1. What is Project?

A project can be defined as a temporary endeavor undertaken to create a unique product or service. It is
a single use plan.

2. What is Project Management?

Project management means application of skills and knowledges and the use of tools and techniques
applied to activities in a project to complete the project as defined in the scope.
OR,
The body of knowledge concerned with principles, techniques, and tools used in planning, controlling
monitoring and review of projects.
Source: - http://www.businessdictionary.com/definition/project-management.html#ixzz3uDTND5Vc

OR,
Project management is an area of endeavor involving a methodical approach to planning and guiding
project processes from start to finish.
Source: - http://searchcio.techtarget.com/definition/project-management

3. Who are the important internal and external stakeholders?

Internal Stakeholders
Project sponsor
Project team
Support staff
Internal customers
Senior management
Functional managers
Project manager

External Stakeholders
External customers
Competitors
Suppliers
Others affected by the project but not
directly

Conception phase

ii)

Definition phase

iii)

Planning and organizing phase

iv)

Implementation phase

v)

Project clean

such

concerned citizens etc.

4. What are the stages of a project life cycle (PLC)?

i)

involved

as

govt.,

5. Classification of projects:-

6. Means of Financing a Project

Share Capital:a) Equity Capital

b) Preference Capital

Term Loans
Debenture Capital:a) Convertible Debentures
b) Non-convertible Debentures

Deferred Credit: - Credit facility provided by suppliers of the plant and machineries; that is
payment for machinery can be made over a period of time.

Incentive Sources:- Offered by government and govt. agencies.

a) Seed Capital Assistance:- Provided at a nominal rate of interest (to eanable the
promoter to meet project contributions).
b) Capital Subsidy (to attract industries to certain locations.)

c)

Tax Deferment or, Exemption:- Particularly from sales tax; for certain period

Miscellaneous Sources:a) Unsecured Loans

b) Public Deposits
c) Leasing
d) Hire Purchase Finance

7. Evaluate the benefit cost ratio as an investment criterion.

Ans:When, BCR>1; Acceptance of project
BCR=1; Indifferent
BCR<1; Rejection of project

8. What are similarities and dissimilarities between the UNIDO approach and the LITTLEMIRRLEES approach?
a) Similarities:i)
Calculating accounting (shadow) prices particularly for foreign exchange savings and
unskilled labor; the calculation of shadow price particularly for foreign exchange saving
and unskilled labor is same in both methods.
ii)
Considering the factor of equity.
iii)
Using DCF (Discounted cash Flow) analysis.
b) Dissimilarities:i) The UNIDO approach measures cost and benefits in term of domestic rupees price whereas
the L-M approach measures cost and benefit in terms of international prices.
ii) The UNIDO approach measures cost and benefit in terms of consumption whereas the L-M
approach measures costs and benefits in terms of uncommitted social income.
iii) The stage by stage approach of UNIDO focus on efficiency, saving, and redistribution
consideration in different stages. The L-M approach, however, take these consideration
together. (UNIDO approach focuses efficiency, saving and redistribution of income stage by
stage while LITTLE-MIRRLEES approach considers the same in totality).

9. PERT & CPM uses:PERT (Program Evaluation & Review Technique) is primarily used in research and development
projects. CPM (Critical Path Method) is mainly used in construction projects.

10. What is Schedule?

A schedule is the conversion of a project action plan into an operating timetable. In project
management, a schedule is a listing of a project's milestones, activities, and deliverables, usually with
intended start and finish dates.

11. Termination of a project?

A project can be terminated by 4 ways:i)
By Extinction:- successfully completion or failure; external environmental change
ii)
By Addition:- The project becomes a formal part of the parent organization
iii)
By Integration:- Project assets absorbed by the parent.

iv)

By Starvation:- For budget decrement

12. When to terminate a project?

a) Some questions to ask when considering termination: Has the project been obviated (hindered) by technical advances?
Is the output of the project still cost-effective?
Is it time to integrate or add the project as a part of regular operations?
Are there better alternative uses for the funds, time and personnel devoted to the project?
Has a change in the environment altered the need for the projects output?
b) Fundamental reasons why some projects fail to produce satisfactory answers to termination
questions:
A project organization is not required
Insufficient support from senior management
Naming the wrong person as project manager
Poor planning
These and a few other reasons are the base cause of most project failures.

