PROJECT MANAGEMENT

Practice Problem

Mrityunjay Pandey
 INDEX
Module-1 Overview of Project Management
1.1 Concepts and attributes of Project, Project lifecycle and stake holders
1.2 Project Organization, WBS, Scope and priorities, Project Identification,
1.3 Market feasibility with Moving Average
1.4 Exponential smoothing methods
1.5 Techno-economic feasibility
1.6 Government policy to location, legal aspects
1.7 Preparation of DPR
Module-2 Project Planning:
2.1 Time and cost estimates with AON and AOA conventions,
2.2 Budget estimates
2.3 Network analysis
2.4 Float analysis
2.5 Crashing concepts
Module-3 Project scheduling and Risk Management:
3.1 Gantt chart
3.2 Splitting and multitasking
3.4 Risks in time estimates
Module-4 Project Organization:
4.1 Role and responsibilities of Project Manager
4.2 Team development model
4.3 sources of conflicts
4.4 conflict resolution
Module-5 Earned value analysis:
5.1 ‘S’ curve,
5.2 Cost and schedule performance indices using network
5.3 Revised estimates of cost and time
Module-6 Financial analysis:
6.1 Profitability analysis
6.2 Using NPV, IRR, Payback and discounted Payback period, PI.
6.3 Preparation of projected statements of Income-expenditure
6.4 Balance-sheet
Module-7 Computer applications and Software’s for Project Management
Module-8 Project Management Cases

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 PROJECT MANAGEMENT

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 MODULE-1_ OVERVIEW OF PROJECT MANAGEMENT
Problem based on Moving Average Method:
Forecasted value using r-year:
𝑨𝟏 +𝑨𝟐 +𝑨𝟑 +⋯+𝑨𝒓
𝑭𝒓+𝟏 =
𝒓

List formulae of Errors:

∑|𝑬|
MAD (Mean absolute error) = 𝒏

∑|𝑬|
MSE (mean square error) = 𝒏

∑𝑨𝑷𝑬
MAPE (Mean absolute percentage error) = 𝒏

Question-1. The demand of a product for past 12 months was observd as follows.
Months 1 2 3 4 5 6 7 8 9 10 11 12
Demand 280 288 266 295 302 310 303 328 309 315 320 332
Using 3 years moving average method, find out forcasted demand for 13 th month.Also find
MAD, MSE & MAPE
Question-2. The past demand for 6 months is given of a product
Month 1 2 3 4 5 6
Demand 32 29 27 36 34 32
Calculate MAD, MSE & MAPE and sales for month 7 using moving average method with
period 3.
Problem Based on Exponential Smoothing Method:
Now calculate forecasted value by using 𝑭𝒕+𝟏 = 𝑭𝒕 + 𝜶(𝑨𝒕 − 𝑭𝒕 )
Question-1. Following table shows the actual demand of refrigerators of over a period of past
7 weeks:
Week 1 2 3 4 5 6 7
Demand 39 44 40 45 38 43 39
Using exponential smoothing method 𝜶 = 𝟎. 𝟐 , determine forecasted demand for 8th week.
( )
Also find MAD, MSE & MAPE. Assume 𝑭𝒕 = 𝑨𝒕 for first week
Question-2. Following table shows the actual demand of refrigerators of over a period of past
6 months:
Month 1 2 3 4 5 6
Demand 32 29 27 36 34 32
Using exponential smoothing method (𝜶 = 𝟎. 𝟐), determine forecasted demand for 8th week.
Also find MAD, MSE & MAPE. Assume 𝐹𝑡 = 𝐴𝑡 for first week
Question-3. The weekly demand for units manufactured by the Acme water Purify Company
has been as follows:

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 Week 1 2 3 4 5 6 7 8
Units 100 80 110 115 105 110 125 120
Use the exponential smoothing method to forecast the number of units from 2nd week to 9th
week. The initial forecast for 1st week was 15 units and 𝛼 = 0.2
Question-4. The demand for an item is observed for 15 months and is recorded as shown
Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Demand 280 288 266 295 302 310 303 328 309 315 320 332 310 308 320
(a). Calculate 4-month simple moving average as forecasts along with MSE, MAD and
MAPE
(b). Calculate exponential smoothed as forecasts for 𝛼 = 0.3 . The initial forecasts for first
month is 285.Also find MSE, MAD and MAPE.
(b). Calculate exponential smoothed as forecasts for 𝛼 = 0.3 . The initial forecasts for first
month is 285.Also find MSE, MAD and MAPE.
Question-5. The past demand for 6 months is given of a product
Month 1 2 3 4 5 6
Demand 132 129 127 136 134 132

