Q1. Describe the project planning process and explain it in detail.

Answer:- Project Planning Process

Project planning involves three processes.
The identification process
The main steps in the identification process of any project are:
Identifying initial requirements. For example, when a company identifiesa
need for a new or improved product due to R & D results or a consumer survey,
the management of that company will acknowledge the necessity of improving
the existing product in accordance with the consumers demands.
Validating them against the project objective.
Identifying the criteria such as quality objectives and quantitative
requirements for assessing the success of both the final product and the process
used to create it.
Identifying the framework of the solution.
Preparing a template of the framework of solution to illustrate the project
feasibility.
Preparing relevant charts to demonstrate the techniques of executing the
project and its different stages.
Preparing a proper project schema of achieving the defined business
requirements for the project.
Identifying training requirement.
Making a list of the training programme necessary for the personnel working
on the project.
Identifying the training needs of the individuals working in various functions
responsible in the project.
Preparing a training plan and a training calendar.
Assessing the capabilities and skills of all those identified as part of the
project organisation.
The review process
The main steps in the review process of any project are:
Instituting a training plan to explain the project team members with the
methodologies, technologies and business areas under study.
Updating the project schedule to accommodate scheduled training activities
Identifying the needs for review and reviewing the project scope

Re-evaluating a project with respect to its stages and progress by organising

a plan for the review, fixing an agenda to review the project progress and
maintaining the reports ready for discussion about stage performance
Reviewing the project scope, the objective statement, and the
nonconformances in the project stages and identifying the need to use the
project plan
Preparing a proper project plan indicating all the requirements from start to
finish of the project and also at every stage of the project
Preparing a checklist of items to be monitored and controlled during the
course of execution of the project
The analysis process
The main steps in the analysis process of any project are:
Comparing the actual details with that in the plan with reference to project
stages
Measuring various components of the project and its stages frequently to
control the project from deviating and also monitor the performance
Deciding how the task, the effort, and the defects are to be tracked; what tools
to be used; and what reporting structure and frequency will be followed at various
stages
Identifying the preventive and corrective steps to be taken in case of any
variance
Performing root cause analysis for all problems encountered.

Q2.
a. Explain the life cycle of a project
Answer:- Project cycle: A collection of generally sequential project phases
whose description and order of occurrence are determined by the control needs
of the organisation or organisations involved in the project.
The Project Life Cycle
A rational order of activities that are applied to attain the projects goals or
objectives is known as the project life cycle. Most projects experience similar
stages on the path from origin to completion.
Start-up phase: The project is started and a manager is chosen, the project
team and primary resources are assembled, and the work program is organised.
Quick Momentum: Progressively, the work gains momentum. This continues
until the end is near.
Finish (Slow): Completing the final tasks take some extra amount of time, partly
since there are often a number of parts that must come together and partly
because team members drag their feet for different reasons and avoid the final
steps.
The pattern of slow progress towards the project goal is common. If we consider
the construction of a house or building, this phenomenon can be observed. For
the most part, it is a consequence of the changing levels of resources utilised
throughout the successive stages of the life cycle. Least effort is necessary at the
beginning, when the project is conceptualised and subjected to project selection
processes. If this obstacle is passed, activity increases as planning is completed
and the real work of the project gets in progress. This rises to a peak and
afterwards begins to taper off as the project nears fulfillment, at last ceasing
when assessment is complete and the project is finished. However, the rise and
fall of effort usually occurs, there is no definite pattern that is suitable to all
projects, nor any reason for the slowdown at the concluding stage of the project
to look like the build-up at its beginning.
The ubiquitous goals of meeting performance, time, and cost are the major
considerations throughout the project's life cycle. It was generally thought that
performance took precedence early in the project's life cycle. This is the time
when planners focus on finding the specific methods required for meeting the
project's performance goals
Early in the life cycle, performance took priority over schedule and cost.
During the periods of high activity cost was thought to be of prime importance,
and then schedule became paramount during the final stages,
when the client demanded delivery.

