This assignment comprises three discrete tasks. It has been designed to test your knowledge and understanding in a range of project management functions.
A Local Authority (LA) is based in a council-owned compact complex of municipal buildings, which provides office accommodation for its staff. A recent review of the office provision on the site identified that under-investment over a number of years resulted in a rapidly depreciating portfolio. The LA is planning to embark on a modernisation programme to address Health & Safety and other legislative requirements, align floor space per person to current standards, introduce workspace design that increases corporate efficiency and minimise total ownership costs. The Eleanor Ridgley building with approximately 1,200 m2 Gross Internal Floor Area (GIFA) accommodates the Advice and Information and Contact Centre functions and has been prioritised for Phase 1 of the programme. A business justification report was carried out in the concept stage and identified the following options. Delaying investment until the next portfolio review is carried out. This do nothing option involves planned and reactive maintenance costs and carries a low probability of 10%. Alternatively, an investment decision with 90% probability explores three outcomes. A repairs scenario with a probability of 20% which could entail either essential repairs or full repairs with probabilities of 40% and 60% respectively. A reconfiguration option to facilitate the creation of modern open plan offices and shared spaces. This option is being considered favourably, as it will encourage collaborative and innovative working and has a probability of 70%. Finally, a new development and relocation option in council-owned space closer to the city centre with a 10% probability. The timescales linked to the identified scenarios, associated costs and benefits are provided in Table 1 below. The benefits were calculated using the council’s matrix of weighted quantitative and qualitative criteria which consider revenue as well as factors relating to corporate image, service effectiveness, business continuity and sustainable development economic efficiencies. The benefits listed in Table 1 are for a stable economy. Therefore, these benefits require adjustments by +10% in the case of an economic upturn or -10% in the case of an economic downturn.
- All the above costs and benefits are in nominal values.
- Inflation should be considered using the discount rate on annual basis and only in the case of costs/benefits incurred after 12 months.
- The benefits listed above need adjustments in the case of economic states other than a stable economy.
Economic forecasts indicate that there is 20% probability for an economic boom, 50% probability that the economy will remain stable and 30% probability for an economic downturn. These three economic states and a discount rate of 4% apply to all possible
alternatives in this analysis.
You are required to support the options appraisal and give reasoned advice to the council on the optimum option to consider and configure further. You are to perform the following:
a) Construct a decision tree to map all possible decision paths and alternatives, as well as associated probabilities, costs and benefits for a 2-year planning horizon.
b) Carry out decision tree analysis to appraise the full set of options and recommend the most economically viable decision path to your client.
Aktor Ltd is a well-established medium-size construction company that specialises in substructure works. An opportunity has been identified for bidding to undertake the foundation works in a new maintenance garage for a large cars and commercial vehicles dealership. Aktor Ltd are very keen to submit a bid, particularly as the tender invitation package placed this project in the context of a larger programme of works that could lead to more similar projects over the next three years. Aktor Ltd. are planning to submit a competitive price for this work package. However, they are aware that during the period the works will be in progress, they will have a substantial percentage of their available labour tied up in a number of other projects. For this reason, accurate planning is essential. The project planner has produced a Work Breakdown Structure (WBS) and determined the durations for the various activities and their precedence relationships. These activities relate to enabling works and the foundations for the service pit, service bay and offices areas. All related data is presented in Table 2. You are required to carry out the following:
a) Construct the project’s Activity on Node (AON) network diagram and implement the Critical Path Method (CPM) to determine the critical path(s) and project duration.
b) Produce the Gantt chart for the early start programme to assist Aktor Ltd with the planning of this work package. The timescale on the Gantt chart should show days from the project start and activity start and finish times should match those of the CPM network diagram.
c) The project planner fears that there is uncertainty regarding the service pit footings and the ground slab for the offices area. Using the data provided in Table 3, calculate the probability of project completion within 50 days.