Amrita School of Engineering, Chennai

Amrita Vishwa Vidyapeetham

PROJECT MANAGEMENT (19MNG334)
Dr. Balaji Bakthavatchalam
Department of Mechanical Engineering
 COURSE OBJECTIVES
• To discuss the project life cycle and build a successful project from pre-
implementation to completion.
• To introduce different project management tools and techniques.

COURSE OUTCOMES
CO1: Appraise the selection and initiation of individual projects and its portfolios in
an enterprise.
CO2: Analyze the project planning activities that will predict project costs, time
schedule, and quality.
CO3: Develop processes for successful resource allocation, communication, and risk
management.
CO4: Evaluate effective project execution and control techniques that results in
successful project completion.
CDP
 EVALUATION

Internal Evaluation: 50 marks External Evaluation: 50 marks

S.No Component Marks

1. Quiz (3) 10
2. Assignments (1) 10 End sem exam
3. Periodical 1 15
4. Periodical 2 15
UNIT: 1
What is a Project ?

• Temporary endeavour to accomplish a need that may be economic, social,

political, entrepreneurial, philanthropic, environmental or otherwise.
• Each project has a life cycle (Conceptual-Active-Monitoring & Control-End
user)

It may be defined as following:

• An undertaking or venture to accomplish some objective or goal.
• A set of interrelated jobs whose accomplishment leads to the completion of
the goal.
• Jobs and activities, which are the constituents of any project, consume time
and resources and are governed by precedence relationships.
What is difference between Production and Projects?

• The production can be repeated continuously in batches or just once.

• If production is continuous it is referred as production line where the
operations are continuously repeated.
• If production is done for only one piece, it is referred as one-of–a-kind
production which is actually a project, where focus is on the unique product
made only once in contrast to the repetitive manufacturing making a large
number of same product.
 What is Project Management ?

Application of knowledge, skills, tools and techniques to

project activities to meet the project requirements/criteria.

• Several techniques apply to project planning activities (eg: scope

management, risk management, work breakdown structures and cost
estimation), scheduling (network development, precedence
diagrams, Gantt and PERT charts) and means of controlling projects
(earned value management).
Features of Projects:

 Well defines collection of jobs.

 Non-repetitive/Unique, one time effort.
 Jobs interrelated through precedence.
 Jobs consume time and resources.
 Coordination needed between individuals, groups and organizations.
 Constant pressure of conformance to time/cost/performance goals.
Variety of Projects:

 Personal Projects- Preparation for examination, Family function, Vacation etc.

 Local Projects-College function, Cleanliness drive, Construction of clubs.

 Organizational Projects-Construction of a building or a highway, Planning

and launching a new product.

 National Projects-Launching new satellite, Preparation of annual budget.

 Global Projects- Organizing peace mission, Space exploration, Environment

protection.
A project can be divided into 4 stages:

Project
Completion
Project and handover
Implementation to end user
Project
Planning and
Project Scheduling
Identification
and Selection
Life cycle of a Project:
 Life cycle of a Project: S-Curve

• S-Curve in any project is used to measure the progress performance.

• An S-Curve is a graph plotting the cumulative values over time for a project.
• Cumulative values on y-axis will be cost or can be units or labor hours and on
x-axis will be the time line.
• The graph is called S-Curve because it will be in an elongated “S” shape.

Benefits of S-Curve
• Helps track the project (Performance and Progress Evaluation).
• Helps make predictions (Cash flow forecasts).
• Mapping out the project on S-curve helps prepare the project stakeholders on the
resources and progress growth.
Life cycle of a Project: S-Curve
Life cycle of a Project: J-Curve
 Initiation of Projects:
A new project takes place in the following
three distinct phases:

 Project Identification
 Project Appraisal
 Project Selection
1.1 Project Identification

 Project Identification is a creative process and like other creative

process it is unpredictable and unstructured.