b. Describe the need for feasibility studies

Answer:- Feasibility analysis is the first stage in the process of project

development.
A feasibility study focuses on the practicality of an idea by identifying possible
problems and gives the answer of one main question:
The purpose of the analysis is to examine the desirability of investing in
preinvestment studies. For this purpose, it is essential to examine the project
idea in the light of the available internal (inputs, resources, and outputs) and
external constraints (environment).
Need for feasibility studies
A company is incorporated for the purpose of setting up a project. The promoters
obviously have to start with some broad idea about the proposed industrial
activity. They make mental picture as to how the idea, when translated into
reality, would result in a profitable project, given the demandsupply pattern,
probable cost of production, etc. It is quite likely that the originators get attracted
by the favourable aspects of the project known to them. It is possible that they
may have overlooked the dark side of the picture, which can only be revealed by
a detailed objective study. Too many projects have floundered at considerable
loss to the investors and indeed to the national economy through waste of scarce
resources, because the investment decisions were taken without objective and
in-depth technoeconomic feasibility studies.
In modern times, business operations are complex, requiring carefully prepared
plans. The shareholders, creditors, term leaders, etc insist on completing the
analysis of the scheme. Without their co-operation, it would not be possible to
translate the idea into action. This feasibility study helps the promoter to make
the investment decisions correctly and to obtain funds without many difficulties.
The chief objectives of conducting pre-feasibility study are to determine whether
the project is promising or not and whether an investment decision can be taken
on the basis of the information furnished at the pre-feasibility stage.
Project feasibility study comprises of market analysis, technical analysis, financial
analysis, and social profitability analysis.
Complements of feasibility study
Project feasibility study comprises of market analysis, technical analysis, financial
analysis, and social profitability analysis. The analysis is mainly interested only in
the commercial profitability and thus, examining only the market, technical, and
financial aspects of the project. But, generally the gamut of feasibility of a project
covers the following areas:
Commercial and economic feasibility
Technical feasibility
Financial feasibility
Managerial feasibility
Social feasibility or acceptability

Q3. Describe the CPM model. Explain network cost system

Answer:- CPM Model
For projects considered uncertain, the PERT model was developed and for projects which
are comparatively risk-free the CPM model was developed. Both the approaches start
with the development of the network and a focal on the critical path. Tthe PERT
approach is 'probabilistic' while the CPM approach is 'deterministic'. This does not,
however, mean that in CPM analysis we work with single time estimates. Actually the
main focus of CPM analysis is on variations in activity times as a consequence of
changes in resource assignments. These variations are planned plus related to resource
assignments as well as are not caused by random factors outside the control of
management as in the case of PERT analysis. The major focus of CPM analysis is on time
cost relationships and it seeks a project schedule that minimises total cost.
Assumptions
The usual assumptions underlying CPM analysis are:
1. The costs associated with a project can be divided into two components: direct costs
and indirect costs. Direct costs are incurred on direct material and direct labour. Indirect
costs consist of overhead items like indirect supplies, rent, insurance, managerial
services, etc.
2. Activities of the project can be expedited by crashing which involves employing more
resources.
3. Crashing reduces time but enhances direct costs because of factors like overtime
payments, extra payments, and wastage. The relationship between time and direct activity
cost can be reasonably approximated by a downward sloping straight line.
4. Indirect costs associated with the project increase linearly with project duration.
Procedure
Given the above assumptions, CPM analysis seeks to examine the consequences of
crashing on total cost (direct cost plus indirect cost). Since the behaviour of indirect
project cost is well defined, the bulk of CPM analysis is concerned with the relationship
between total direct cost and project duration. The procedure used in this respect is
generally as follows:
Step 1: Obtain the critical path in the normal network. Determine the project duration and
direct cost.
Step 2: Examine the cost time slope of activities on the critical path obtained and crash
the activity which has the least slope.
Step 3: Construct the new critical path after crashing as per step 2. Determine project
duration and cost.
Step 4: Repeat steps 2 and 3 till activities on the critical path (which may change every
time) are crashed.