(a) Calculate Mean Squared Error and forecast for month 7 using Moving Average method
with period 3.
(b) Calculate estimated sales for month 7 using exponential smoothing method with
smoothing constant 0.1. Assume forecast for month2 as initial value of 132.
(c) Explain Mean Absolute Percentage Error as a measure of accuracy in forecasting

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 MODULE-2_ PROJECT PLANNING
2.1. Time and cost estimates with AON and AOA conventions,
2.2. Budget estimates
2.3. Network analysis
2.4. Float analysis
2.5. Crashing concepts
List of formulae:
EST [Earliest start time] =E at Tail of an activity
LST [Latest start time] = LFT-DURATION
EFT [Earliest Finish time] = EST+ DURATION
LFT [Latest Finish time] = L at Head of an activity
Total Float =(LST-EST)
Free Float= TOTAL Float- Head Slack
Question: -1. Following data is pertaining to a project:
Activity Preceding Activity Duration (Weeks)
A - 5
B - 4
C A 8
D B 4
E C, D 3
F C, D 2
G E 1
(i) Draw the arrow diagram and project completion time.
(ii) Determine EST, EFT, LST & LFT for all activities.
(iii) Determine all types of floats.
(iv) Determine all types of floats.
Question-2. A small project consists of six activities. The six activities are as follows
Activity A B C D E F
Preceding Activity - A A B C D, E
Time (In days) 6 7 9 12 7 8
i. Draw network diagram and find project completion time
ii. Calculate EST, EFT, LST, LFT and free float for each activity.
Question -3. For the following project-
Activity A B C D E F G H
Preceding - A A B B C, D E F
Duration 4 6 2 6 3 4 1 2
(i) Draw network diagram.
(ii) Find critical path and project completion time
(iii) Calculate EST, LST, EFT & LFT and total float for all activities

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Question-4. Details of a small project are given below.
Activity Preceding Duration
A - 5
B - 10
C - 15
D B 4
E B 5
F A, D 5
G A, D 2
H A, D 6
J A, C, D, E 10
K F 10
L G, K 3
(a) Determine project duration.
(b) Determine critical path.
(c) Calculate total float for each activity.
Question: -4. Following data is pertaining to a project:
Activity Preceding Activity Duration (Weeks)
A - 3
B - 14
C - 4
D A 10
E A 5
F B 1
G C, D 4
H C, D 6
I F, G 1
(i) Draw the arrow diagram and project completion time.
(ii) Determine EST, EFT, LST & LFT for all activities.
(iii) Determine all types of floats.
Question: -5. The details of various activities of a project are given below.
Activity Predecessor t0 tm tp
A Nil 1 3 7
B Nil 1 2 4
C A 2 4 8
D A 2 5 11
E B 3 6 12
F C, D 3 7 15
G E 1 4 10
H F, G 2 6 14
(i) Draw network diagram and find critical path and time
(ii) Determine EST, EFT, LST & LFT for all activities.
(iii) Find total float, Free float, Independent Float & Interference float

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 Question: -6. The utility data for a network are given below:
Activity 1-2 1-3 2-3 2-4 3-4 3-5 4-5 4-8 5-6 5-7 6-7 6-8 7-8
Duration (months) 8 10 4 0 5 6 4 8 5 7 3 5 3
(i) Draw network diagram and find critical path and time
(ii) Determine EST, EFT, LST & LFT for all activities.
(iii) Find total float, Free float, Independent Float & Interference float
Question: -7. A Partech Computers limited is having a small assembly plant in Pune were
they assemble personal computers through nine interlinks activities. the time duration is
given below:
Activity A B C D E F G H I J K
Preceding - - - A B B C D E, G F H, I, J
Duration 2 2 1 4 8 5 3 1 5 4 3
(iv) Draw network diagram.
(v) Find critical path and project completion time
(vi) Calculate EST, LST, EFT & LFT
(vii) Head slack and tail slack
(viii) Find all types of floats.
PROBLEM BASED ON CRASHING CONCEPTS
Question-1. The time cost estimates and precedence relationship of various activities
constituting a project are given in the table below:
Activity Time (Days) Cost in Rs.
Normal Crash Normal Crash
1-2 8 6 100 200
1-3 4 2 150 350
2-4 2 1 50 90
2-5 10 5 100 400
3-4 5 1 100 200
4-5 3 1 80 100
a). Draw a network diagram of the project.
b). If the indirect cost is 70/-per day, determine the optimum duration and cost of the
project
Question-2. The time and cost estimates and precedence relationship of various activities
constituting a project are given in the table below:
Activity Predecessor Time(months) Normal cost (Rs.)
Normal Crash
A -- 4 3 600
B -- 6 4 1500
C -- 2 1 380
D A 5 3 1500
E C 2 2 1000
F A 7 5 1150
G D, E, B 4 2 1000

