Chapter2-Project Selection

Chapter2-Project Selection - Project Management A...

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Project Management A Managerial Approach Chapter 2 Project Selection
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Project Selection Project selection is the process of evaluating  individual projects or groups of projects, and  then choosing to implement some set of them  so that the objectives of the parent organization  will be achieved Managers often use  decision-aiding models  to  extract the relevant issues of a problem from the  details in which the problem is embedded Models represent the problem’s structure and  can be useful in selecting and evaluating  projects
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Criteria for Project Selection Models (Souder) Realism  - reality of manager’s decision Capability - able to simulate different scenarios and optimize the  decision Flexibility  - provide valid results within the range of conditions Ease of Use  - reasonably convenient, easy execution, and easily  understood Cost  - Data gathering and modeling costs should be low relative to  the cost of the project Easy Computerization  - must be easy and convenient to gather,  store and manipulate data in the model
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Key issues in Project analysis Market analysis Production Factors /Technical analysis Financial analysis Economic analysis Ecological analysis Personnel factors
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Marketing Factors Size of potential market for output Probable market share of output Time until market share is acquired Impact on current product line Consumer acceptance Impact on consumer safety Estimated life of output Spin-off project possibilities
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Production factors Time until ready to install Length of disruption  during installation Learning curve-time until operating as desired. Energy requirements Safety of process Other applications of technology Changes in cost to produce a unit output
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PRODUCTION FACTORS (contd.) Change in raw material usage Availability of raw materials Impact on current suppliers Change in quality of output
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         Financial Factors Profitability Impact on cash flows Payout period In entrepreneurship, a period of time in  which  cash flow  is negative. This especially applies to an  early part of a company's history before it has recovered  start up costs and  operating expenses . Cash requirements Time until break-even Size of investment required Impact on seasonal &cyclic fluctuations
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Personnel factors Training requirements Labour skill requirements Availability of required labour skill Level of resistance from current work force Change in size of labour force Impact on working conditions
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This note was uploaded on 04/20/2010 for the course PD 103 taught by Professor Mc during the Spring '10 term at Jaypee University IT.

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Chapter2-Project Selection - Project Management A...

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