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Scenario:
You are a project manager in the marketing department for a county funded hospital. The hospital is launching an extensive public service program for cardiac health. The program will involve print ads in local newspapers, television spots, posters at local eateries and health clubs, and sponsorship of events at the county fair. You have been discussing the project with your boss, the director of marketing, Walter Jones, and you are discussing options for a local celebrity to be a key spokesperson. You are hoping to have one of the local professional basketball players because they are typically available during the summer county fair season. The goal is that the first splash of public service announcements and ads takes place in the next 90 days, in conjunction with “Heart Healthy Month.”

This is a critical project for the hospital, and you are honored (and a little nervous) to be the project manager. This project is part of a larger strategic initiative to develop community awareness of the hospital’s expertise in cardiac care and increase the hospital’s revenues over a 3-year period. The budget for the project is clearly defined and seems to be adequate. The various departments of the hospital are supportive of the project, and there is clarity and consensus around the scope and objectives of the campaign.

Unfortunately, the hospital’s project budgets are under fire for experiencing significant budget overruns within the last year on a number of projects. The hospital’s CFO has made it clear to your director that the project will need to be diligent in managing this project so that schedule and cost overruns do not occur.

You will need to build the project schedule that meets the required dates for the upcoming “Heart Healthy Month,” plus the schedule for the remaining deliverables. Good luck!

Question
As you were outlining the vendor selection activities of the project, you speak with Walter and learn about the hospital’s vendor selection process. Since you have previously worked in a private hospital, you are not very familiar with the differences in purchasing between public and private hospitals. Walter explained that you cannot use any vendors (even ones you have used in the past) without completing a lengthy bid process. A Request for Proposal (RFP) must be created and posted on the hospital’s website for at least 30 days. You must receive at least 3 quotes and you must select the vendor that provides the lowest bid. If you do not choose the lowest bid, you must document the rationale for your choice and have it approved by the department director.

Create a document that defines the activities that must be completed for the selection of all ten vendors. Define any known durations or costs. Describe your timing of the vendor selection process, relative to the project’s upcoming program kick-off. Identify your planning assumptions and document any open issues.

A local toy store is considering opening a new coffee shop. The coffee shop will occupy space next door in the same building. That space is currently being rented out to a tenant for $30,000 per year. The project will require an upfront investment of $200,000 today in order to pay for remodeling the space and the new equipment. Assume that all of this investment is expected to last for 3 years (the life of the project), and will be depreciated using MACRS over a three-year class life. Three-year class life MACRS implies depreciation percentages of 33%, 45%, 15%, and 7% over years one through four, respectively. At the end of the three years, the store believes it can sell the equipment for $10,000. The store expects the new coffee shop to generate sales revenue from the project of $200,000 per year, with expenses (other than depreciation and taxes) of $40,000 per year. The project will require an investment in net working capital of 10% of sales, to be in place at the beginning of each year (i.e., working capital in year t is based on sales in year t+1). Assume a marginal tax rate of 30%. What are the total incremental after-tax cash flows associated with the project? Clearly label your cash flows – inflows as positive and outflows as negative.

1. Project Management differs from traditional functional managers largely because:
a. projects are unique, one-time events
b. project have a clear definable end
c. projects have more relaxed specifications than typical operations.
d. both a and b
e. all of the above

2. The work breakdown structure (WBS/OBS) is developed primarily to:
a. clarify deliverables.
b. develop a project cost estimate.
c. assign organization units responsibility for completing work.
d. both a and b
e all of the above

3. The intersection of work packages and the organizational unit creates a(n):
a. cost account
b. OBS
c. project deliverable
d. project budget

4. Project cost estimates:
a. generally consist of direct costs, project overhead costs, and general overhead costs
b. can be estimated most reliably by asking those responsible for the work to develop the estimates.
c. may use ratio methods as a starting point
d. are integrated with time estimates to create the project budget
e. both a and c
f. all the above

5. In network analysis, the results of the backward pass indicate:
a. the project duration
b. the accuracy of the forward pass
c. the latest time each activity can be finished
d. the “crash” time for each activity.

6. In risk management, the term “tigger” is used to denote an event that would:
a. cause the project manager to shut down a project.
b. cause the project manager to transer a risk to another department.
c. cause the manager to initiate a contingency plan.
d. lead to a delay in the project.

7. A risk assessment matrix evaluates:
a. the chance a risk will materialize.
b. the severity of the risks involved.
c. detection difficulty.
d. when the risk might occur.
e. both a and b.
f. all of the above.

8. The ________ controls, records, and reports variations that affect the accuracy of the original baseline.
a. change control system
b. network plan
c. WBS
d. risk assessment matrix

9. “Crashing” the times of activities in a project:
a. is most accurately and effectively determined using computer solutions.
b. should be done as early as possible in the project.
c. is most suitable for sensitive networks
d. can result in significant cost savings for insensitive networks.

10. Generally, the best scheduling rule for a resource-constrained project is;
a. smallest duration task first.
b. minimum slack first.
c. activity requiring the most resources first.
d. smallest activity number first.

1. Outsourcing project work can be used to:
a. reduce project slippage.
b. improve the utilization of critical resources.
c. avoid resource bottlenecks.
d.all of the above.

2. The _____ matrix form of organization allows for flexibility in the use of resources and expertise within the firm.
a. functional
b. balanced
c. project

3. The degree to which the organization monitors and responds to changes in the external environment is termed:
a. conflict tolerance
b. management focus
c. open-systems focus
d. unit integration

4. The punctuated equilibrium model of group development emphasizes the importance of establishing deadlines and milestones.
a. true
b. false

5. A project charter:
a. is the same as a project scope statement
b. states the common goals for the project as well as the procedures that will be used to achieve those goals
c. a joint evaluation between all parties working on a project
d. a type of cost-plus contract

6. Project audits should be random to ensure that no one can predict when the audit will occur.
a. true
b. false

7. Research indicates that the most significant barrier to project success involves:
a. scheduling
b. organizing
c. controlling
d. project definition

8. Most cross-cultural experts would identify the dominant acitivy orientation for Americans as:
a. harmony
b. being
c. doing.
d. controlling.

In your educated opinion:

1. Recommend leadership behaviors required to keep momentum alive during the implementation of a new project
2. Evaluate the elements an organizations culture and explain how they may influence successful implementation.
3. Develop a strategy to deal effectively with organizational culture issues to ensure success of the plan.
4. Recommend post-implementation management practices necessary for the projects continued success.