IDK

Q7.
Step 1: Calculate Expected Time (te) and Variance for Each Activity
Use the formula:
 te = (to + 4tm + tp) / 6
 Variance = ((tp - to) / 6)²
Activity to tm tp te Variance
A 2 4 12 (2 + 4×4 + 12)/6 = 5.3 ((12 - 2)/6)² = 2.78
B 10 12 26 (10 + 4×12 + 26)/6 = 14 ((26 - 10)/6)² = 4.44
C 8 9 10 (8 + 4×9 + 10)/6 = 9 ((10 - 8)/6)² = 0.11
D 10 15 20 (10 + 4×15 + 20)/6 = 15 ((20 - 10)/6)² = 2.78
E 7 7.5 11 (7 + 4×7.5 + 11)/6 = 8 ((11 - 7)/6)² = 0.44
F 9 9 9 9 0
G 3 3.5 7 (3 + 4×3.5 + 7)/6 = 4.0 ((7 - 3)/6)² = 0.44
H 5 5 5 5 0
Step 2: Construct the Project Network (AOA Critical Path = A → D → G → H
diagram) Expected Project Duration = 29.3 weeks
Dependencies:
 A → C, D, E Step 4: Calculate Standard Deviation and Variance
 B→F of the Critical Path
 C, D, E → G Add variances on critical path:
 E, F, G → H A (2.78) + D (2.78) + G (0.44) + H (0) = 6.00
Now create all paths from Start to End:  Standard Deviation (σ) = √6 ≈ 2.45
1. A → C → G → H  Variance = 6.00
2. A → D → G → H
3. A → E → G → H Step 5: Probability of Completing in 30 Weeks
4. B → F → H Use Z = (Due Date - Expected Duration) / σ
Step 3: Find Path Durations (Add te values) Z = (30 - 29.3) / 2.45 ≈ 0.29
1. A (5.3) + C (9) + G (4) + H (5) = 23.3 From Z-table, P(Z ≤ 0.29) ≈ 0.6141
2. A (5.3) + D (15) + G (4) + H (5) = 29.3 Probability = 61.41%
3. A (5.3) + E (8) + G (4) + H (5) = 22.3
4. B (14) + F (9) + H (5) = 28.0
Q1. Differentiate between the Functional, Pure Project, and Matrix organizations.
In project management, the organizational structure plays a crucial role in how projects are executed. The
three most common types are Functional, Pure Project, and Matrix organizations. Each has distinct
characteristics, advantages, and disadvantages based on authority flow, resource allocation, and project
control.
A. Functional Organization
Definition:
A structure where the organization is divided into departments (e.g., IT, HR, Finance) based on functions.
Projects are executed within these departments using existing hierarchy.
Key Features:
 Projects are handled by functional departments.
 The functional manager has full authority.
 Project manager (if any) has limited role—often a coordinator.
Advantages:
 Efficient use of specialized skills.
 Clear career path and reporting lines.
 Strong technical expertise development.
Disadvantages:
 Slow project execution due to limited coordination.
 Lack of ownership and commitment to project goals.
 Poor communication across departments.

B. Pure Project Organization (Projectized Structure)

Definition:
A structure where the entire team is dedicated to one project. The project manager has full authority over the
team, budget, and resources.
Key Features:
 Independent project teams are created for each project.
 Strong, centralized leadership under the project manager.
 Teams disband after project completion.
Advantages:
 High project focus and accountability.
 Fast decision-making and execution.
 Clear roles and responsibilities.
Disadvantages:
 Duplication of resources across projects.
 Team members may lack a clear career path after project ends.
 Expensive due to dedicated staffing.
C. Matrix Organization
Definition:
A hybrid structure combining functional and projectized features. Team members report to both a functional
manager and a project manager.
Types:
1. Weak Matrix – Project manager acts as a coordinator.
2. Balanced Matrix – Shared power between project and functional managers.
3. Strong Matrix – Project manager has more authority.
Key Features:
 Dual reporting relationships.
 Resources are shared across projects.
 Encourages collaboration between functions.
Advantages:
 Efficient resource utilization.
 Flexibility and balanced decision-making.
 Better coordination across departments.
Disadvantages:
 Confusion due to dual authority.
 Conflict between functional and project managers.
 Increased complexity in management.