Network Cost System

The techniques of PERT and CPM discussed above are essentially time oriented. They
seek to answer questions like:
what is the most desirable time schedule of activities?
How much time would it take, on an average, to complete the project?
what is the probability of completing the project in a specified time?
Such analysis largely overlooks the cost aspect which is usually as important as the time
aspect and sometimes even more. To provide a vehicle for cost planning and control of
projects, the network cost system was developed. This represents a very useful
supplement to the traditional time-oriented network analysis. Let us look at cost
projection and cost analysis and control under the network cost system.
Projected costs or budgeted costs assists in analysing variances while balancing actual
costs incurred on the project from time to time and keeps a proper check on the overall
budget. Budgeted costs also happen to be an indicator of the extent the project can be
crashed in case of emergency. Forinstance Common wealth games project for Delhi
crossed the budgeted costs by more than 40 % to meet the project deadlines in time.
When work on the project began in 2006 the mega budget was Rs. 22,000 crore. Four
years later the budget is Rs. 30,000 crore. It swell by nearly 40 per cent forcing the Delhi
government to increase taxes and roll back crucial subsidies. The budget for 11 stadia
was Rs. 1200 crore in 2004 and it rose to Rs. 5000 crore. Also, construction was way
behind the deadline. All projects were delayed, including the Commonwealth Village subproject, which had a budget of Rs. 465 crore in 2004 and got completed with Rs. 1400
crore. All this happened because of the lack of knowledge on fundamentals of networking
times and costs factors
The two fundamental network techniques are PERT and CPM. CPM is useful to projects
which are comparatively risk-free; its orientation is deterministic. Extensively varied
projects are open to analysed by PERT and CPM. The construction of network diagram is
in terms of activities and events. The activity in a project is defined as a definite task, job
or function to be performed. A definite point of time indicating the beginning or end of
one or more activities is known as event. To make sure that each activity is uniquely
numbered it is required to introduce dummy activities.
The development of project network, time estimation, determination of the critical path,
PERT model, CPM model, and network cost systemOnce a project gets selected, the
entire focus will be on its implementation. This involves the completion of numerous
activities (project components) by employing various resources men, materials,
machine, money, and time so that a project blueprint gets translated into concrete reality.
The project activities have inter-relationships occurring from physical, technical, and
other considerations. For suitable planning, scheduling, and control of the activities of a
project, given their inter-relationships and constraints regarding the availability of
resources, network techniques are found very useful. Note that financial institutions and
the Government of India insist that a network plan must accompany feasibility reports.
The two fundamental network techniques are: PERT and CPM. CPM, a short form for
Critical Path Method, is similar to PERT. It was developed in US by the DuPont
Company in 1956-57 for solving industries scheduling problems. CPM is principally
concerned with the matter involving cost and time. Its application is mainly to projects
that use a fairly stable technology and are quite risk free. Therefore, its orientation is
'deterministic'. Extensively diverse projects are open to analysis by PERT and CPM, for
example launching a spaceship, research and development programme, construction of a
plant, building a river valley project, overhaul of an organisation, training of manpower,
starting a new venture, and adult literacy programme.

Q4. Explain the project cost estimate and budgets.

