Project Management

PowerPoint Presentation: 

Sourabh Jain MBA 2010 - 2012 National Institute of Technology Karnataka Surathkal, India 12/10/2011 1 Sourabh Jain

Preface: 

Preface This is a PowerPoint file I created in order to help me in my studies. The material in these slides are a distilled version of the literature from many sources, including e-books and papers. 12/10/2011 2 Sourabh Jain

Home (1-10): 

Home (1-10) Project Idea Generation Portfolio Planning Feasibility Capacity Planning Global Sourcing Environmental Clearance Cost Estimation Investment Appraisal Methods Work Breakdown Structure Working Capital 12/10/2011 3 Sourabh Jain

Home (11-20): 

Home (11-20) Projected Balance Sheet Project Appraisal Social Cost Benefit Analysis Project Scheduling Resource Allocation Project Control Budget Management Milestone Trend Analysis Standard Costs Project Abandonment 12/10/2011 4 Sourabh Jain

Project Idea Generation: 

Project Idea Generation 12/10/2011 5 Sourabh Jain

Project: 

Project An unique undertaking for essentially a single purpose which is defined by scope, quality, time, and cost objectives. It is the art and science of directing human and material resources to achieve stated objectives within the constraints of time, budget, and quality and to the satisfaction of everyone involved Five Features of a Project Defined beginning, end, schedule, and approach Use resources specifically allocated to the work End results have specific goals Follows planned, organized approach Usually involves a team of people 12/10/2011 6 Sourabh Jain

Project Life Cycle: 

Project Life Cycle 12/10/2011 7 Sourabh Jain

Phases in Project Management: 

Phases in Project Management 12/10/2011 8 Sourabh Jain

Monitoring the environment: 

Monitoring the environment Economic Governmental Technological Socio-Demographic Competitive Supplier 12/10/2011 9 Sourabh Jain

Corporate appraisal: 

Corporate appraisal Marketing and Distribution Research and Development Production and Operations Corporate Resources and Personnel Financial and Accounting 12/10/2011 10 Sourabh Jain

Scouting for new ideas: 

Scouting for new ideas Analyze the Performance of Existing Industries Examine the Inputs and Outputs of Various Industries Review Imports and Exports Study Plan Outlays and Governmental Guidelines Look at the Suggestions of Financial Institutions and Development Agencies Investigate Local Materials and Resources 12/10/2011 11 Sourabh Jain

Scouting for new ideas: 

Scouting for new ideas Analyze Economic and Social Trends Study New Technological Developments Draw Clues for Consumption Abroad Explore the Possibilities of Reviving Sick Units Identify Unfulfilled Psychological Needs Attend Trade Fairs Stimulate Creativity for Generating New Product Ideas 12/10/2011 12 Sourabh Jain

Preliminary Screening (either Project Rating Index or NPV): 

Preliminary Screening (either Project Rating Index or NPV) Compatibility with the promoter Consistency with Govt priorities Availability of inputs Adequacy of market Reasonableness of cost Acceptability of Risk level 12/10/2011 13 Sourabh Jain

Sources of +ve NPV: 

Sources of +ve NPV Economies of Scale Product Differentiation Cost advantages Market reach Technological edge Govt policy 12/10/2011 14 Sourabh Jain

Market and Demand analysis: 

Market and Demand analysis 12/10/2011 15 Sourabh Jain

Sources of Secondary Info: 

Sources of Secondary Info Economic Survey Basic Facts Annual Reports and Accounts of the Companies Listed on the Stock Exchange Annual Reports of the Various Associations of Manufacturers 12/10/2011 16 Sourabh Jain

Characterization of Market: 

Characterization of Market Effective demand in the past and now Demographics Methods of distribution and sales promotion Supply and competition Govt policy 12/10/2011 17 Sourabh Jain

Demand Forecasting characteristics: 

Demand Forecasting characteristics Forecasts are always wrong. Should include expected value and measure of error. Long-term forecasts are less accurate than short-term forecasts Aggregate forecasts are more accurate than disaggregate forecasts 12/10/2011 18 Sourabh Jain

Demand Forecasting: 

Demand Forecasting Qualitative: primarily subjective; rely on judgment and opinion Time Series: use historical demand only Forecast = (level + trend)X seasonal factor Static Adaptive – moving average, exponential smoothing, Holt , Winter Causal: use the relationship between demand and some other factor to develop forecast Simulation Imitate consumer choices that give rise to demand Can combine time series and causal methods 12/10/2011 19 Sourabh Jain

