Department of Industrial Engineering

School of Engineering
Department of Industrial Engineering

Semester: Summer 2016

IENG300 – Engineering Project Management Midterm

Instructors: Mrs. Rajaa Atieh, Mrs. Manal Dimachk, Dr. Faysal Yatim, Dr. Ahmad Kassas,
Mr. Ibrahim Serhan and Dr. Khaled Chahine

Date: Tuesday, August 2nd, 2016 Time: 14:00 – 15:15 (75 minutes)

Student Name: _____________________ Student ID: _______________ Section: ____

There are 5 questions in the booklet; each has several parts. Please answer all parts of the
questions to the best of your ability.

Marking Scheme

Questions Weight Mark

Question 1 10 points
Question 2 30 points
Question 3 15 points
Question 4 25 points
Question 5 20 points
Total 100 points

1. This booklet contains 10 pages including this one. Make sure all these pages are
attached.
2. Closed book examination. Formulas are provided as needed.
3. Do not take the staple out. The exam booklet must remain intact.
4. Cheating penalty will be an “F” grade on the exam.
5. Non-programmable calculators are allowed.
6. Mobile phones/devices are to be turned off and stowed away.
7. Students must sign out prior to leaving the exam room.

Good luck

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Question 1 (10 points):

In the table below, mark the following statements as either TRUE (T) or FALSE (F). If
you change your answer, scratch previous one and clearly re-write the new one.
Questions with a confusing answer will automatically get a zero mark. Wrong answers
do not penalize correct ones. The weight for each question is 1 point.

1. Defining is the first stage of the project life cycle and is characterized by the highest
level of effort.

2. Project management is the process of managing a group of ongoing, interdependent,

related projects in a coordinated way to achieve strategic objectives.

3. Knowledge explosion is one of the driving forces behind the demand for project
management.

4. Scenario planning represents incremental tactical planning.

5. Organization politics helps selecting projects based on facts and sound reasoning and
not on the power of people advocating projects.

6. New products are examples of strategic projects.

7. One of the limitations of the payback method is not considering profitability.

8. Increasing the required rate of return decreases the net present value of the project.

9. In the project portfolio matrix, bread and butter projects have high commercial
potential.

10. A strong priority system prevents poor utilization of resources.

Question 1 2 3 4 5 6 7 8 9 10

Answer F F T F F T T T F T

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Question 2 (30 points)

Choose the correct answer. Only one answer may be marked. Questions with more than
one answer will automatically get a zero mark. Wrong answers do not penalize correct
ones. The weight for each question is 2 points.
1. In characterizing objectives, SMART stands for:
a. Specific, Measurable, Assignable, Realistic and Time Related.
b. Sustainable, Modifiable, Approximate, Realistic and Tentative
c. Scalable. Memorable, Artistic, Realistic, and Time Bound
d. Secretive, Momentary, Addendum, Realistic, and Transient
2. From among the following activities, which is the best example of a project?
a. Driving to work.
b. Exercising.
c. Manufacturing iPods.
d. Building the highest tower in Beirut

3. Which of the following stages of the project life cycle involves releasing resources to
other projects and finding new assignments to team members?
a. Closing
b. Defining
c. Planning
d. Executing

4. Regardless of criteria differences among different types of projects, the most

important criterion for selection is:
a. Urgency
b. Strategic fit
c. Staying within core competencies
d. Improving customer loyalty
5. Providing guidance in establishing selection criteria and deciding how to balance the
available organizational resources among the different types of projects are inputs
from:
a. Project manager
b. Project office
c. Senior management
d. Functional manager
6. The following are advantages of the functional organization structure except:
a. No Change
b. Easy post-project transition
c. Flexibility
d. Fast
7. Subdividing the project into smaller and smaller work elements is:
a. Organization breakdown structure
b. Work breakdown structure
c. Work package
d. Subdeliverables

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8. The lowest level of the work breakdown structure is the:

a. Work package
b. Deliverable
c. Lowest subdeliverable
d. Project
9. An example of a milestone is:
a. A finished garage
b. Garage accommodates two large-size cars.
c. Contractor is responsible for subcontracted work.
d. Foundation poured on March 14, 2017
10. The tendency for the project scope to expand over time is known as:
a. Scope statement
b. Scope creep
c. Scope expansion
d. Scope change
11. All of the following are conditions for preferring top-down time and cost estimates
except:
a. Strategic decision making
b. High uncertainty
c. Unstable scope
d. Customer wants details

12. Software and system projects are frequently estimated using:

a. Nodes
b. Function points
c. Macros
d. Weights
13. Salary of the project manager is an example of:
a. Direct cost
b. Direct project overhead cost
c. General and administrative overhead cost
d. None of the above
14. An activity that spans over a segment of the project is called:
a. Ladder activity
b. Hammock activity
c. Predecessor activity
d. Burst activity

15. The attempt to recognize and manage potential and unforeseen trouble spots that may
occur when a project is implemented is known as:
a. Risk forecasting
b. Risk management
c. Contingency planning
d. Disaster protection

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Question 3 (15 points):

The table below shows the data collected for the deliverables of an online hotel reservation
software project.