Answer - Project Cost Estimate and Budgets
Budgeted costs of project activities are prepared by estimating scheduled activities and
the relative costs of the resources needed to complete each activity. In this process, the
project manager considers the possible causes of variation in the cost estimates including
associated risks. Cost estimating is the process of identifying and considering different
costing alternatives. For example, additional work during a design phase may hold the
possibility for reducing the cost of the execution phase and product operations. In cost
estimating process we consider whether the expected savings can offset the cost of the
additional design work.
Cost estimates are expressed in currency units (Rupees, Dollars) to facilitate comparisons
both within and across projects. Often in Indian projects, the estimator uses man hours or
man-days to measure cost factors and facilitate appropriate management control.Cost
estimates can help to refine the course of the project to reflect the additional details. The
accuracy of a project approximation will increase as the project progresses through the
project life cycle. The costs for schedule activities are estimated for all resources which
charged to the project. This comprises, but is not limited to, labor, materials, equipment,
services, and facilities, with special categories such as an inflation allowance or a
contingency cost. A schedule activity cost estimate is a quantitative evaluation of the
expected costs of the resources required to complete the scheduled activity. If the
performing organisations do not have formally trained project cost estimators, then the
project team will require supplying both the resources and the knowledge to perform
project cost estimating activities
Cost estimating: inputs
Enterprise Environmental Factors
The cost estimating process considers:
Marketplace conditions Type of products, services, and results that are available in
the marketplace, and associated terms and conditions of their availability.
Commercial databases Resource cost rate information is often available from
commercial databases that track skills and human resource costs and provide standard
costs for material and equipment. Published seller price lists are another source.
Organisational process assets In developing the cost management plan existing
formal and informal cost estimating-related policies, procedures, and guidelines are
considered, in which cost estimating tools, examining and reporting methods are used.
Cost estimating policies a number of organisations have predefined approaches to
cost estimating. Where these exist, the project operates within the boundaries defined by
these policies.
Cost estimating templates several organisations have developed templates (or a pro
forma standard) for the use of the project team. The organisation can constantly improve
the template based on its application and usefulness in prior projects.
Historical information Information that pertains to the projects product or service
which is obtained from various sources within the
organisation can influence the cost of the project.
Project files One or more of the organisations involved in the project will maintain
records of previous project performance that are detailed enough to aid in developing cost
estimates. In some application areas, individual team members may maintain such
records.

 Project team knowledge embers of the project team may recall previous actual
costs or cost estimates. While such recollections can be useful, they are generally far less
reliable than documented performance.
Lessons learned essons learned could include cost estimates obtained from previous
projects that are similar in scope and size.
Cost estimating: tools and techniques
Analogous estimating
Analogous cost estimating implies using the actual cost of previous, similar projects as
the basis for estimating the cost of the current project. Analogous cost estimating is
frequently used to estimate costs when there is a limited amount of detailed information
about the project
Determine resource cost rates
The person determining the rates or the group preparing the estimates must know the unit
cost rates such as staff cost per hour and bulk material cost per cubic yard for each
resource to estimate schedule activity costs. Gathering quotes is one method of obtaining
rates.
Bottom-up estimating
This technique involves estimating the cost of individual work packages or individual
schedule activities with the lowest level of detail. This detailed cost is then summarised
or rolled up higher for reporting and tracking purposes. The cost and accuracy of
bottom-up cost estimating is typically motivated by the size and complexity of the
individual schedule activity or work package.
Parametric estimating
It is a technique that makes use of a statistical relationship between historical data and
other variables to compute a cost estimate for a schedule activity resource.
Project management software
This includes cost estimating software applications, computerized spreadsheets, and
simulation and statistical tools, that are extensively used to assist with cost estimating.
Cost of quality
Cost of quality can also be used to prepare the schedule activity cost estimate.
Cost estimating: outputs
Activity cost estimates
An activity cost estimate is a quantitative assessment of the likely costs of the resources
required to complete schedule activities. This type of estimate can be presented in
summary form or in detail. Costs are estimated for all resources that are applied to the
activity cost estimate. This includes, but is not limited to, labour, materials, equipment,
services, facilities, information technology, and special categories such as an inflation
allowance or cost contingency reserve.
Activity cost estimate supporting detail
The amount and type of additional details supporting the schedule activity cost estimate
vary by application area. Regardless of the level of detail, the supporting documentation
should provide a clear, professional, and complete picture by which the cost estimate was
derived.
Requested changes
The cost estimating process may generate requested changes that may affect the cost
management plan, activity resource requirements, and other components of the project
management plan. Requested changes are processed for review and disposition through
the integrated change control process.
Cost management plan (updates)
If approved change requests result from the cost estimating process, then the cost
management plan component of the project management plan is updated if those
approved changes impact the management of costs.