Coping with uncertainties in forecasting: 

Coping with uncertainties in forecasting Conduct analysis with data based on uniform and standard definitions. Ignore the abnormal or out-of-ordinary observations. Critically evaluate the assumptions Adjust the projections. Monitor the environment. Consider likely alternative scenarios. Conduct sensitivity analysis 12/10/2011 20 Sourabh Jain

Portfolio Planning: 

Portfolio Planning 12/10/2011 21 Sourabh Jain

Portfolio Planning: 

Portfolio Planning 12/10/2011 22 Sourabh Jain

Portfolio Planning Models: 

Portfolio Planning Models Markowitz Mean-Variance Mean Absolute Deviation – check volatility Weighted Goal Programming – assign high weights to serious risk factors Minimax – maximize minimum return 12/10/2011 23 Sourabh Jain

Markowitz Model: 

Markowitz Model For an investor, the returns (for a given portfolio) and the stability or its absence (volatility) of the returns are the crucial aspects in the choice of portfolio. Markowitz uses the statistical measurements of mean and variance of return to describe, respectively, the benefit and risk associated with an investment. The objective is either to minimize the risk of the portfolio for a given level of return, or, to maximize the expected level of return for a given level of risk. 12/10/2011 24 Sourabh Jain

Feasibility: 

Feasibility 12/10/2011 25 Sourabh Jain

Feasibility report: 

Feasibility report General info – purpose, scope, contacts Management Summary – Objectives, environment, methodology, measures, evaluation criteria Proposed system – Description, Technical & Financial Feasibility, Impacts, SCBA, Conclusion Alternatives - Description 12/10/2011 26 Sourabh Jain

Technical Feasibility: 

Technical Feasibility System performance, interfaces and security Development processes Staff assessment Failure Immunity 12/10/2011 27 Sourabh Jain

Project Feasibility: 

Project Feasibility Management Processes Traceable WBS Planned Reviews and Audits Risk management 12/10/2011 28 Sourabh Jain

Financial Feasibility: 

Financial Feasibility Development costs Support costs Time to implement ROI, Payback and financial ratios 12/10/2011 29 Sourabh Jain

Capacity Planning: 

Capacity Planning 12/10/2011 30 Sourabh Jain

Capacity Planning: 

Capacity Planning Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. Capacity can be increased through Increase resources/equipment Process improvements technology 12/10/2011 31 Sourabh Jain

Capacity Planning: 

Capacity Planning Factors determining plant capacity Finance available Demand and Growth Economies of scale Cost of expansion vs. purchase 12/10/2011 32 Sourabh Jain

Capacity Strategies: 

Capacity Strategies Lead - proactive Lag - reactive Match – moderate adjustments Capacity Required vs. Available Capacity is calculated: (number of machines or workers) × (number of shifts) × (utilization) × (efficiency). 12/10/2011 33 Sourabh Jain

Plant Location determinants: 

Plant Location determinants 1. Raw material availability. 2. Location (with respect to the marketing area.) 3. Availability of suitable land. 4. Transport facilities. 5. Availability of labor. 6. Availability of utilities (Water, Electricity). 7. Environmental impact and effluent disposal. 8. Local community considerations. 9. Climate. 10. Political strategic considerations. 11. Taxations and legal restrictions 12/10/2011 34 Sourabh Jain

Plant Layout determinants: 

Plant Layout determinants 1. Economic considerations: construction and operating costs. 2. Process requirements. 3. Convenience of operation. 4. Convenience of maintenance. 5. Health and Safety considerations. 6. Future plant expansion. 7. Modular construction. 8. Waste disposal requirements 12/10/2011 35 Sourabh Jain

‘Functional’ Plant Layout: 

‘Functional’ Plant Layout L L L L M M M M D D D D G G G G ASSEMBLY 1 ASSEMBLY 2 Product 2 Material 2 Material 1 Product 1 Common for a large variety of products in batch volumes. Similar processes are grouped together. Inefficient: Long material transport routes from dept. to dept. Work in progress is high. Tracking of orders can be difficult. Advantages: Specialist labour and supervision. Flexibility as material can be rerouted in any sequence. 12/10/2011 36 Sourabh Jain

‘Product’ Plant Layout: 

‘Product’ Plant Layout ASSEMBLY L M D G L M D G L M D G Mass production where variety is small and production volumes are very high. AKA ‘flow’ or ‘line’ layout. More efficient, but less flexible than ‘functional’ layout. Work in progress is minimised, and jobs are easily tracked. Investment in specialised capital equipment is high, so a reliable and steady demand is required. Very sensitive to machine breakdown or disruption to material supply. 12/10/2011 37 Sourabh Jain