 The primary intention in this stage is to generate new ideas that

could be consider worthwhile for implementation.
Project identification begins in response to the specific need or
the objectives. Some of the typical objectives in pursuing
projects could be:

a) To increase profits
b) To minimize threats of losses
c) To become more competitive
d) To provide help after a disaster
e) To train people in a new area
f) To reduce pollution in a metropolis (eg. New Delhi)
g) To become successful entrepreneur
 Review the situation to
identify needs and
objectives for new
projects

OBJECTIVES

Strengths Weakness Internal

Opportunities Threats External

Brainstorming
Idea 1 Idea 2 Idea n

Screening of Ideas for compatibility Short listed ideas for a

with chosen criteria detailed appraisal
 SWOT Analysis

- After identifying the objectives to be achieved by the new project, it is

worthwhile to conduct a SWOT analysis so that the organization’s
strengths are highlighted and the opportunities and threats emerging
in an objective manner.
- The purpose is to generate ideas exploiting the emerging
opportunities.
- The participants in the brainstorming exercise would do well to
participate in the SWOT analysis prior to actual brainstorming so that
they become aware of the requirements and limitations of the system
they are dealing with.
1. Strengths
• Experience and expertise
• Financial position
• Capital raising capacity
• Industrial contacts
• Foreign collaboration
2. Weaknesses
• Newer unfamiliar technologies
• Inability to raise huge investments
• Lack of experience
• Lack of trained personnel
• Inability to forecast market trends
3. Opportunities
• Emerging technologies
• New products with new markets
• New processes with better features
• Special financing schemes
• Government and other incentives
4. Threats
• Competitors
• Poor state of the economy
• Outdated technology
• Unprofessional management skills
• New products and services
 Case study

Suppose an entrepreneur has been working as a supplier of automobile

spare parts to a number of retailers for the last 10 years. He has contacts
with major automobile manufacturers from whom he buys the spares at
company prices after negotiating suitable price discounts. He has now
accumulated enough wealth to contemplate setting up of a manufacturing
unit for a suspension unit used in 30% of the cars in the local market.
Conduct a SWOT ANALYSIS for the entrepreneur indicating how well
prepared he is to undertake his decision to switch from current role to a
potential manufacturer.
 Brainstorming for Idea Generation

- Brainstorming is a systematic procedure to utilize the vast knowledge

and experience of the experts in their respective fields.
- It is conducted in a group whose size vary from three to four
individuals on the lower side to 25-30 on the higher side. If the no. of
members > 10 it is desirable to form groups for convenient size and
conduct brainstorming session of each group separately.
- Each group has a coordinator who organizes these sessions.
- Brainstorming session can be done in structured or unstructured.
 Screening of Ideas

-After brainstorming the list of ideas is subjected to screening.

-It is not a detailed process but an attempt to select more worthwhile
ideas from the generated list.
-Ideas are screened on the basis of the criteria for eg:
a) Investment
b) Rate of return
c) Risk
d) Similarity to existing business
 Screening of Idea (Contd.)

e) Environmental impact
f) Competition
g) Profit
 Case study

“REDUCE THE VEHICULAR EMISSION IN A CITY”.

1. IDEA generation through Brainstorming

a. Restrict the registration of new vehicles
b. Enforce strict emission regulation for vehicles
c. Grow more trees/green belts in the city
d. Encourage use of car pools
e. Ban diesel run vehicles on road
f. Ban 10 year and older vehicles
g. Declare no traffic zones in the city
 2. Criteria for Screening
1. Effectiveness to achieve the objective
2. Cost of the proposal
3. Ease of the implementation
4. Time needed
Scale:
0- Very poor
1-Poor
2-Fair
3-Average
4-Good
5-Excellent(1-High; 2-Low; 3-Easy; 4-Minimum)
 Project Proposal Score Overall
Effect. Cost Ease Time

a. Restrict the registration of new vehicles 3 1 1 2 =7

b. Enforce strict emission regulation for vehicles 4 5 4 5 = 18

c. Grow more trees/green belts in the city 4 3 3 3 = 13

d. Encourage use of car pools 2 5 4 4 = 15

e. Ban diesel run vehicles on road 3 1 1 2 = 7

f. Ban 10 year and older vehicles 3 2 3 3 = 11

g. Declare no traffic zones in the city 3 2 3 3 = 11

1. Selection of Projects:

1.2 Project Appraisal-

a) Market Appraisal
b) Technical Appraisal
c) Financial Appraisal
d) Socio economic Appraisal
e) Ecological Appraisal
1. Selection of Projects:

1.2 Project Appraisal-

a) Market :
 Market appraisal of a project is concerned with
establishing the customers/clients of a project.
 Some of the important questions addressed at this stage
are:
- Who is the customer?
- What are his/her requirements?
- Which are the alternative products or services that satisfy
the customer’s needs?
- What is the competitive position of the product or service
via other competitors?
A Market research study based on
 personal interviews with prospective customers,
 questionnaire analysis,
 a historical survey of similar products,
 information of competitor performance from Internet or other sources and
brainstorming among the experts would help to identify the market potential of the
project by answering the following two basic questions:

1. What would be the aggregate demand of the proposed product or service?

2. What would be the market share of the project under appraisal?
Techniques commonly employed for purposes of forecasting:

a) Subjective or intuitive methods

• Opinion polls, interviews
• DELPHI
b) Methods based on averaging of past data
• Moving averages
• Exponential Smoothing
c) Regression models on historical data
• Trend Extrapolation
d) Casual or econometric models
e)Time-series analysis
• Decomposition
• Stochastic models
- There are two parameters:
- A) your share
- B) Total demand

MAJOR ISSUES
A) Past and current demand (static, erratic, steady increase or steady decrease)
B) Understanding the past and current supply position
C) Production possibilities and constraints
D) Import and Exports
E) Nature of competition
F) Cost structure
G) Elasticity of Demand
H) Consumer behaviour (preferences, requirements)
J) Distribution channels (marketing polices)
K) Administrative, technical and legal constraints.
1.2 Project Appraisal-

b) Technical Appraisal:
Primary objective of technical appraisal of the project is to
ensure that right decisions have been made with regard to size,
location, process selection and overall layout of proposed
facility.
 Whether prerequisites for success of project considered?
 Good choices with regard to location, size, process,
machines etc.
Examples
- Refineries
- Pipelines
- Building cement, steel plants, automobile parts
- Construction
- Highways
- Flyovers

• The appraisal would have to be carried out by the respective experts who are
aware of industry practices, international standards and relevant knowledge
base in the field.

• The expert after carrying out the technical appraisal comments on the technical
feasibility of the project.
MAJOR ISSUES

A) Preliminary tests and studies

B) Availability of raw materials, power and other inputs
C) Optimal scale of operations
D) Choice of suitable production process
E) Choice of appropriate machines and equipment
F) Effluents and waste disposal
G) Proper Layouts of plant and buildings
H) Realistic work schedules
I) Socially acceptable technologies
1.2 Project Appraisal-

c) Financial Appraisal:
 This is one of the most important appraisals carried out on
a project.
 The primary purpose is to determine the cost and revenues
over the life of the project and see whether there is an
adequate return on the investment.
 Financing project through institutional loans is also one of
the objectives.
The above objectives are met by collecting following data:

- Estimation of cost of the project and its timing.

- Estimation of the likely revenues during each period.
- Capital Investment
- The planning horizon of the project
- The risk in the project as evidenced by the worst and best values of costs and
revenues.
MAJOR ISSUES:
• Net present value
• Internal rate of return
• Before and after tax rates of return
• Equivalent annual cost (for comparing)
• Payback period
• Discounted payback
Net Present Value:

• Net present value is a capital budgeting analysis technique used to

determine whether a long-term project will be profitable.
• The premise of the NPV formula is to compare initial investment to
the future cash flows of a project.
• If there’s one cash flow from a project that will be paid one year
from now, then the calculation for the NPV is as follows:
If analyzing a longer-term project with multiple cash flows, then
the formula for the NPV of a project is as follows:

- Initial investment

Where,
Rt=net cash inflow-outflow during a single period t
i= discount rate or return that could be earned in alternative
investments.
t=number of time periods.
A project that costs $1,000 and will provide three cash flows
of $500, $300, and $800 over the next three years. Assume
that there is no salvage value at the end of the project and that
the required rate of return is 8%. The NPV of the project ?
Project X requires an initial investment of $35,000 but is expected to
generate revenues of $10,000, $27,000, and $19,000 for the first,
second, and third years, respectively. The target rate of return is
12%. Calculate NPV?
Calculate NPV.
A sum of $ 400,000 is invested today in an IT project may give a
series of below cash inflows in future:
$70000 in year 1
$1,20,000 in year 2
$ 1,40,000 in year 3
$ 1,40,000 in year 4
$ 40,000 in year 5
If opportunity cost of capital is 8% p.a. then should be accept or
reject the project?
Calculate NPV
A sum of $ 400,000 is invested today in an IT project may give a
series of below cash inflows in future:
$70000 in year 1
$1,20,000 in year 2
$ 1,40,000 in year 3
$ 1,40,000 in year 4
$ 40,000 in year 5
If opportunity cost of capital is 15% p.a. then should be accept
or reject the project?
Internal Rate of Return

• IRR is a discount rate at which NPV (Net present value) becomes

zero/ IRR is the opportunity cost at which the NPV becomes zero.
• It indicates how much rate of return are we getting from the project.