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The increments in the cost after crashing various activities are as shown in table below:
Activity A B C D E F G
Increment in cost (Rs. '00) 300 1000 220 1000 0 600 1400
Indirect cost varies as follows:
Months 15 14 13 12 11 10 9 8 7 6
Cost (Rs. '00) 6,000 5,000 4,000 2,500 1,750 1,000 750 500 350 250
i) Draw an arrow diagram for the given project anf find critical path and critical time.
ii) Determine the project duration which will result in minimum total and project cost.
Question-3. Following are the precedence requirements, normal and crash activity times, and
normal and crash costs for construction project:
Activity Preceding Activity Normal Crash Normal cost Crash
time time(weeks) Cost
A 4 2 10000 11000
B A 3 2 6000 9000
C A 2 1 4000 6000
D B 5 3 14000 18000
E B, C 1 1 9000 9000
F C 3 2 7000 8000
G E, F 4 2 13000 25000
H D, E 4 1 11000 18000
I H, G 6 5 20000 29000
a) Calculate project duration
b) Calculate slope of crashing of each activity.
c) To shorten the project by 2 weeks which tasks would be shortened and what would the
final project cost be?
Question-4. A company is in assembly production and cost are of operators required.
Activity Predecessor Normal Crash Workers
Time (Day) Time(day) Blender Packers Fillers
A 6 4 2 2
B 8 6 3
C 10 5 1 2 1
D A 4 2 2 1
E C 5 3 2 1
F A 9 7 1 1 1
G D, E, B 12 8 1 2
Cost of Workers:
Workers Normal cost per day Crash Cost per day
Blender 250 500
Packers 50 100
Fillers 200 400
Determine normal project duration.Determine what activity need to be crashed to reduce
project duration by 2 days . Detemine project cost.

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Question-5. A company is in assembly production and cost are of operators required.
Activity Predecessor Normal Crash Workers
Time (Day) Time(day) Blender Packers Fillers
A 4 3 3
B 3 3 1 1
C A, B 3 2 2 1
D A 6 4 1 2
E C, D 5 4 1 2
F A, B 10 6 2 1 1
G E, F 3 2 2
The oprvetors work for 8 hrs/day. The normal wages for different skills are as below: Blender
Rs 250/hr, Packer Rs 50/hr & Filler Rs 200/hr.
The cost of manpower resource is assumed to be equaly spread over time duraion for each
activity. The duration of each ativity can reduced by using equal no. of operators having
better skills. Better skilled operators are paid at double the normal rate. The reduced duration
of each activity is given as crash time. Determine normal project duration.
Determine what activity need to be crashed to reduce project duration by 2 days . Detemine
project cost.
Question-8. Consider a project with following details. Use crashing or project compression
technique to reduce project duration by 3.
Activity Preceding NT NC CT CC
A 4 33 3 34
B 6 37 5 44
C A 5 13 4 17
D A, B 12 61 12 61
E C 11 35 8 53
F D, E 6 37 5 39
G D 8 37 8 37
H E 9 58 8 64
I F, G 6 13 4 31
J F, H 12 25 10 45
K I, J 10 23 8 43

Question-7. You are given the following information for a project with eight activities:
Activity Normal Duration Crash cos /day Crash time
1-2 6 80 2
1-3 8 90 4
1-4 5 30 2
2-4 3 - 0
2-5 5 40 2
3-6 12 200 4
4-6 8 50 3
5-6 6 - 0

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The direct cost involved for completing the eight activities in normal duration is Rs.
6,500.00 and the indirect cost Rs. 160.00 per day.
i) Draw a network diagram, find critical path, normal project completion time and normal
project cost.
ii) Crash the project duration to find the total cost of completing the project in 17 days.