‘Cellular’ Plant Layout: 

‘Cellular’ Plant Layout L M D G M M D G L L L G ASSEMBLY CELL 3 ASSEMBLY CELL 2 ASSEMBLY CELL 1 AKA ‘Group Technology’ Each cell manufactures products belonging to a single family. Cells are autonomous manufacturing units which can produce finished parts. Commonly applied to machined parts. Often single operators supervising CNC machines in a cell, with robots for materials handling. Productivity and quality maximised. Throughput times and work in progress kept to a minimum. Flexible. Suited to products in batches and where design changes often occur. 12/10/2011 38 Sourabh Jain

Economic Order Quantity: 

Economic Order Quantity Q Total cost per year, T Holding costs alone 12/10/2011 39 Sourabh Jain

Global Sourcing: 

Global Sourcing 12/10/2011 40 Sourabh Jain

Sourcing Process: 

Sourcing Process Sourcing is the entire set of business processes required to purchase goods and services. 1.Supplier Scoring and Assessment 2.Selection of suppliers – Auctions and Negotiations 3.Design and execution of suppliers contract 4.Product Design Collaboration 5. Procurement of material or services 6.Sourcing Planning, Analysis and Risk Management 7. Evaluation of supplier performance 12/10/2011 41 Sourabh Jain

Supplier Scoring and Assessment : : 

Supplier Scoring and Assessment : Replenishment Lead time On-time performance Supply Flexibility Supply Quality Inbound Transportation cost Pricing Terms 12/10/2011 42 Sourabh Jain

Supplier Selection: 

Supplier Selection Sealed-bid price auctions – lowest bidder wins English Auctions – dynamic unlike sealed-bid Dutch Auctions – raise bids Second-price (Vickery) Auctions – lowest bidder, but at price quoted by second lowest 12/10/2011 43 Sourabh Jain

Procurement : 

Procurement Direct and Indirect materials Aggregation helps achieve economies of scale – capacity, information, transport, relationship Multiple suppliers with different strengths is desirable 12/10/2011 44 Sourabh Jain

Risks of outsourcing: 

Risks of outsourcing The Process is broken Underestimation of cost of coordination Reduced customer / supplier contact Loss of internal capability and growth in third party power Leakage of sensitive data and information Ineffective Contracts 12/10/2011 45 Sourabh Jain

Issues: 

Issues Offshoring production to low-cost nations is good, but watch out for costs like transportation and coordination. Offshoring to low cost nations reduces domestic employment of parent country. Costs of raw materials are rising. 12/10/2011 46 Sourabh Jain

Environmental Clearance: 

Environmental Clearance 12/10/2011 47 Sourabh Jain

EC Process: 

EC Process Screening – For state level projects - B Scoping – For both National Level (A) and B Public Consultation Appraisal 12/10/2011 48 Sourabh Jain

Investment Appraisal Methods: 

Investment Appraisal Methods Net Present Value Internal Rate of Return Discounted Payback Period Performance Index Accounting Rate of Return Click Here for a detailed PowerPoint file 12/10/2011 49 Sourabh Jain

Cost Estimation: 

Cost Estimation 12/10/2011 50 Sourabh Jain

Types: 

Types Capital costs Operational and Maintenance costs With scaling costs can escalate Linearly Exponentially LIFE CYCLE COSTS 12/10/2011 51 Sourabh Jain

Costing Methodologies: 

Costing Methodologies Expert Opinion – Delphi Analogy – Compare with similar project Parametric – relate cost to some parameters (cost estimating relationships) Engineering – cost from bottom up; includes all aspects Actual – base on historical costs. Most preferred method 12/10/2011 52 Sourabh Jain

Commercially Available Costing Models: 

Commercially Available Costing Models COCOMO – cost = no of person months X loaded labor rate Other rates are based on this cost COSTXPERT – COCOMO + database of actual projects SEER – Software/Hardware estimation SLIM – Software Life Cycle Model REVIC – Updated parameters of COCOMO COSTAR – Based on COCOMO 12/10/2011 53 Sourabh Jain

PowerPoint Presentation: 

12/10/2011 54 Sourabh Jain

Work Breakdown Structure: 

Work Breakdown Structure 12/10/2011 55 Sourabh Jain

WBS: 

