Exam - 240304

Project Budgeting, Progress Monitoring, and Benefits Realization (LO5)

Crashing a Project

• Identify the critical path.
• Shorten activities on the critical path with the lowest crashing cost, one day at a time, as long as they haven't reached their shortest possible duration.
• If two activities have the same crashing costs, crash the earlier one.
• Cross-check that the critical path has not changed and identify new ones if they have.
• Stop when the desired reduction in project duration is achieved.

Crashing Diagram

• Depicts the accumulated costs of incremental project schedule reductions.
• X-axis: Project duration in days.
• Y-axis: Total project costs.
• Managers can use it to discuss the optimal degree of crashing, balancing duration reduction with cost. Pay attention to the knee points of the curve.

Earned Value Analysis (EVA)

• Schedule Variance (SV): SV = EV - PV
• Cost Variance (CV): CV = EV - AC
• Schedule Performance Indicator (SPI): SPI = \frac{EV}{PV}
• Cost Performance Indicator (CPI): CPI = \frac{EV}{AC}
• Estimated Final Budget: AC + \frac{(Original\ Budget - EV)}{CPI}

Payback Method

• Payback Period: \frac{Total\ Investment}{Annual\ Net\ Cash\ Flow}
• Prioritize projects with shorter payback periods.

Contribution Costing Method

• A non-complete cost allocation method where only specific revenues are allocated to the cost units.
• The contribution margin covers the company’s common costs (not directly attributable to the project).

Project Manager Tasks and Responsibilities (LO8)

Communication Plan

• Important for project management.
• Identify target groups (internal and external stakeholders), communication purpose, content, timing, method, and responsibility.

Hersey's Leadership Styles

• Telling: Provide clear instructions and direction.
• Selling: Explain decisions, clarify, and convince team members.
• Participating: Involve team members in decision-making.
• Delegating: Give responsibility to competent team members.

Conflict Types

• Functional Conflict: Concerns solutions and goals; can lead to better performance.
• Dysfunctional Conflict: Can be managed using strategies like monitoring, mediating, arbitrating, controlling, accepting, or eliminating.

Conflict Resolution Strategies

• Monitoring: Ensure parties resolve the conflict themselves.
• Mediating: Find common ground and suggest alternatives.
• Arbitrating: Make an authoritarian decision.
• Controlling: Rearrange the team or adjourn the interaction.
• Accepting: Accept the conflict.
• Eliminating: Remove individuals causing the conflict.

Group Development Models

• Tuckman's Model: Forming, Storming, Norming, Performing, Adjourning.
• Wheelan's Model: Affiliation & Security, Opposition & Conflict, Trust & Structure, Work & Productivity.

Project Manager Skills

• Systems thinker
• Personal integrity
• Proactive
• High emotional intelligence (EQ)
• General business perspective
• Effective time management
• Skilful politician
• Optimist