Chapter 3 Economics of Production

Chapter 3 Economics of Production - Chapter 3 Economics of...

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Unformatted text preview: Chapter 3 Economics of Production • The management of projects involves 3 phases: o Planning- Includes goal setting, defining the project, and team organization. o Scheduling- Relates people, money, and supplies to specific activities and relates activities to each other. o Controlling- The firm monitors resources, costs, quality, and budgets. It also revises or changes plans and shifts resources to meet time and cost demands. • Project Organization- An organization formed to ensure that programs (projects) receive the proper management and attention. • The project organization works best when: o Work can be defined with a specific goal and deadline. o The job is unique or somewhat unfamiliar to the existing organization. o The work contains complex interrelated tasks requiring specialized skills. o The project is temporary but critical to the organization. o The project cuts across organizational lines. • Project managers receive high visibility in a firm and are responsible for making sure that: o All necessary activities are finished in proper sequence and on time. o The project comes in within the budget o The project meets its quality goals o The people assigned to the project receive the motivation, direction, and information needed to do their jobs. • Major problems in projects large and small are: o Bid rigging- giving away confidential information to some bidders to give them an unfair advantage. o “Lowballing”- contractors who try to “buy” the project by bidding low with the hope of recovering costs later by contract renegotiations or by simply cutting corners. o Bribery- Particularly on international projects. o Failure to admit project failure at the close of a project. • Work breakdown structure (WBS) - Dividing a project into more and more detailed components....
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This note was uploaded on 10/22/2008 for the course ECON 321 taught by Professor Sani during the Fall '08 term at Rutgers.

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Chapter 3 Economics of Production - Chapter 3 Economics of...

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