WBS A (WBS) is a deliverable oriented decomposition of a project into smaller components. 100 % rule: WBS includes 100 % of deliverables as defined by project scope. Focus on outcomes. Each WBS element must contain Scope of work Begin and End of scope of work Budget allotted for work Responsibility 12/10/2011 56 Sourabh Jain

PowerPoint Presentation: 

12/10/2011 57 Sourabh Jain

Misconceptions: 

Misconceptions A WBS is not an exhaustive list of work. It is instead a comprehensive classification of project scope. A WBS is neither a project plan, a schedule, nor a chronological listing. It specifies what will be done, not how or when. A WBS is not an organizational hierarchy, although it may be used when assigning responsibilities 12/10/2011 58 Sourabh Jain

Working Capital: 

Working Capital 12/10/2011 59 Sourabh Jain

Working Capital: 

Working Capital Working capital is a financial metric which represents operating liquidity available to a business, organization, or other entity, including governmental entity Net WC = Current Assets – Current Liabilities Current Assets = acc receivable + inventory Current Liabilities = acc payable 12/10/2011 60 Sourabh Jain

WC Management: 

WC Management Cash management Inventory management Debtors management Short term financing 12/10/2011 61 Sourabh Jain

Projected Balance Sheet: 

Projected Balance Sheet 12/10/2011 62 Sourabh Jain

Creation: 

Creation Collect the company’s financial records. Separate them into income and expenses. Prepare an estimate of current assets. List the current value of real property, land, machinery and equipment owned by the business. Identify intangible assets, their value and any associated costs. Create a summary of the company’s liabilities. Make a separate list of expenses that are not due within 12 months, like bank loans. Finish the balance sheet by calculating the owner’s equity, sometimes referred to as the company’s net worth. 12/10/2011 63 Sourabh Jain

Cash Flow statements: 

Cash Flow statements The purpose of the cash flow statement is to report the sources and uses of cash during the reporting period. 3 sections: cash flows from operating activities cash flows from investing activities cash flows from financing activities 12/10/2011 64 Sourabh Jain

Cash Flow statements methods: 

Cash Flow statements methods Direct method – analyze cash and bank accounts Cash receipts from customers Cash payments for inventory Cash paid to employees Cash paid for operating expenses Taxes paid Interest paid Equals net cash provided by (used in) operating activities 12/10/2011 65 Sourabh Jain

Cash Flow statements methods: 

Cash Flow statements methods Indirect method – analyze income and expense accounts and working capital Net income per the income statement Minus entries to income accounts that do not represent cash flows Plus entries to expense accounts that do not represent cash flows Equals cash flows before movements in working capital Plus or minus the change in working capital, as follows: An increase in current assets = negative figure because cash was spent A decrease in current assets = positive figure An increase in current liabilities = positive figure A decrease in current liabilities = negative figure 12/10/2011 66 Sourabh Jain

Project Appraisal: 

Project Appraisal 12/10/2011 67 Sourabh Jain

Appraisals/Planning: 

Appraisals/Planning PERT/CPM SWOT Problem Tree Analysis Stakeholder Analysis Logical Framework Analysis 12/10/2011 68 Sourabh Jain

Social Costs Benefit Analysis: 

Social Costs Benefit Analysis 12/10/2011 69 Sourabh Jain

SCBA: 

SCBA A methodology developed for evaluating investment projects from the point of view of the society (or economy) as a whole. Used primarily for public investment 12/10/2011 70 Sourabh Jain

Problems Solvable by SCBA -1: 

Problems Solvable by SCBA -1 Principle sources of discrepancy: Market Imperfection – FOREX regulation Externalities – external benefits/ unintended Taxes and Subsidies - Taxes reduce benefits Concern for Savings – Saving benefit is better Concern for redistribution – focus on poor Merit Wants – larger interest 12/10/2011 71 Sourabh Jain

Problems Solvable by SCBA -2: 

Problems Solvable by SCBA -2 With UNIDO approach, we can evaluate net benefit from any project 12/10/2011 72 Sourabh Jain

Problems Solvable by SCBA -3: 

Problems Solvable by SCBA -3 With shadow price, we know the effect of using one more unit of resources on the social cost and benefits. Shadow pricing is relating to decision of project manager. Sources of Shadow Prices Increase or decrease the total consumption in the economy Decrease or increase production in the economy Increase or decrease export or import 12/10/2011 73 Sourabh Jain

Project Scheduling: 

Project Scheduling 12/10/2011 74 Sourabh Jain

Project Scheduling: 