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 PREVIOUS YEAR UNIVERSITY PAPER

Project Management_May-24

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 Project Management _Dec-23
Duration : 3hrs. Total Marks : 60
Instruction for Students:
a. There are in all seven questions.
b. Question no-1 is compulsary and carries 20 marks.
c. Attempt any four out of the remaining question from Q2 to Q7. All questions carry
10 marks each. Each sub- question carries 5 marks.
d. Calculators are allowed to be used
e. Figures to the right indicat marks.
Q1. Attempt All sub question from following:
A company has taken up a sepecial project consististing of 10 activities whose thre-
point time estimation are inserted in table
Activity 𝑡𝑜 𝑡𝑚 𝑡𝑝
1-2 1 2 3
1-3 1 2 3
1-4 1 2 3
2-5 4 9 20
3-5 2 5 14
3-7 3 6 15
5-7 1 2 9
4-6 2 4 6
6-7 3 3 3
7-8 4 4 4
i. Draw the network diagram and find critical path and expected completion time
ii. Find the probability that the project is completed in 17 weeks
iii. What is the probability that project will not be completed in 20 weeks
iv. If the project includes a penalty charge of 1,00,000 per week for any delays
beyond 19 weeks. What is the probability of paying a penalty of more than
5,00,000?
v. What project duration will have 95% confidence of completion?
vi. If the project manager wants to complete the project with 95% confidence in 21
weeks. By how much time should he crash average project completion?
Q2(A). A toy manufacturing company is considering investing in a project requiring a
capital outlay of 5,00,000,00. Forecasts of annual income after depreciation but before tax is
follows:
Year 1 2 3 4 5
Amount 70,000,00 70,000,00 60,000,00 60,000,00 30,000,00
Depreciate may be taken at 20% on original and income tax at 50% of net income. Evaluate
project using pay back method.

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Q2(B). Calculate Net present value of two project A & B by suggesting which of the project
should be accepted assuming a discount rate of 10%.

A B
Initial investment 30,000,00 40,000,00
Estimated life time (years) 5 5
Scrap Value 2,000,00 5,000,00
The profit before depreciation and after taxes cash flows are as follows:
Year 1 2 3 4 5
A CIF 800000 1200000 1200000 500000 400000
B CIF 2500000 1500000 800000 500000 400000
Q2(C). Write a detailed note on Capital Budgeting.
Q3(A). Calculate the Debt Service Coverage ratio for granting term loans give
recommendations from the given project-
Year 2016 2017 2018 2019 2020
EBIT (in Lakhs) 400 450 500 580 640
Additional Information-
(i). Tax rate @ 25%
(ii). The principal amount of the loan is repayable equally along with interest payable on
opening balance of loan
(iii). Loan amount in consideration 1500 lakhs to be contracted at the rate of 12% per annum.
(iv). Repayment tenure is 5 years.
(v). Total capital investment in the project is 2000 lakhs depreciable equally over 5 years.
Q 3(B). You are working as a project manager on a missile manufacturing project for which
you have a total budget of 50 crores. During the project audit it was found that you have spent
20 crores so far. The project team has completed 40% of the project work, but when auditor
checks the schedule, it says that you should have completed 50% of the work. Calculate CV,
SV, SPI and TCPI.
Q3(C). Short note of S-curve.
Q4(A). The demand for an item is observed for 15 months and is recorded as shown below
Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Demand 280 288 266 295 302 310 303 328 309 315 320 332 310 308 320
(a). Calculate 4-month simple moving average as forecasts along with MSE, MAD and
MAPE
(b). Calculate exponential smoothed as forecasts for 𝛼 = 0.3 . The initial forecasts for first
month is 285.Also find MSE, MAD and MAPE.

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Q5(A). Attempt any two sub-questions from the following
a. A small project consists of six activities. The six activities are as follows

Activity A B C D E F
Preceding Activity - A A B C D, E
Time (In days) 6 7 9 12 7 8
i. Draw network diagram and find project completion time
ii. Calculate EST, EFT, LST, LFT and free float for each activity.
Q5(B). For the following project-
Activity A B C D E F G H
Preceding - A A B B C, D E F
Duration 4 6 2 6 3 4 1 2
(i) Draw network diagram.
(ii) Find critical path and project completion time
(iii) Calculate EST, LST, EFT & LFT and total float for all activities
Q5 (c). Write difference CPM and PERT
Q6(A). You are given the following information for a project with eight activities:
Activity Normal Duration Crash cos /day Crash time
1-2 6 80 2
1-3 8 90 4
1-4 5 30 2
2-4 3 - 0
2-5 5 40 2
3-6 12 200 4
4-6 8 50 3
5-6 6 - 0
The direct cost involved for completing the eight activities in normal duration is Rs.
6,500.00 and the indirect cost Rs. 160.00 per day.
i) Draw a network diagram, find critical path, normal project completion
time and normal project cost.
ii) Crash the project duration to find the total cost of completing the project
in 17 days.
Q6(B).

Q6(c).

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Q7. Attempt any two sub -questions from following
b. Project charter
c. Roles and Responsibilities of a project Manager
d. Detailed project Report (DPR)

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 Project Management _JUNE-23

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 Project Management _May-19

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 Project Management _May-18

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 Project Management _May-20_Online

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