privately encourage padding estimates while others might strongly discourage that kind of
gamesmanship. In general, most organizations believe that generating detailed estimates takes
too much time and is not worth the effort, or that it is impossible to accurately predict the future
– putting little to no importance on good quality estimates. On the other hand, some (rare)
companies put the highest importance on these estimates, making organizational culture highly
influential in project estimates.
3. What are the differences between bottom-up and top-down estimating approaches?
Under what conditions would you prefer one over the other?
Bottom-up Top-down
Usually tied directly to the WBS and work Typically used in the project initiation stage
package
Cost and time important Good for rough estimates
Created by someone familiar with the tasks Can help prioritize and select projects
Bottom up method is best for when you want to give the customer with more of an opportunity to
compare the method approaches before selecting them.
4. What are the major types of costs? Which costs are controllable by the project
manager?
The major types of costs are:
- Direct Costs such as labor, materials, equipment, which are clearly chargeable to a
specific work package. These can be influenced by the project manager and the project
team.
- Direct Project Overhead Costs which closely pinpoint which resources of the
organization are being used in the project. These costs can be tied to project deliverables
or work packages and are not necessarily influenced by the project manager because they
are real and must be covered in the long run if the firm and project are to remain viable.
- General & Administrative Overhead Costs, which are organization’s costs that are not
directly linked to a specific project. They are carried during the duration of the project
and can include advertising, accounting, senior management and other general costs.
These costs are not influenced by the project manager, instead they are allocated
depending on a predetermined overhead cost rate to a specific project.

This study source was downloaded by 100000831236167 from CourseHero.com on 09-24-2022 08:55:41 GMT -05:00

https://www.coursehero.com/file/41202840/MGMT-Assignment-7docx/
MGMT 3530 – Project Management 2/13/18

5. Why is it difficult to estimate mega project costs and benefits?


It is difficult to estimate costs and benefits of mega projects for many of reasons, one of them
being the sheer magnitude of these types of projects – they have an unusually long time horizon
and a level of complexity that makes it hard to accurately estimate costs and benefits (we don’t
know what will happen in 5 years’ time!). There is also the role of promoters, who can
sometimes overpromise and end up being overzealous, optimistic and ignorant about the reality
of the project.
6. Define what a “white elephant” is in project management. Provide a real-life
example.
A white elephant is a mega project that is over budget, undervalued and costs more to maintain
than it delivers benefits overall. These types of projects are a valuable burden that cannot be
easily disposed of, especially because their costs far outweigh their benefits. A possible real life
example as mentioned in the book are the FIFA World Cups – which usually burden the host
country with new infrastructure built specifically for the event that are not usually put to good
use after, creating a burden for the country that cannot be easily gotten rid of.
Case 5.2: Post Graduation Adventure
1. Assume you are either Mike or Josh; how would you go about making a decision
using project management methodology?
First, I would make a detailed budget with breakdowns on what I would most be comfortable
spending on, with upper and lower limits for each category. For example: Max 400 on hotel and
lodging, min 300. Second, I would create a list of deadlines by which to have decisions made, so
that I have enough time to plan the rest of the trip to the chosen destination, regardless of where
it is. I would also create a communications plan that would allow me and Mike to constantly
share any sort of information regarding the destinations, estimated costs and other factors that
could influence the decision. Finally, once the decision is made, I would create a responsibility
matrix and assign specific tasks to each of us so that all necessary bases are covered.
2. Looking first at only cost, what decision would you make?
Assuming that the flight costs to Vietnam is higher but keeping in mind that overall costs of
staying there are lower, I would choose Vietnam over the other destinations – primarily because
it is an exotic destination that neither of the travelers have been to, would allow to remain within
budget.
3. After cost, what other factors should be considered before making a decision?
I would definitely consider safety, weather, amount of things to do, friendliness towards tourists
and outsiders, ease of getting there (if Visas or other paperwork is required), and overall fun
potential of the destination.

This study source was downloaded by 100000831236167 from CourseHero.com on 09-24-2022 08:55:41 GMT -05:00

https://www.coursehero.com/file/41202840/MGMT-Assignment-7docx/
Powered by TCPDF (www.tcpdf.org)

You might also like