Project Scheduling Scheduling is carried out in advance of the project commencing and involves: identifying the tasks that need to be carried out estimating how long they will take allocating resources (mainly personnel) scheduling when the tasks will occur 12/10/2011 75 Sourabh Jain

Tools: 

Tools Milestone Charts Gantt Charts Activity Networks Critical Path Method/PERT Critical Chain Scheduling Monte Carlo Simulation 12/10/2011 76 Sourabh Jain

Resource Allocation: 

Resource Allocation 12/10/2011 77 Sourabh Jain

Resource Allocation Process: 

Resource Allocation Process Define your mission Inventory you resources Inventory your projects Reallocate resources using Resource Allocation Matrix 12/10/2011 78 Sourabh Jain

PowerPoint Presentation: 

12/10/2011 79 Sourabh Jain

The Key to Effective Project Resource Allocation : 

The Key to Effective Project Resource Allocation Determine quickly what resource you will need Determine who the best people are in that are Approach their line manager and check on their availability Assuming they are available put their name down against the relevant tasks in your project plan Get your project plan into the PMO and get it baselined as soon as possible 12/10/2011 80 Sourabh Jain

Issues: 

Issues Check out project.net for awesome resource allocation and diagnostic software Overcommitment Overallocation 12/10/2011 81 Sourabh Jain

More issues: 

More issues Project Silos – no checks to see allocation Failure of resource pools – overallocation Prioritized Projects – to counter overallocation Building a culture of decision making Creating change from bottom up Risk Management 12/10/2011 82 Sourabh Jain

Project Control: 

Project Control 12/10/2011 83 Sourabh Jain

Project Control: 

Project Control Control – process and activities needed to correct deviations from plan Control the triple constraints time (schedule) cost (budget, expenses, etc) performance (specifications, testing results, etc.) 12/10/2011 84 Sourabh Jain

PowerPoint Presentation: 

12/10/2011 85 Sourabh Jain

Technique for control – Earned Value Analysis: 

Technique for control – Earned Value Analysis Measures overall performance Earned value of task = % of task completed X planned cost for task Methods 50-50 – 50 % assumed at start, rest 50 % at end 0-100 – Not considered 100 % until finished Critical Input rule – How much critical input used Proportional Rule – time to date/ scheduled time 12/10/2011 86 Sourabh Jain

Earned Value Analysis: 

Earned Value Analysis Baseline (planned) cost to completion – referred to as budget at completion (BAC) Actual cost to date – referred to as estimated cost at completion (EAC) Identify several variances according to two guidelines A negative variance is ‘bad’ Cost and schedule variances are calculated as earned value minus some other measure 12/10/2011 87 Sourabh Jain

PowerPoint Presentation: 

12/10/2011 88 Sourabh Jain

Variances: 

Variances 4 types of variances; Cost (spending) variance (CV) – difference between budgeted cost of work performed (earned value) (BCWP) and actual cost of that work (ACWP) Schedule variance (SV) – difference between earned value (BCWP) and cost of work we scheduled to perform to date (BCWS) Time variance (TV) –difference between time scheduled for work performed (STWP) and actual time to perform it (ATWP) 12/10/2011 89 Sourabh Jain

Problem: 

Problem A project to develop a country park has an actual cost in month 17 of $350,000, a planned cost of $475,000, and a value completed of $300,000. Find the cost and schedule variances and the three indexes. BCWS = 475,000 BCWP = 300,000 ACWP = 350,000 CV = 300,000 – 350,000 = -50,000 (negative value - cost overrun) SV = 300,000 – 475,000 = -175,000 (negative value - behind schedule) Cost Performance Index (CPI) = BCWP/ACWP = 300/350 = 0.86 Schedule Performance Index (SPI) = BCWP/BCWS = 300/475 = 0.63 Time Performance Index (TPI) = STWP/ATWP Scheduled Time Work Performed (STWP) can be estimated Time t = Schedule Variance/Slope of Planned costs = -175,000/ (475,000/17) = - 6.26 months  Time Difference= 17- 6.26 = 10.74 TV = 10.74/17 = 0.63 12/10/2011 90 Sourabh Jain

Critical Ratio: 

Critical Ratio The critical ratio is actual progress x budgeted cost scheduled progress actual cost If ratio is 1 everything is probably on target The further away form 1 the ratio is, the more we may need to investigate 12/10/2011 91 Sourabh Jain

Budget Management: 

Budget Management 12/10/2011 92 Sourabh Jain

Budget: 

