IIMT3603 PROJECT MANAGEMENT Homework 3 Sample Solution(Due – November 24, 2016, 11:55 PM)Electronic Submission (Moodle Course Web page)(i) MS Word(ii) File name: IIMT3603_hw3_HKUID (e.g. IIMT3603_hw3_1234567)No Late Submission.1. (40%) Sandy Point is the project manager of a small project that consists of seventasks. After careful and extensive planning, Sandy and her project staff agreedon a proposed project schedule that is indicated by the following Gann chart: Today Scheduled critical task AScheduled non-critical task BC Used but not planned DPlanned but not used EFG1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Time As indicated in their original project plan, Sandy and her staff had estimated thefollowing durations and (total) direct costs for each task:TaskABCDEFG Duration Planned(weeks)Value4$2,0007$2,8003$1,1505$ $ 6255$1,3503$1.0503$ $ 270 This morning (beginning of week 6), Sandy received a progress report; as indicatedin the Gantt chart, task C could not be started until this week due to the unexpecteddelay in completing task A. The report also indicates that task B has been completedtwo weeks earlier than expected. Information from the progress report issummarized in the following table. Homework #31 IIMT3603 PROJECT MANAGEMENTTask CurrentStatus ABCDEFG CompletedCompletedJust startedIn progressNot startedNot startedNot started ActualExpendituresto Date$2,000$2,800$0$330$0$0$0 Percent ofWorkCompleted100%100%0%55%0%0%0% a. (15%) As of today (beginning of week 6), what is the cost variance of theproject? What is the schedule variance of the project?b. (10%) Based on information provided to date, what is your assessment of thecurrent status of the project?c. (15%) If you use a fixed 30/70 formula to compute the value of the workcompleted (BCWP) instead of relying on progress reports to estimate thepercent of work completed, what is the value of the cost index for the projectat the beginning of week 6? What is the schedule index for the project? Doesthis change your view of the project progress to date?2. (20%) Discuss the effects of the various organizational forms on coordinationand interaction, both within the project team and between the team and the restof the firm.3. (40%) The Van Allen Construction Company is hoping to sign a contract in thenext few months to build a new soccer stadium where the Louisiana Superdomenow stands. Hopeful of getting this contract, managers at Van Alien havestarted planning the first phase of the project (i.e., demolition of theSuperdome).The demolition project consists of nine tasks, which are indicated in thefollowing table. Also indicated are the normal times (in weeks) and normal costs(in hundreds of dollars), as well as the crash times and crash costs. Indirectcharges (e.g., security fencing around the perimeter site) and overhead chargeswill cost approximately $12 (hundred) per week.CrashTask Predecessors Time Cost ABCDEFGHI ——BAAC,DC,DGE,G 315225411 $60$50$70$60$50$90$60$40$50 Homework #3Time Cost55107611654 $40$30$40$40$30$60$30$20$20 2 IIMT3603 PROJECT MANAGEMENTThe project manager has become aware that workers may strike during thedemolition project. If such a strike occurs, no one will cross the picket line, andthe demolition project will be stopped for the duration of the strike (overheadand indirect charges, however, will continue to accrue during the strike). To getmore information about this potential strike, the project manager has hired aconsultant who specializes in labor relations. The consultant reported that theprobability of a strike is between 60 and 80 percent. If a strike does occur, sheestimates the duration of the strike is as follows.Strike Duration (weeks) Probability 3 0.45 4 0.30 5 0.25 The consultant has also stated that if a strike should occur, it is equally likelythat the strike would start at any time during the demolition project, and thatthere would be no more than one strike during the project’s life. Given thisinformation, how should the Van Alien Company manage this risk? Shouldthe company take any preventive actions or plan some contingency actions?If so, what do you recommend?a. (10%) The management consultant on the Van Allen project has discovered thatthe labor contract is in effect until the beginning of week 14; that is, the strikewould occur only at the beginning of week 14, if at all. Would this change yourdecisions? If so, how?b. (10%) The project manager at the Van Allen Company now thinks that thelikelihood of a strike increases as the duration of the project increases.Specifically, she estimates the probability of a strike during the course of theproject to be as follows:Probability of Strike = END/(END + 4)where END is the project duration. Would this assumption change herpreventive plans? If so, how?c. (10%) Assume that the Van Allen Company has a deadline of twenty weeks tocomplete the Superdome demolition project. In this case, the state will fine theVan Allen Company $3.5 (hundreds) for each week the demolition project isdelayed. How does this affect your recommendation (assume that theprobability of a strike is 0.70)?d. (10%) To get the demolition project completed as quickly as possible, the stateof Louisiana is considering adding an incentive clause to Van Allen’s contract.Specifically, the incentive clause would reward the company with a bonus of $5(hundreds) for each week that the project is completed before week 18. Whatwould you now recommend to Van Allen? Why? (Assume that the probabilityof a strike is constant at 0.70.)Homework #3

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