Q5.
a. Discuss the relationship between project manager and line manager
Answer The Project Manager (PM)
A project manager is a qualified person in the field of project management. She/He is the
person who manages the four basic elements of a project: resources, time, money, and
most importantly, scope. All these elements are interrelated and each must be managed
effectively.
Other responsibilities of the project manager include:
Budgeting and cost control
Scheduling tasks
Allocating resources
Tracking project expenditures
Ensuring technical quality
Managing relations with the customer and company
The life cycle of a project manager overlaps with the development life cycle because
duties of a project manager start before the development and continue even after the
delivery of the product
Relationship between Project Manager and Line Manager
Generally, an organisation is divided into various divisions. They are:
Production division
Marketing division
Finance division
Human resource management
Material management
Line organisation is the oldest and simplest type of organisation. Here, the line of
command is fulfilled from top to bottom. This is why it is called line
organisation.
The line organisation represents a direct vertical structure through which authority flows.
Line managers have the primary responsibility of accomplishing the target goals of the
organisation. They have complete decision-making authority. Line organisation is best
suited where the work is of repetitive type and relationships between departments, and
within the department, are relatively stable. In line organisation, the communication
channels are very well defined.
Line organisation has the following advantages:
Easy to implement and less complicated.
Flexibility to expand and easy to cut back.
Clear division of responsibility and authority.
Clear channel of communication.

 Fast decision making and swift action.

Better discipline.
Better in-house training.
Cost effective.
Less confusion.
Even with all its advantages, the line management is not conducive for project
management. The matrix organisation is very much conducive for project management.
In large organisations where the capital expenses are a major part in the annual outlay of
the company, it is advisable to have an in-house project manager for assuring the quality
of work and timely culmination of the projects. In such cases, the project management
should be of line type in which the project manager should bear the full line authority and
has total control over the departments he or she heads.
b.

What are the strategies used to reduce risk?.

Answer -Reducing Risks

To make the most of the benefits of project risk management, we must integrate the
project risk management activities into well planned project management plan and work
activities. Once risks have been identified and measured, the strategies to control the risk
fall into one or more of these four categories:
Risk avoidance: It includes not performing an activity that could carry risk. For
example, not buying a property or business to avoid the liability attached to it or not
flying an airplane to avoid the risk of a crash. Avoiding activities may seem to a very easy
way of dealing with risks, but it also means losing out on the potential gain that
performing the activities with risk may have allowed. For example, not entering a
business to avoid the risk of loss also ends the possibility of earning profits.
Risk reduction: It involves methods that reduce the severity of loss from occurring.
For example, sprinklers are designed to put out a fire to reduce the risk of loss by fire.
This method may cause a greater loss by water damage and therefore may not be suitable.
Halon fire suppression systems may mitigate that risk, but the cost may be prohibitive as
a strategy.
Risk retention: It involves accepting the loss as when it arises. True self insurance is
an example. Risk retention is a feasible strategy for small risks where the cost of insuring
against the risk is likely to be higher over time than the total losses sustained. Risks
which are not avoided or transferred are retained by default. This comprises risks that are
so disastrous that they either cannot be insured against or the premiums would not be
feasible. For example, during a war, most property was not insured against war, so the
loss caused by war is retained by the insured. Also any amount of potential loss (risk)
over the amount insured is retained risk. This can be accepted if there is a small chance of
a very large loss or if the cost to insure for higher coverage amounts is so high it would
hamper the goals of the organisation.
Risk transfer: It means causing another party to accept the risk, usually by means of
contract or by hedging. An example of a risk that uses contracts is insurance. In other
cases, it may involve contract language that transfers a risk to the other party without the
payment of an insurance premium. Very often, the liability among construction or other
contractors is transferred this way. On the other hand, taking offsetting positions in
derivatives is normally how firms use hedging to financially manage risk.
Steps in Risk Management
In risk management, the following steps should be considered for effective risk
management:

Step 1 Recognition of assets at risk: The foremost step in the risk management
technique is to carefully identify the assets which might generate risks in project
operations. These assets may fall under various groups, such as tangible and intangible
assets, movable and immovable assets etc.
Step 2 Valuation of assets: The assets identified and grouped in the previous step are
to be valued and categorised into different classes such as critical and essential.
Step 3 Identifying the intimidation: Threats can be distinct as anything that
contributes to the intermission or devastation of any service/product. Various
compulsions can be grouped into environmental, internal, and external threats.
Step 4 Risk consideration: The process of risk appraisal includes not only assessment
as to the provability of occurrence but also the assessment as to the impending severity of
loss, if risk materialises. This will support in determining the appropriate risk lessening
strategy, the residual risk, and the investment required to alleviate the risk.
Step 5 Emergent strategies for risk management: After risks identification and
assessment, one must apply various risk management techniques such as risk avoidance,
risk reduction, risk retention and risk transfer etc.

Q6. Discuss the concept of quality and project quality management.

Answer- concept of quality
Quality can be referred to as a state in which value entitlement is realized for the
customer and supplier in every aspect of the business relationship.
'Value' represents the economic worth, practical utility and availability for customer and
the company that creates the product or service. This definition acknowledges the fact
that the quality of products or services rarely comprises a single element. 'Value
entitlement' means:
For

the customer: a fair level of expectation to buy high-quality products at the

lowest possible cost.
For

the provider: a fair level of expectation to create quality products at the highest
possible profits.
The philosophical leaders of the quality movement, notably Phillip Crosby,
W. Edward Deming and Joseph S. Juran provide different perceptions to the concept of
quality. It is because they use different frameworks for defining quality.
The Shewhart Cycle
PDCA (plandocheckact) is an iterative four-step management method used by the
companies to control and continually improve their processes and products. PDCA is also
referred to as the Deming circle/cycle/wheel,
Shewhart cycle, control circle/cycle, or plando studyact (PDSA).
(i) Plan: Establish the objectives and processes essential to deliver results in agreement
with the expected output (the target or goals). With the establishment of output
expectations, the completeness and correctness of the specification also becomes a part of
the targeted improvement. When possible start on a small scale to test likely effects.
(ii) Do: Execute the plan, implement the process, and make the product. Collect data to
be used in the charting and analysis in the following "CHECK" and "ACT" steps.
(iii) Check: Study the results achieved (measured and collected in the above step) and
compare against the expected results (targets or goals from the "PLAN") to find out any
mismatch between the two. Look fordeviation in implementation from the plan and also
look for the appropriateness/ completeness of the plan to allow the execution i.e. 'Do'.
Charting data can make this much easier to see trends over several PDCA cycles and to
convert the collected data into meaningful information. Information is what you need for
the next step "ACT".
(iv) Act: Request corrective actions on considerable differences between actual and
expected results. Analyse the differences to find out their root causes. Determine the
areas where changes could be applied to improve the process or product. If completion of
these four steps does not show any need for improvement, then the scope to which PDCA
is applied may be fine-tuned to plan and improve with more detail in the subsequent
iteration of the cycle, or attention needs to be put in a different stage of the process.
Project quality management
Project quality management begins by defining the quality standards to be used for the
project. This definition will come from the stakeholders, beneficiaries, and often from the

overall standards for the organisation. Careful identification of the quality standards will
help to ensure a successful project outcome that will be accepted by the stakeholders. In
addition to quality standards for the end result of the project, there may also be
organisational quality standards that must be met for the actual management of the
project, such as certain types of reporting or project tracking methods. It describes the
processes required to ensure that the project will satisfy the needs for which it was
undertaken. The knowledge area of project quality management includes the
organisational processes that determine the quality policies, objectives, and
responsibilities. It consists of quality planning, quality assurance, and quality control.
Project quality management process
1)quality management
Inputs to quality planning
Quality

policy.
Scope

statement
Product

description
Standards

and regulations
2) Quality assurance
Inputs to quality assurance
Results of quality control measurements:
3) Quality control
Inputs to quality control
Work

results
Tools and techniques for quality control
Inspection

Control

charts
Pareto

diagrams
Statistical

sampling
Flowcharting

Trend

analysis
,