Bhole_M2 - CHAPTER 2 Strategic Management and Project...

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CHAPTER 2 Strategic Management and Project Selection
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Problems With Multiple Projects 1. Delays in one project delays others 2. Inefficient use of resources 3. Bottlenecks in resource availability
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Challenges Making sure projects closely tied to goals and strategy How to handle growing number of projects How to make projects successful
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Project Selection and Criteria of Choice Project selection… Evaluating Choosing Implementing Same process as other business decisions
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Models Models are used to select projects All models simplify reality That is, they only look at the key variables involved in a decision The more variables included in a model, the more complex it becomes Simpler models usually work better
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Types of Models Stochastic Model A model that includes the probabilities of events occurring within the model. In other words, the same inputs might yield different outputs at different runs. Also known as a probabilistic model. Deterministic Model A model that does not include probabilities. Given the same inputs, the outputs will always be the same.
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Model Criteria Realism Capability Flexibility Easy to use Inexpensive Easy to implement
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The Nature of Project Selection Models Models turn inputs into outputs Managers decide on the values for the inputs and evaluate the outputs The inputs never fully describe the situation The outputs never fully describe the expected results Models are tools Managers are the decision makers
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Types of Project Selection Models Nonnumeric models Numeric models
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This note was uploaded on 01/18/2012 for the course IND/MECH mec 713 taught by Professor Bhole during the Fall '11 term at Ryerson.

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Bhole_M2 - CHAPTER 2 Strategic Management and Project...

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