13. What is Gantt chart?

Type of bar-chart that shows both the scheduled and completed work over a period. A time-scale is
given on the chart's horizontal axis and each activity is shown as a separate horizontal rectangle (bar)
whose length is proportional to the time required (or taken) for the activity's completion.
A Gantt chart is a visual representation of a project schedule. A type of bar chart, a Gantt charts show
the start and finish dates of the different required elements of a project. Henry Laurence Gantt, an
American mechanical engineer, is recognized for developing the Gantt chart.
Typically, tasks are shown on the vertical axis, and the project time span is represented on the
horizontal axis. Each task has a corresponding bar that shows the time span required for that task.
The bar can be filled in to show the percentage of the task that has been completed.

14. The project manager needs two kinds of credibility:Technical Credibility:- perceived by the client, senior executives, the functional departments,
and the project team as possessing sufficient technical knowledge to direct the project.
Administrative Credibility: - keeping the project on schedule and within costs and making
sure reports are accurate and timely. Must also make sure the project team has material,
equipment, and labor when needed.

15. Top Down Budgeting:A top-down budget process means that a binding decision on budget aggregates is taken before
allocating expenditure within that aggregate. The aggregated estimate then assigned to lower level
managers who then break down the budget into smaller segments; this process continues to the
lowest level

16. Experience Curve and Learning curve:The experience curve (not to be confused with learning curve) is a graphical representation of the
phenomenon explained in the mid-1960s by Bruce D. Henderson, founder of the Boston Consulting
Group. It refers to the effect that firms learn from doing, which means that the higher the cumulative
volume of production (X), the lower the direct cost per new unit produced (C). Therefore, the
experience curve will be convex and have a downward slope, as shown in the adjacent diagram.
There is a simple rationalization behind all this: there is a reduction in the average cost of production
of a particular product, as a consequence of an increase in the firms experience. The time and cost
of producing a unit of output will be reduced, as learning economies, economies of scale, economies
of scope, etc. appear due to the cumulative output increase and other process related growth. The
difference between learning curves and experience curves is that learning curves only consider time
of production (only in terms of labor costs), while experience curve is a broader phenomenon related
to the total output of any function such as manufacturing, marketing, or distribution.

The experience curve is defined by the following function:-

Cn = C1 X-a
Where, C1 = direct cost of first unit of production
Cn = direct cost of nth unit of production
X = cumulative volume of production
a = experience rate (%)

The learning curve (not to be confused with experience curve) is a graphical representation of the
phenomenon explained by Theodore P. Wright in his Factors Affecting the Cost of Airplanes, 1936. It
refers to the effect that learning had on labor productivity in the aircraft industry, which translates into a
relation between the cumulative number of units produced (X) and the average time (or labor cost) per
unit (Y), which resulted in a convex downward slope, as seen in the adjacent diagram.

There is a simple rationalization behind all this: the more units produced by a given worker, the less time
this same worker will need to produce the following units, because he will learn how to do it faster and
better. Therefore, when a firm has higher cumulative volume of production, its time (or labor cost) per unit
will be lower. Wrights learning curve model is defined by the following function:

Wrights learning curve model is defined by the following function:

Where,

Y = average time (or labor cost) per unit

a = time (or labor cost) per unit
X = cumulative volume of production
b = learning rate (%)

17. a)

What is Benchmarking?

Benchmarking is the practice of a business comparing key metrics of their operations to other similar
companies. Here, the business or firm compares key metrics (performance, quality, cost control etc.) with
similar type of firm which is best in class; taking it as a standard.

b) Benchmarking Process
Step one: Determining benchmark focus - During this phase, the company determines the specifics of
the research project. (e.g., which companies will they include in the research, and what types of metrics
they will compare).
Step two: Planning and research - During this phase, the company puts the resources together to
implement the project e.g., develop surveys, seek cooperation from other companies, and find databases
already available.
Step three: Gathering data- During this phase, the data is collected through the methodology
determined in the planning and research phase.
Step four: Analysis: - After gathering the data, the company uses statistical techniques to examine and
create the findings.
Step five: Recommendations: - After analyzing the data and the areas where the company can improve,
recommendations are developed.
Step six: Implementation: - After reviewing recommendations, the company implements those that are
feasible.