Assignment #2

1. Contrast risk with uncertainty. Describe the window of opportunity approach.

A dictionary definition of risk is the possibility of loss and injury. It is an unexpected event that may affect
one or some of your project objectives - it can be positively or negatively. Risk can affect anything:
people, processes, technology, and resources. These are events that might happen, and you may not be
able to tell when. Like flu season hitting your team all at once or a key product component is being on
backorder. There are separate risk response strategies for negative and positive. The objective of a
negative risk response strategy is to minimize their impact or probability, while the objective of a positive
risk response strategy is to maximize the chance or impact. Risks are also identified into two terms:
known and unknown. A known risk is a risk that is identified during the identifying of risk and unknown
risks are those you couldn't identify.

On the other hand, uncertainty is a lack of complete certainty. In uncertainty, the outcome of any event is
entirely unknown, and cannot be measured or guessed; you don't have any background information on
the event. Uncertainty is not an unknown risk. You completely lack the background information of an
event, even though it has been identified. In the case of unknown risk, although you have the background
information, you missed it during the identifying risk process.

2. On what basis does the real option model selection projects?

It attempts to estimate the opportunity cost of implementing the project now versus deferring its execution
to sometime in the future. The decisions, once made, are often very expensive to reverse so caution
should exercise when making final decisions. The cost of the project reduced by deferring it.

3. Contrast validity with reliability. What aspects, if any are the same.
Reliability and validity are closely related, but they meant different things. A measurement can be reliable
without being valid. However, if a measurement is valid, it is usually also reliable. Reliability refers to how
consistently a method measures something. If the same result can be consistently achieved by using the
same methods under the same circumstances, the measurement is considered reliable. For example,
you measure the temperature of a liquid sample several times under identical conditions. The
thermometer displays the same temperature every time, so the results are reliable.

On the other hand, validity refers to how accurately a method measures what it is intended to measure. If
research has high validity, which means it produces results that correspond to real properties,
characteristics, and variations in the physical or social world. High reliability is one indicator that
measurement is valid. If a method is not reliable, it probably isn't valid. For example, if the thermometer
shows different temperatures each time, even though you have carefully controlled conditions to ensure
the temperature of the sample stays the same, the thermometer is probably malfunctioning, and therefore
its measurements are not valid.
 Both reliability and validity are concepts used to evaluate the quality of research. They indicate how well a
method, technique or test measures something. Reliability is about the consistency of a measure and
validity is about the accuracy of a measure.

4. What is the strategic benefits of virtual teams for project management.

The strategic benefits of virtual teams for project management:
 You can save tons of money
 Your teams members are going to have a better work life balance
 Your team members will be more productive
 You can access a global talent pool
 You can provide 24x7 support
 You can scale easily
 Your communication will be transparent

5. By what criteria do you think managers judge selection models? What criteria should they use?
The criteria used by managers to judge selection models are the following:
 Realism. The model should reflect the reality of the firm's decision situation, especially the
multiple objectives of both the firm and its managers, bearing in mind that without a common
measurement system, a direct comparison of different projects is impossible. The model should
also take into account the realities of the firm's limitations on facilities, capital, personnel, and so
forth, and include factors that reflect project technical and market risks: performance, cost, time,
customer rejection, and implementation.
 Capability. The model should be sophisticated enough to deal with the relevant factors: multiple
periods, situations both internal and external to the project (e.g strikes, interest rate changes), and
so on.
 Flexibility. The model should give valid results within the range of conditions that the firm might
experience. It should be easy to modify in response to the changes in the firm's environment; for
example, tax law changes, new technological advancements that alter risk levels, and above all,
organizational goal changes.
 Cost Data-gathering and modelling costs. Should be low relative to the cost of the project and less
than the potential benefits of the project. All costs should be considered, including the cost of data
management and of running the model.
 Easy Computerization. It should be easy and convenient to gather and store the information in a
computer database and to manipulate data in the model through the use of a widely available,
standard computer package such as Excel.

6. What is the distinction between qualitative and quantitative measures.

 Qualitative measurements are ways of gaining a deeper understanding of a topic. Researchers who are
looking to find the meanings behind certain phenomenon or are investigating a new topic about which
little is known, use qualitative measures. Qualitative measures are often contrasted with quantitative
measures. Both are complex methods of research, however, qualitative measure typically deal with
textual data or words while quantitative measures analyze numerical data or statistics.

7. What is sacred cow? Give at least 3 examples.

A sacred cow is a type of project often suggested by top management that has taken on a life of its own.
It continues not due to any justification but “just because’. In the United States, the term “sacred cow” has
become an idiom used to denote someone or something that is exempt from criticism. A senior
manager’s blind loyalty to an obsolete product or process they introduced to the company long ago is an
example of a sacred cow. Another example would be a company’s loyalty to product line, like Hershey to
chocolate, even if it were a money loser.