Budget It is a financial and /or quantitative statement, prepared and approved prior to a defined Period of time of the policy to be pursued during that period for the purpose of attaining a given objective. It may include income, expenditure and employment of capital. 12/10/2011 93 Sourabh Jain

Key reasons for overspending… : 

Key reasons for overspending… Bad Luck Overly optimistic initial estimates Poor communication Poor cost/time estimating practices 12/10/2011 94 Sourabh Jain

Types: 

Types Time period – short term < 1yr (cash budget) / > 1yr long term (R&D budget) Conditions – basic – forever /current – for now Capacity – fixed (rigid)/flexible Coverage – functional/master 12/10/2011 95 Sourabh Jain

Objectives of Budgeting: 

Objectives of Budgeting Definition of Goals Defining Responsibilities Basis for Performance Evaluation Optimum use of Resources Co­ordination 6. Planned action 12/10/2011 96 Sourabh Jain

Steps in budgeting: 

Steps in budgeting Define objectives Locate budget factor – main driver of budget Allocate a controller Budget period Standard of activity 12/10/2011 97 Sourabh Jain

Metrics: 

Metrics Capacity Ratio = Actual hours/Budgeted hours Efficiency Ratio = Actual Output in Std hours/ Actual Hours Activity Ratio = Actual Output in STd hours/ Budgeted Output in STd hours 12/10/2011 98 Sourabh Jain

Disadvantages of budgeting: 

Disadvantages of budgeting Estimates Rigidity False Sense of Security Lack of co­ordination 5. Time and Cost 12/10/2011 99 Sourabh Jain

Milestone Trend Analysis: 

Milestone Trend Analysis 12/10/2011 100 Sourabh Jain

PowerPoint Presentation: 

12/10/2011 101 Sourabh Jain

Standard Costs: 

Standard Costs 12/10/2011 102 Sourabh Jain

Standard cost: 

Standard cost Refers to the cost that management believes should be incurred to produce a good or service under anticipated conditions. Standard costs are developed in a variety of ways. They are specified by formulas or recipes. developed from price lists provided by suppliers. determined time and motion studies conducted by industrial engineers. developed from analyses of past data. 12/10/2011 103 Sourabh Jain

Material Price Variance: 

Material Price Variance The material price variance is expressed as (AP – SP) AQ p where: (AP) = actual price per unit of material. (SP) = standard price per unit of direct material. ( AQ p ) = actual quantity of material purchased. If actual price > standard price, then the variance is unfavorable. 12/10/2011 104 Sourabh Jain

Material Quantity Variance: 

Material Quantity Variance The material quantity variance is expressed as ( AQ u – SQ)SP where: ( AQ u ) = actual quantity of material used. (SQ) = standard quantity of material allowed. (SP) = standard price of material. If actual quantity > standard quantity, then the variance is unfavorable. 12/10/2011 105 Sourabh Jain

Labor Rate Variance: 

Labor Rate Variance The labor rate (price) variance is expressed as (AR – SR)AH where: (AR) = actual wage rate (price). (SR) = standard wage rate (price). (AH) = actual number(quantity) of labor hours. If actual rate > standard rate, then the variance is unfavorable. 12/10/2011 106 Sourabh Jain

Labor Efficiency Variance: 

Labor Efficiency Variance The labor efficiency (quantity) variance is expressed as (AH – SH)SR where: (AH) = actual number of hours worked. (SH) = standard number of hours worked. (SR) = standard labor wage rate. If actual hours > standard hours, then the variance is unfavorable. 12/10/2011 107 Sourabh Jain

Overheads variances: 

Overheads variances The controllable overhead variance is expressed as (actual overhead - flexible budget level of overhead) for actual level of production. The overhead volume variance is expressed as (flexible budget level of overhead for actual level of production - overhead applied to production using standard overhead rate). 12/10/2011 108 Sourabh Jain

Project Abandonment: 

Project Abandonment 12/10/2011 109 Sourabh Jain

PowerPoint Presentation: 

12/10/2011 110 Sourabh Jain

Purposeful abandonment: 

Purposeful abandonment Purposeful abandonment is the cessation of something that you or your company have been doing for months or years but no longer gaining the results or traction you originally hoped for. The few causes of project abandonment as inadequate project planning; inadequate fund, inflation, bankruptcy of Contractor, variation of project scope, political factor, death of client, incompetent project manager, wrong estimate, inadequate cost control, faulty design and delayed payment. 12/10/2011 111 Sourabh Jain

PowerPoint Presentation: 

THANK YOU 12/10/2011 112 Sourabh Jain