Why IRR? What is the use of calculating IRR?

• It is used to rank different project.
• The higher the IRR, more desirable it is to undertake that project.
• If all the other factors are same for different projects then the project
with the highest IRR should be considered.

**Accept the project when IRR>Discount rate or opportunity cost of

capital.
Relation between IRR, Discount rate and NPV

• If IRR> Discount rate or opportunity cost of capital-NPV is positive.

• If IRR< Discount rate or opportunity cost of capital-NPV is negative.
• If IRR= Discount rate or opportunity cost of capital-NPV is zero

**As long as NPV is positive the project is financially viable.

The cost of a project is $1000. It has a time horizon of 5 years and the
expected year wise incremental cash flows are:
Year 1: $200
Year 2: $300
Year 3: $300
Year 4: $400
Year 5: $500
Compute IRR of the project. If opportunity cost of capital is 12%.
Should we accept the project?
Suppose a project has following data:

Initial Investment=Rs.3,00,000
Annual cost of operation Rs. 20,000
Expected annual revenues: a) Rs. 1,00,000 p.a for first two years
b) Rs. 2,00,000 p.a for next three years
Planning horizon of 5 years
Revenues
100 100 200 200 200
Costs

300 20 20 20 20 20

Time

0 1 2 3 4 5
Undiscounted Cash flow before tax

Year 0 1 2 3 4 5

Cash -300 80 80 180 180 180

flow

Cumm. -300 -220 -140 40 220 400

cash
Flow

NPV= 400 (in thousands)

Payback period= 2+ ((0-(-140))/(40-(-140))*(3-2))=2.78 yrs
Discounted Cash flow for interest rate 10%

Year 0 1 2 3 4 5
Cash -300 80 80 180 180 180
flow
Dis. 1 0.909 0.826 0.751 0.683 0.621
Factor
DCF -300 72.72 66.08 135.18 122.94 111.78
Cum. -300 -227.28 -161.2 -26.02 96.92 208.7
DCF

NPV= 208.7 (in thousands)

Payback period= 3+ ((0-(-26.02))/(92.92-(-26.02))*(4-3))=3.21 yrs
Discounted Cash flow for interest rate 20%

Year 0 1 2 3 4 5
Cash -300 80 80 180 180 180
flow
Dis. 1 0.833 0.694 0.579 0.482 0.402
Factor
DCF -300 66.64 55.52 104.22 86.76 72.36
Cum. -300 -233.36 -177.84 -73.62 13.14 85.50
DCF

NPV= 85.50 (in thousands)

Payback period= 3+ ((0-(-73.62))/(13.14-(-73.62))*(4-3))=3.8 yrs
Discounted Cash flow for interest rate 30%

Year 0 1 2 3 4 5
Cash -300 80 80 180 180 180
flow
Dis. 1 0.769 0.592 0.455 0.350 0.269
Factor
DCF -300 61.52 47.36 81.90 63.00 48.47
Cum. -300 -238.42 -191.12 -109.22 -46.22 2.2
DCF

NPV= 2.2 (in thousands)

Payback period= 4+ ((0-(-46.22))/(2.2-(-46.22))*(5-4))=4.95 yrs
Discounted Cash flow for interest rate 35%

Year 0 1 2 3 4 5
Cash -300 80 80 180 180 180
flow
Dis. 1 0.741 0.549 0.406 0.301 0.223
Factor
DCF -300 59.28 43.92 73.08 54.18 40.14
Cum. -300 -240.72 -196.80 -123.72 -69.54 -29.40
DCF

NPV= -29.40 (in thousands)

Payback period> 5 years
IRR can be evaluated using linear interpolation formula:

y=y1+((x-x1)/(x2-x1))*(y2-y1)

IRR=y= 30+((0-2.2)/(-29.40-2.2))*(35-30)= 30.35

1.2 Project Appraisal-

d) Socio-Economic Appraisal:

• Social cost – benefit analysis.