Feature Functional Organization Pure Project Organization Matrix Organization

Authority Functional Manager Project Manager Shared (depends on type)
Team Loyalty To department To project Split
Communication Flow Vertical (hierarchical) Horizontal (across team) Both vertical and horizontal
Resource Utilization High (shared) Low (dedicated teams) Balanced
Project Focus Low High Moderate to High
Cost Low High Moderate
Flexibility Low Low High

Q2. How communication is planned and managed in project management? (Repeat x2)
Effective communication is critical for project success, as it ensures that all stakeholders are informed, aligned,
and actively engaged throughout the project lifecycle. In project management, communication planning and
management involve systematically identifying stakeholders' information needs and defining how, when, and
through which channels this information will be shared.
Communication Planning (Plan Communications Management)
This is a process in the planning phase of the project lifecycle. It defines:
a. Objectives of Communication
 Ensure right information reaches the right people at the right time.
 Minimize misunderstandings and conflicts.
 Align project deliverables with stakeholder expectations.
b. Inputs to Communication Planning
 Project Charter
 Stakeholder Register
 Organizational culture and structure
 Enterprise Environmental Factors (EEFs)
 Organizational Process Assets (OPAs)
c. Key Elements in Communication Planning
 Stakeholder Analysis: Identifying who needs what information and when.
 Communication Requirements Analysis: Determining the type and frequency of communication (e.g.,
status reports, dashboards, escalations).
 Communication Methods:
o Interactive: Meetings, calls, video conferences
o Push: Emails, memos, newsletters
o Pull: Intranet, shared folders
 Communication Matrix/Table (defines who communicates what, when, how)
d. Communication Management Plan
A formal document that includes:
 Communication objectives
 Information to be communicated
 Frequency and format (e.g., daily standups, weekly reports)
 Sender and receiver responsibilities
 Technology or tools used (e.g., MS Teams, Jira, Slack)

Communication Management During Execution (Manage Communications)

Once the plan is created, it must be executed:
a. Disseminating Information
 Collecting project data and transforming it into meaningful reports.
 Sharing updates through formal channels (meetings, reports) and informal channels (chat, email).
b. Tools and Techniques
 Project management tools (MS Project, Trello, Asana)
 Communication technology (emails, dashboards, collaboration platforms)
 Project reporting tools (Gantt charts, progress reports)
c. Performance Reporting
 Status reports, progress charts, performance indices (e.g., CPI, SPI)
 Forecasting (e.g., Estimate at Completion - EAC)
Monitoring Communication (Monitor Communications)
This involves evaluating if the communication is effective and making adjustments as needed.
a. Key Activities
 Stakeholder feedback collection
 Monitoring stakeholder satisfaction
 Updating communication strategies
 Ensuring communication goals align with project objectives
b. Common Challenges
 Language or cultural barriers (especially in global teams)
 Lack of clarity or frequency
 Miscommunication due to poor channel selection
Importance of Communication in Project Management
a. Enhances Collaboration
 Encourages active participation from team members and stakeholders.
b. Supports Risk Management
 Early identification of issues through transparent reporting.
c. Boosts Morale and Trust
 Regular updates improve stakeholder confidence.
d. Prevents Scope Creep
 Clear change communication ensures all parties are informed and aligned.
Best Practices
 Create a communication matrix early.
 Customize communication style based on stakeholder needs (e.g., executives vs. team).
 Maintain transparency and regularity.
 Encourage two-way communication.
 Use visual tools (dashboards, charts) for clarity.
Q3. Explain the significance of IRR method in project selection.
Ans.
The Internal Rate of Return (IRR) is a key financial metric used in project selection and investment decision-
making. It is defined as the discount rate at which the Net Present Value (NPV) of all future cash flows from a
project becomes zero.
Mathematically, IRR is the value of r in the NPV equation:

Where:
 C0 = Initial investment
 Ct = Cash inflow at time t
 r = IRR
 n = Number of periods
Purpose of IRR in Project Selection
 Evaluates Profitability: Shows the annualized return expected from the project.
 Assists in Decision-Making: A project is selected if IRR exceeds the company’s required rate of return or
cost of capital.
 Compares Projects: Helps in ranking and selecting among multiple projects.
 Considers Time Value of Money (TVM): Future cash inflows are discounted, making the analysis
realistic.
Significance and Importance
 Alignment with Organizational Objectives
o IRR ensures that only financially sound and profitable projects are selected, helping the
organization achieve growth and sustainability.
 Supports Capital Budgeting
o In capital budgeting, where long-term investment decisions are made, IRR acts as a key selection
criterion to filter out high-yield projects.
 Risk Assessment
o Projects with a higher IRR are generally less risky, as they promise a higher return on investment,
even under uncertainty.
 Comparison Across Alternatives
o When organizations are evaluating multiple investment options, IRR provides a common basis for
comparison—especially when projects vary in scale, time, or cost.
 Budget Optimization
o By ranking projects based on IRR, limited capital can be allocated to those with the best financial
returns.
o IRR Decision Rule
 If IRR > Required Rate of Return (RRR) → Accept the project.
 If IRR < RRR → Reject the project.
 If IRR = RRR → Project is marginal; consider other qualitative factors.

