(ay THE UNIVERSITY OF TRINIDAD & TOBAGO FINAL ASSESSMENT/EXAMINATION APRIL 2016 Course Code and Title: BUSI2009 ~ Project Management Programme: B.ASe. Process Engineering Date: April 13, 2016 ‘Time: 9am-12n00n Duration: 3 hours PLEASE READ ALL INSTRUCTIONS CAREFULLY BEFORE YOU BEGIN THIS EXAMINATIO! Instructions to Candidates 1. This paper has four (4) pages and six (6) questions. 2. You are required to answer FIVE (5) questions for a total of 100 marks. 3. Your score will be based on the first five (5) questions presented in the answer booklet, if more than 5 questions are attempted. 4. Full marks will not be awarded if full working is not shown, where necessary. 5. Scientific calculators are allowed. Key Examination Protocol 1. Students please note that academic dishonesty (or cheating) includes but is not limited to plagiarism, collusion, falsification, replication, taking unauthorised notes or devices into an examination, obtaining an unauthorised copy of the examination paper, communicating or trying to communicate with another candidate during the examination, and being a party to impersonation in relation to an examination. 2. The above mentioned and any other actions which compromise the integrity of the academic evaluation process will be fully investigated and addressed in accordance with UTT’s academic regulations. Please be reminded that speaking without the Invigilator’s permission is NOT allowed. ©University of Trini and Tobago Page 1 of 4 ‘erm 2 2015/2016 Final Examinations BUSI2009Question 1 a) b) °) a Question 2 a) b) ‘What is a project? Identify three (3) key differences between projects and processes? (4 marks) ‘Where in the project life eycle are the intensity level of resources and client interest at their highest? Why is this case? (4 marks) Describe the three (3) basic forms of organization structure, highlighting one (1) strength and weakness of each. (7 marks) ‘What are some of the principal reasons why project management has become such @ popular business tool in recent years? (S marks) How can a payback period approach be used to evaluate potential projects? (3 marks) ‘Your company is seriously considering investing in a new project opportunity but cash flow is tight these days. Top management is concemed about how long it will take for this new project to pay back the initial investment of $50,000. You have determined that the project should generate inflows of $30,000, $30,000, $40,000, $25,000, and $15,000 for the next five years. Your firm’s required rate of retum is, 15%, Using the non-discounted payback method, advise your company how long it will take to pay back the initial investment. (7 marks) Your Vice President for IT informs you that she has researched the possibility of automating your organization’s order-entry system, She has projected that the new system will reduce labour costs by $25,000 each year over the next five years. The purchase price (including installation and testing) of the new system is $105,250. The system is expected to have a useful life of 5 years, after which time (in year 6) it can be sold in the secondary computer systems market for $10,250.What is the Net Present Value of this investment if the discount rate is 8.5% per year? (10 marks) Question 3 a) b) Provide examples and discuss the differences between direct and indirect costs. (5 marks) Assume that overhead is charged on a flat rate basis. Each member of the project is assigned an overhead charge of $200/week. What would the direct cost of labour be for an employee, given that she is assigned to the project for 160 hours at $8.50/hour? GB marks) (Univesity of Tinidad and Tobago Page 2 of 4 “Term 2 2015/2016 Final Examinations BUSI2008©) Define Jeaming curve theory and describe how learning curves are used in project management. (7 marks) 4) What is a budget contingency and what are two (2) reasons it might be useful? (5 marks) Question 4 8) What does a network diagram illustrate and wiy are they important in project management? (3 marks) b) An advertising project manager has developed a program for a new advertising campaign. In addition, the manager has gathered the time information for each activity, as shown in the table below. i, Calculate the expected activity times (round to nearest integer). (G marks) i late the activity slacks. What is the total project length? ( marks) ify the critical path. What are the alternative paths and how much slack time is associated with each alternative path? (G marks) iv. _ Identify the “burst” activities and the “merge” activities. (2 marks) Time Estimates (week) ‘Activity | Optimistic | Most Likely | Pessimistic | Immediate | Predecessor(s) A 1 2 = B 2 [7 = c 3 6 B D 6 14 A 3 : 2 AC 6 16 B G 1 6 [DEF ©) Distinguish between serial activities and concurrent activities. (4 marks) Question § a) Briefly explain the three principal methods for accelerating a project. (B marks) b) A project manager is faced with the decision to crash a project and has been given the following information. Activities of the critical path are highlighted with an asterisk. (CUsivesity of Trinidad and Tobaso Term 2 2015/2016 Final Examinations BUST009 Page of 4= Normal Crashed Activity Cost Duration | Extra Cost Duration a (weeks) (weeks) A 5 $3,000 3 Be 3 _| 5,000, oe [ce a 4,000 ss D [8 4,000 5 EF an 5,000 3 F came 2,500) 7 a oa 3,000 6 Identify the sequence of activities to be crashed. Assume project overhead costs acerue at a fixed rate of $1,000 per week and a penalty clause kicks in after week 20. Penalty is charged at $5,000 per week. Crash the project to its maximum time and calculate the total costs accruing on a weekly basis. (13 marks) ©) What are the four alternatives a project organization can adopt in deciding how to address their risks. (@ marks) Question 6 a) What is the difference between natural termination and unnatural termination of a project? (2 marks) b) Describe two (2) types of project termination. (4 marks) ©) Identify and describe the following terms: PV, EV, and AC. How do they relate to each other? (6 marks) 4) Assume you have collected the following data for your project. Its budget is $75,000 and it is expected to last 4 months. After two months, you have calculated the following information about the project: PV $45,000 EV $38,500 AC $37,000 Calculate the Scheduled Performance Index (SPI) and the Cost Performance Index (CPD. Based on these values, estimate the time and budget necessary to complete the project? “How would you evaluate these findings (ie, are they good news or bad news?) (8 marks) END OF EXAMINATION (@Universt of Trinidad and Tobago Page 4 of Term 220187016 Final Examinations BUSI2008