• Direct economic benefits and costs in terms of shadow
prices.
• Impact of project on distribution of income in society.
• Impact of level of savings and investments in society.
• Impact on fulfilment of national goals a) Self sufficiency
b) Employment
c) Social order
1.2 Project Appraisal-

e) Ecological Appraisal:

• Impact of project on quality of Air, Water, Noise,

Vegetation, Human life.
• Major projects, such as following can cause environmental
damage:
a) Power plants
b) Irrigation schemes
c) Industries (drugs, chemical, leather etc.)
• Likely damage and the cost of restoration.
1.3 Project Section-

Multiple criteria in Projects:

a) Investment
b) Return (IRR)
c) Payback
d) NPV
e) Risk
f) Future growth prospects
g) Similarity with the existing
h) Environmental implications
1.3 Project Section-

Evaluation of Projects
- Rarely would one project emerge as the best in all the criteria’s
selected- if this condition occurs then the project is dominant project
and it should clearly be selected
- In general their will be a set of non-dominant projects the choice out
of which is not normally easy.
- Management priorities to various criteria could help in making the
decision.
 1.3 Project Section-

Criteria

Tangible Intangible
(measurable eg. (non-
in Rs., %, year) measurable)

Commensurate Incommensurate Non measurable

units units (score on a
subjective scale 0-9)
DECISION MATRIX

Criteria C1 C2 C3 C4 Cn
Projects
P1 X11 X12 X13 X1n S1

P2 X21 X22 X23 X2n S2

P3 X31 X32 X33 X3n S3

S4

Pm Xm1 Xm2 Xm3 Xmn Sm

Return

• P1

• P6
• P2

• P3 • P5 • P8

• P7
• P4

NPV
Preferred Solution:

-The dominant solution (if exists).

-The non-dominant solution set.
-The selection among non-dominant solution will involve tradeoffs and
will be governed by priorities or weightages to different criteria.
Weightage to criteria

• The priorities or weights to the different criteria may be obtained by:

a) Mutual consultations or opinion polls
b) Pair wise comparison between the criteria
c) Establishing a hierarchy of priorities
Criteria for Project Selection (worst-best)

C1 Investment (in lakhs of Rs.) (10-2)

C2 IRR (%) (10-40)
C3 Payback(years) (10-2)
C4 Risk (v high, high, medium, low, v low)
C5 Future Growth (v poor, poor, medium, good, v good)
C6 Similarity (v poor, poor, medium, good, v good)
Performance of Competing Projects

Criteria C1 C2 C3 C4 C5 C6
Projects
P1 10 40 8 HIGH GOOD V.GOOD S1

P2 6 25 4 V.HIGH MEDIUM GOOD S2

P3 8 30 10 LOW V.GOOD MEDIUM S3

P4 3 10 2 MEDIUM POOR V.POOR S4

P5 2 20 2 V. LOW V.POOR POOR

Scale for Intangibles

Cost Attributes Benefit Attributes

Very high 1.0 1.0 Very Low

High 3.0 3.0 Low
Average 5.0 5.0 Average
Low 7.0 7.0 High
Very Low 9.0 9.0 Very High
Example: Fighter Aircraft Selection

X1 Maximum speed (Mach number)

X2 Ferry range (Nautical Miles)
X3 Maximum payload (lbs)
X4 Acquisition cost (Million dollars)
X5 Reliability (High-Low)
X6 Manoeuvrability (High-Low)
Decision Matrix
X4 is cost criteria
Criteria X1 X2 X3 X4 X5 X6
Projects
A1 2.0 1500 20000 5.5 AVG. V.HIGH

A2 2.5 2700 18000 6.5 LOW AVG.

A3 1.8 2000 21000 4.5 HIGH HIGH

A4 2.2 1800 20000 5.0 AVG. AVG.

 Technique for Order Preference using Similarity to Ideal Solution
(TOPSIS)
Step 1: Obtain the decision matrix after using numerical scale for
intangibles.
Criteria X1 X2 X3 X4 X5 X6
Projects
A1 2.0 1500 20000 5.5 5 9

A2 2.5 2700 18000 6.5 3 5

A3 1.8 2000 21000 4.5 7 7

A4 2.2 1800 20000 5.0 5 5

Normalized Decision Matrix

Step 2: Obtain the normalized decision matrix, R, using relationship

Rij= xij/ sq. root (sum, i=1…………………..m of xij^2

0.4671 0.3662 0.5056 0.5063 0.4811 0.6708

0.5839 0.6591 0.4550 0.5983 0.2887 0.3727

0.4204 0.4882 0.5308 0.4143 0.6736 0.5217

0.5139 0.4392 0.5056 0.4603 0.4811 0.3727

Weighted Decision Matrix
Step 3: Obtain the weighted decision matrix, V, by multiplying each
column of R by corresponding weight
W= (0.2, 0.1, 0.1, 0.1, 0.2, 0.3)

0.0934 0.0366 0.0506 0.0506 0.0962 0.2012

0.1168 0.0659 0.0455 0.0598 0.0577 0.1118

0.0841 0.0488 0.0531 0.0414 0.1347 0.1565

0.1028 0.0439 0.0506 0.0460 0.0962 0.1118

Ideal & Negative ideal solutions
Step 4: Obtain the ideal (A*) and the negative ideal (A-) solutions
from the weighted decision matrix V.