Benefits of Using IRR

a. Simple Interpretation
Expressed as a percentage—easy to compare and communicate.
b. Time Value Consideration
IRR accounts for the time value of money, unlike payback period or accounting rate of return.
c. No Need for Hurdle Rate (Initially)
Unlike NPV, IRR can be calculated without knowing the required rate of return.
d. Objective Decision Criterion
Gives a quantitative, unbiased method for investment selection.

Limitations of IRR (To Be Considered While Using)

 Multiple IRRs: In projects with alternating cash flows (positive-negative-positive), multiple IRRs can
exist.
 Assumes Reinvestment at IRR: Unrealistic in some situations as reinvestment is usually at cost of
capital, not at IRR.
 Not Suitable for Mutually Exclusive Projects: May lead to wrong selection if one project has a higher IRR
but lower NPV.

IRR vs. NPV (Quick Comparison)

Criteria IRR NPV
Output Return % Absolute monetary value
Decision Rule Accept if IRR > RRR Accept if NPV > 0
Reinvestment Rate IRR (assumed) Discount rate or cost of capital
Preference Easy to understand More accurate for large projects

Q6.
Step 1: Calculate Expected Time (te) and Variance
The formulas are:
 Expected Time (te) = (to + 4×tm + tp)/6
  Variance (σ²) = ((tp - to)/6)²
Let's compute:
Activity to tm tp te Variance
A 3 6 9 (3+24+9)/6 = 6.0 ((9-3)/6)² = 1.0
B 5 7 8 (5+28+8)/6 = 6.5 ((8-5)/6)² = 0.25
C 6 9 12 (6+36+12)/6 = 9.0 ((12-6)/6)² = 1.0
D 6 12 15 (6+48+15)/6 = 11.5 ((15-6)/6)² = 2.25
E 8 12 16 (8+48+16)/6 = 12.0 ((16-8)/6)² = 1.78
F 12 18 24 (12+72+24)/6 = 18.0 ((24-12)/6)² = 4.0
G 6 9 12 (6+36+12)/6 = 9.0 ((12-6)/6)² = 1.0
H 3 6 9 (3+24+9)/6 = 6.0 ((9-3)/6)² = 1.0

Step 2: Draw the Network Diagram

Dependencies:
 A → C, D
 B → E, F
 C, D, E → G
 C→H
From here, draw a node diagram that connects based on above.

Step 3: Identify Paths and Compute Durations

Let’s calculate total te for each path:
 Path 1: A → C → G = 6.0 + 9.0 + 9.0 = 24.0
 Path 2: A → D → G = 6.0 + 11.5 + 9.0 = 26.5
 Path 3: B → E → G = 6.5 + 12.0 + 9.0 = 27.5 ← Critical Path
 Path 4: C → H = 9.0 + 6.0 = 15.0

Step 4: Total Project Duration and Variance of Critical Path

 Critical Path: B → E → G
 Project Duration (Te): 6.5 + 12.0 + 9.0 = 27.5 days
 Variance: 0.25 (B) + 1.78 (E) + 1.0 (G) = 3.03
 Standard Deviation (σ) = √3.03 ≈ 1.74

Step 5: Answer Part (ii)

Due Date = 30 days
Z = (Due Date - Te) / σ = (30 - 27.5) / 1.74 ≈ 1.44
From Z-tables, P(Z ≤ 1.44) ≈ 0.9251
Probability of completing in ≤ 30 days ≈ 92.51%

Step 6: Answer Part (iii)

Between 26 to 31 days
Z1 = (26 - 27.5)/1.74 ≈ -0.86 → P ≈ 0.1949
Z2 = (31 - 27.5)/1.74 ≈ 2.01 → P ≈ 0.9778
Probability = 0.9778 - 0.1949 = 0.7829
≈ 78.29% chance of completing between 26 and 31 days