project management: TASK 2 - Developing a project A-O-N

Case study:

Leah graduated in July 2012 with a degree in business majoring in Project Management.

she accepted a job as a project coordinator for Housing New Zealand in the Building

Maintenance department. She worked on fixed cost estimates for housing projects, where the work was uncomplicated to estimate, and she worked with experienced building teams and & supportive management team which allowed

her to generate accurate quotes most of the

time, a few quotes were +/-10% on the original quote however this was an acceptable margin for maintenance quotes such as these. Leah had been promoted to a new position in Housing New Zealand to the project office. Her responsibility now was to coordinate estimates for all major projects for the company.

The project was to build low cost housing units on land owned by Housing New Zealand. The cost of the houses was estimated were estimated to be $400,000. Leah attended a kick-off meeting to approve the charter of the project, where the management team approved the budget, the overall budget of the project at $500,000 with the budget of the "product" at $400,000. This type of project has never been planned and executed before, but the management team were so confident in the estimates from information from previous projects.

Couple of senior contractors were worried about materials required to build the low cost housinf to Council Standards with the $400,000 budget. But given the excitement in the moment, everyone agreed the project was worth doing and was possible to execute. This project was to have the highest project priority within the company. Estimates were due in 2 weeks.

Leah started off by compiling estimates for the project. The corresponding cost estimates had seemed to be in error. The cost estimate was $80,000 over the management estimate; this represents about 20% over run.

The time estimate from the developed project network was only 4 months over managements time estimate. Another meeting had been scheduled with the significant stakeholders for checking the estimates and to brainstorm for alternative solutions; the cost & time estimates appeared to be reasonable, some of the suggestions for the brainstorming session has been below:

1. Change Scope

2. Outsource the building

3. Use the priority matrix to get management to clarify their priorities

4. Cancel the project

5. Commission a break-even study for the build

Very little in the way of concrete savings waa identified, even though there was a consensus that time could be compressed to the proposed dates, but at additional costs.

Questions:

a) Manually draw the project network

b) Calculate the earliest-latest starting and finishing time for each activity

c) Identify the critical path

d) List the slack of each activity

e) is this network sensitive or insensitive?

f) using the table below, create a PERT for the network then answer the following question: What is the (%) probability of the project finishing on time?

g) Briefly discuss the impact that this probability will have on the project?

for PERT:

Calculate to 2 decimal places

Due date for the project is 52 Weeks

Activity Preceding Activity Time (Weeks) A B A 5 C A 5 D C 2 E, A 10 F B.E 6 G F 3 H G 4 I D,E J II K H.J L K M I N M O H.N P Q R lo L.P Q 3 10 2 9 3 2 9 7 5 Activity Optimistic Most Likely Pessimistic A 2 5 B 6 C 7 D EF G H I J K L M N 10 P |Q R WNN 2 3 1 3 4 0NWNA 2 3 2 8 1 8 1 4 1 7 5 3 4550 2 10 634 M2NO36Na 10 75 3 12 7 4 6 4 13 4 15 4 8 4 12 10 6 Activity Preceding Activity Time (Weeks) A B A 5 C A 5 D C 2 E, A 10 F B.E 6 G F 3 H G 4 I D,E J II K H.J L K M I N M O H.N P Q R lo L.P Q 3 10 2 9 3 2 9 7 5 Activity Optimistic Most Likely Pessimistic A 2 5 B 6 C 7 D EF G H I J K L M N 10 P |Q R WNN 2 3 1 3 4 0NWNA 2 3 2 8 1 8 1 4 1 7 5 3 4550 2 10 634 M2NO36Na 10 75 3 12 7 4 6 4 13 4 15 4 8 4 12 10 6