Project Management for Business - Assignment

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Project Management for Business Assignment

PMB ASSIGNMENT 2
Table of Contents
Abstract......................................................................................................................................3
Project Management for Business Assignment..........................................................................4
Introduction................................................................................................................................4
Task 1.........................................................................................................................................4
AC1.1 Background and Principles of Project Management...................................................4
AC1.2 Viability of Projects, Developing Success/Fail Criteria.............................................5
AC1.3 Principles behind Project Management Systems and Procedures...............................6
AC1.4 Key Elements Involved in Terminating Projects and Post Project Appraisals...........7
Task 2.........................................................................................................................................8
AC2.1 Organisational Structure, Roles and Responsibilities of Participants.........................8
AC2.2 Control and Coordinate a Project................................................................................9
AC2.3 Project Leadership Requirements and Qualities.......................................................10
AC2.4 Human Resources and Requirements for a Project...................................................11
Task 3.......................................................................................................................................12
AC3.1 Project Plans and the Project Organisation...............................................................12
AC3.2 Project Scheduling, Estimating and Cost Control Techniques.................................15
AC3.3 Methods Used to Measure Project Performance.......................................................16
AC3.4 Project Change Control Procedures..........................................................................17
Conclusion................................................................................................................................18
References................................................................................................................................20

PMB ASSIGNMENT 3
Abstract
Project management becomes increasingly popular management knowledge required
by companies to increase own value through innovative developments and new business
lines. The paper examines practical implementation of project management theory to a
scenario of a construction project. The work consists of introduction, three main tasks and
conclusion. Introduction provides a general background of the scenario. The first task is
devoted to evaluation of the most attractive project to implement under the scenario, practical
application of project management principles and system, and importance of the project
completion evaluation. The second task describes the company’s organizational structure,
main positions and their roles needed to implement the project, techniques to control the
project and responsibility assignment matrix. The third task provides Gantt chart, network
diagram and PERT matrix as applied to the project and discusses the method of performance
measurement and project change control procedures. The main findings and learning
outcomes of the paper are summarized in the conclusion part.
Keywords: project management, responsibility assignment matrix, Gantt chart,
network diagram, PERT, construction projects

PMB ASSIGNMENT 4
Project Management for Business Assignment
Introduction
The paper analyses choice and planning process of the construction project to be
implemented by A2Z Construction in order to extend its office facilities. The company has to
choose between extending the current four story building to a five story building or buying
and renovating an additional small office building space nearby. The project implementation
is analysed with application of responsibility assignment matrix, Gantt chart, network
diagram, and PERT matrix. Upon completion of the paper, it is possible to introduce the
chosen project in terms of human resources needed, main processes and milestones required
for completion, applicable control, and evaluation techniques as well as the project change
procedures.
Task 1
AC1.1 Background and Principles of Project Management
M3 Project management becomes continuously important in establishing sustainable
competitive advantage of any company in modern highly competitive and concentrated world
with scarce financial, material and human resources. It allows proper and most effective
alignment of available resources along with achievement of new profitability levels. The
main principles of project management include: establishing the project’s goals that are
unique and one-time for the company and add value to the business; setting schedule,
standards and measures for its completion; determining the project’s start and end dates;
allocating resources to the project; focusing on customer or internal company’s needs; and
budget limitation (Newton, 2015).
In context of the assignment’s scenario, the company needs to manage a construction
project in order to increase its own facilities. Respectively, both project 1 and 2 when
implemented are focused on the internal company’s needs. At the same time, increasing the

PMB ASSIGNMENT 5
office space of the company will also add value in terms of customer relationships as more
personnel than could be hired and more customers get satisfied with timely and quality
solution for their requests. Naturally, building another floor or a new building nearby is a
one-time project that serves the man goal to enhance capacity of the company. The chosen
construction project will have the dates of starting construction, ending the works and
specific schedule and milestones to control the completion stages. The company will allocate
separate financial budget to fund the construction works as well as assign personnel and other
resources apart from the main business and other conducted projects. The budget of the
selected project also should not be higher than expected benefits from the room space
extension for the company.
AC1.2 Viability of Projects, Developing Success/Fail Criteria
D1 In order to determine viability of the projects, one needs to construct their
projected cash flows and find net present value discounted at the applicable rate. Net present
value is determined as the discounted value of future cash flows less than the initial
investment on a project (Warren, Reeve, & Duchac, 2014). The discounting rate is usually the
minimum required rate of return on similar company’s investments.
The project 1 cash flows in the scenario are the following:
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
$(400,000) $110,000 $110,000 $110,000 $150,000 $150,000 $150,000
The project 2 cash flows in the scenario are presented below:
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
$(500,000) $110,000 $110,000 $110,000 $150,000 $150,000 $150,000

PMB ASSIGNMENT 6
Table 1Payback period
Project A Project B
Initial
investment -400000 -500000
1 110000 -290000 110000 -390000
2 110000 -180000 110000 -280000
3 110000 -70000 110000 -170000
4 150000 80000 150000 -20000
5 150000 230000 150000 130000
6 150000 380000 150000 280000
Table 2Calculation of NPV
Project A Pv @ 4% Present value Project B PV @ 4% Present value
Initial
investment 400000 500000
1 110000 0.962 105769 110000 0.962 105769.23
2 110000 0.925 101701 110000 0.925 101701.18
3 110000 0.889 97790 110000 0.889 97789.60
4 150000 0.855 128221 150000 0.855 128220.63
5 150000 0.822 123289 150000 0.822 123289.07
6 150000 0.790 118547 150000 0.790 118547.18
Total 675317 675317
NPV 275317 175316.89
Interpretation
Payback period reflect the duration in which investment made on project is recovered.
Pay back for project A is 3 year and same for other project is 4 years. Hence, it can be said
that project is viable then project B. NPV of project A is higher than B and it can be said that
former project is more profitable to the business firm.
Net present value rule states that a project can be accepted if it has positive net present
value. Besides, between two mutually exclusive projects, one should choose the one with the
highest net present value as it will provide more cash inflows valued in today’s money
(Brigham & Ehrhardt, 2014). At the same time, it is better to choose a project with the
shortest payback period as projections of cash flows for closer periods are naturally more