A*= (0.1168, 0.0659, 0.0531, 0.0414, 0.1347, 0.2012)

A-= (0.0841, 0.0366, 0.0455, 0.0598, 0.0577, 0.111)

Separation measures
Step 5: Compute the separation measures from the ideal (Si*) and
negative ideal (Si-) solutions for all alternatives

Si*= Sq root (sum of squares for j=1,………….n of Vij-Vj*

Si-= Sq root (sum of squares for j=1,………….n of Vij-Vj-

A*= (0.1168, 0.0659, 0.0531, 0.0414, 0.1347, 0.2012)

0.0934 0.0366 0.0506 0.0506 0.0962 0.2012

0.1168 0.0659 0.0455 0.0598 0.0577 0.1118

0.0841 0.0488 0.0531 0.0414 0.1347 0.1565

0.1028 0.0439 0.0506 0.0460 0.0962 0.1118

A-= (0.0841, 0.0366, 0.0455, 0.0598, 0.0577, 0.111)

0.0934 0.0366 0.0506 0.0506 0.0962 0.2012

0.1168 0.0659 0.0455 0.0598 0.0577 0.1118

0.0841 0.0488 0.0531 0.0414 0.1347 0.1565

0.1028 0.0439 0.0506 0.0460 0.0962 0.1118

Separation measures
Ideal Solution Negative Ideal Solution

S1*=0.0545 S1-=0.0983
S2*=0.1197 S2-=0.0439
S3*=0.0580 S3-=0.0920
S4*=0.1009 S4-=0.0458
Relative closeness to ideal solution
Step 6: Determine the relative closeness to the ideal solution for each
alternatives

Ci*= Si-/(Si*+Si-)

C1*=0.643
C2*=0.268
C3*=0.613
C4*=0.312

(**Closeness rating is a number between 0 and 1 with 0 being the

worst possible and 1 the best possible)
Ranking
Step 7: Determine the preference order by arranging the alternatives
in descending order

A1 , A3, A4, A2
 SIMPLE ADDITIVE WEIGHTING (SAW)
Step 1: Obtain the decision matrix after using numerical scale for
intangibles.

Criteria X1 X2 X3 X4 X5 X6
Projects
A1 2.0 1500 20000 5.5 5 9

A2 2.5 2700 18000 6.5 3 5

A3 1.8 2000 21000 4.5 7 7

A4 2.2 1800 20000 5.0 5 5

Normalized Decision Matrix
Step 2: Obtain the normalized decision matrix, R, (rij, i=1,………..m:
j=1,………n) using relationship
Rij= xij/ xij* if jth criterion is a benefit criteria
Rij= xij-/ xij if jth criterion is a cost criteria

0.80 0.56 0.95 0.82 0.71 1.00

1.00 1.00 0.86 0.69 0.43 0.56

0.72 0.74 1.00 1.00 1.00 0.78

0.88 0.67 0.95 0.90 0.71 0.36

Weighted Decision Matrix
Step 3: Using weights for the different criteria obtain the weighted
score for each alternative using normalized decision matrix.

W=( 0.20 0.10 0.10 0.10 0.2 0.3)

0.80 0.56 0.95 0.82 0.71 1.00 0.835

1.00 1.00 0.86 0.69 0.43 0.56 0.709

0.72 0.74 1.00 1.00 1.00 0.78 0.852

0.88 0.67 0.95 0.90 0.71 0.36 0.738

Ranking
Step 4: Based on the final scores rank the alternative for a decision by
the decision maker.

A3 , A1, A4, A2
 Conclusion
• Project selection involves consideration of multiple, often
conflicting criteria among the alternatives.

• Project appraisal leads to evaluations which may be tangible,

incommensurate or intangible.

• Intangible are evaluated on a numerical subjective scale.

• Different methods vary in their normalization schemes and in the

manner in which scoring of alternatives is done.