C

Exam - 230227

Question 1

  • Critical Path Identification:
    • CP = A-B-C-E-G-I = 26 days
  • Crashing Procedure:
    • Shorten activities on the critical path with the lowest crashing cost per day, prioritizing earlier activities in case of identical costs.
  • Crashing Steps and Costs:
    • C(2) - 1000 SEK (2 * 500)
    • A(1) - 1000 SEK
    • G(1) - 1000 SEK
    • E(1) - 1500 SEK
  • Total Crashing Costs:
    • 4500 SEK
  • Crashing Diagram Shape:
    • The curve typically steepens as it approaches the minimum project duration due to increasing crashing costs.
  • Managerial Use:
    • Facilitates discussion on optimal crashing, focusing on 'knee points' to balance duration reduction and cost.

Question 2

  • EVA Calculations (End of Day 4):
    • PV = 1600 €
    • EV = 1200 €
    • AC = 1600 €
    • CPI = EV/AC = 0.75
    • SPI = EV/PV = 0.75
  • Budget Estimation:
    • Scenario 1 (Less Realistic): Total project costs = AC + (Original budget - EV)/CPI = 3467 €
    • Scenario 2 (More Realistic): Total project costs = AC + (Original budget - EV)/1 = 3000 €
  • SPI vs. CPM:
    • SPI indicates delays (0.75 < 1).
    • CPM shows the project is on schedule due to float in Activity B.
    • EVA doesn't differentiate between critical and non-critical activities.
  • Analytical Note to Sponsor (Scenario 2):
    • Schedule deviation on non-critical activity, cost overrun due to one-off event.
    • Forecast: Project duration = 7 days, Total project costs = 3000 €.

Question 3

  • Payback Period Calculation:
    • Payback Period = Total Investment / Annual Net Cash Flow
  • Project 1:
    • Total Investment = 20 MSEK + 6 MSEK = 26 MSEK
    • Annual Net Cash Flow = 10 MSEK - 2 MSEK - 4 MSEK = 4 MSEK
    • Payback Period = 26/4 = 6.5 years
  • Project 2:
    • Total Investment = 40 MSEK + 5 MSEK + 10 MSEK = 55 MSEK
    • Annual Net Cash Flow = 10 MSEK
    • Payback Period = 55/10 = 5.5 years
  • Prioritization:
    • Prioritize Project 2 for investment due to shorter payback period (5.5 < 6.5).

Question 4

  • Top-Down Approach:
    • Relies on past experience.
    • Suitable when 100% accuracy is not essential.
  • Bottom-Up Approach:
    • Requires time and resource investment early on.
    • Demands cooperation from key participants.
  • Instrumental Approach to Benefits Management:
    • Rational perspective on benefits management.
    • Sequential process by project/organization.
    • Emphasizes measurability, evaluation process, organizational change, and performance.
    • Assumes proper implementation leads to reaping benefits.
    • Does not account for social and political dimensions.