8 briefly explain shared saving performance contract

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8. Briefly explain shared saving performance contract. Shared Savings Performance Contract is the contractor, which provides the financing and is paid an agreed fraction of actual savings as they are achieved. This payment is used to pay down the debt costs of equipment and/or services. 9. List guidelines used during implementation stage of projects? ¾ Limit long lead times ¾ Manage out-of-pocket development by focusing efforts ¾ Manage project carefully 10. List the main points that are most important to a successful project a) A project must meet customer requirements b) A project must be under budget c) A project must be on time 11. List the steps involved in CPM project planning? Steps in CPM Project Planning 1. Specify the individual activities. 2. Determine the sequence/interrelationships of those activities. 3. Draw a network diagram. 4. Estimate the completion time for each activity. 5. Identify the critical path (longest path through the network) 6. Update the CPM diagram as the project progresses. 12. What are the benefits of CPM. CPM provides the following benefits: Provides a graphical view of the project. Depicts the interrelationships among various tasks/activities Predicts the time required to complete the project. Shows which activities are critical to maintaining the schedule and which are not. 1.7 Project management - revised (table format) 53
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Question bank for Energy Managers & Energy Auditors 13. Define briefly PERT The Program Evaluation and Review Technique (PERT) is a network model that allows for randomness in activity completion times. PERT uses three time estimates-optimistic, pessimistic and most likely, which help in establishing the probability of completing a project within a specified time and take calculated risk before commencing a project. It has the potential to reduce both the time and cost required to complete a project. 14. What are the different steps involved in PERT planning? PERT planning involves the following steps: 1. Identify the specific activities and milestones. 2. Determine the interdependencies and proper sequence of the activities. 3. Construct a network diagram. 4. Estimate the time(three time estimates, if probabilities are to be computed) required for each activity. 5. Determine the critical path . 6. Update the PERT chart as the project progresses. 15. What are the benefits of PERT. PERT is useful because it provides the following information: Expected project completion time. Probability of completion before a specified date. The critical path activities that directly impact the completion time. The activities that have slack time and that can lend resources to critical path activities. Activity starts and end dates.
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