Software Project: Online Hotel Reservation

Count Deliverables Complexity
10 Inputs 2
15 Outputs 5
20 Inquiries 5
10 Files 10
5 Interfaces 15

1. Calculate the total number of function points (5 pts).

The total number of function points is:

2. Is the function point method a top-down or a bottom-up estimation method? (2 pts)

Top-down estimation method.

3. Given the fact that one-person month is equal to 5 function points and assuming you
have 5 programmers, determine the time estimate of the project. (4 pts)

The time estimate is:

4. If the salary per month for one programmer is $2500, what is the cost estimate of the
project? (4 pts)

The cost estimate is:

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Question 4 (25 points):

The project office (PO) of your company is asking you to:

1. Draw the Activity on Node (AoN) network. (5 points)

2. Calculate the early start (ES), early finish (EF), late start (LS), late finish (LF) and
slack (SL). (10 points)
3. Identify the critical path(s). (5 points)
4. How soon can the project be finished? (2 points)
5. What is the significance of the critical path? (3 points)

The activities time estimates and their dependencies are summarized in the following table:

ID Description Predecessor Duration

A Proposal None 3
B Define requirements A 5
C Team composition A 7
D Code software B, C 20
E Build and test C, D 17
hardware
F Develop prototype D 15
G Test software E 3
H Deploy the system G, F 3
I Training H 2

Use the following legend to represent the node:

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Question 4 Solution

a. Draw the Activity on Node (AoN) network. (5 points)

b. Calculate the early start (ES), early finish (EF), late start (LS), late finish (LF) and slack. (10
points)

c. Identify the critical path (CP). (5 points)

A-C-D-E-G-H-I

d. How soon can the project be finished? (2 points)

55 time units

e. When the critical path is known, explain what does it mean to the project manager? (3 points)

The path(s) with the longest duration through the network; if an activity on the path is delayed,
the project is delayed by the same amount of time.

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Question 5 (20 points)

Energico: The Green Energy Company

Lebanon has always suffered from electric power outage due to several reasons such as
production shortage, degraded power grid, inefficient power plants, and poor maintenance.
Despite the several plans proposed by the government, an effective solution to this problem is
yet to be found. With the growing outage all over Lebanon, many Lebanese are relying on
expensive, privately owned diesel generators to meet their daily energy needs.

Energico is a young local company that specializes in green energy systems such as solar,
wind, and geothermal. It aims to become the leader of the Lebanese green energy sector
through research and innovation.

As a project manager in Energico, you are asked to manage a project that aims to implement
an innovative cost-effective and highly efficient standalone hybrid (solar + wind) power
system for residential usage. The power system would cost the customer $4800 and would
save around $1200 of electricity bills per year. The project is very important to the future of
the company as it reinforces its presence in the Lebanese renewable energy market and
increases its revenues.

Based on the presented facts, address the questions in the solution section.

Question 5 Solution

a. How would you classify the project? (3 pts) Why? (2 pts)

This project is best classified as strategic since it supports Energico’s long-run mission
through reinforcing its presence in the Lebanese market and increasing its revenues.

b. If a customer decides to buy Energico’s system, what would be the payback period of the
system? (3 pts) Give one limitation of the payback method. (1.5 pts)

Payback period= 4800/1200=4 years

- It ignores the time value of money,
- It assumes cash inflows for the investment period and not beyond
- It does not consider profitability

c. List three deliverables of the project.

o Project proposal (1.5 pts)
o Power system (1.5 pts)
o User manual (1.5 pts)

d. Fill the table below with three risk events and their responses.

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Risk Event Response

Unavailability of some system Mitigate: Search for similar components from foreign suppliers.
components in the local market. (1 pt) (1 pt)

Chief project engineer leaving Energico.

Mitigate: Establish a new lucrative reward system. (1 pt)
(1 pt)

Reduction in government incentives for Mitigate: Create an installment system with no down payment.
green energy systems. (1 pt) (1 pt)

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FORMULAS

The Payback Formula:

Payback period (yrs) = Estimated Project Cost/Annual Savings

AoN Calculations Formulas:

 Forward Pass Computations:

– EF = ES + Duration
Where EF is Early Finish & ES is Early Start

 Slack Computations:
– LS = LF – Duration
Where LS is Late Start & LF is Late Finish

 Backward Pass Computations:

– SL = LS – ES
– SL = LF – EF
Where SL is Slack

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