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PMP® 2018 Certification Project: Automobile Industry

Project 1 
DESCRIPTION
Project 1: Automobile Industry
Duration - 110 minutes
Welcome! You are invited to analyze the scenario below and determine from the requests
what actions you are to take, using your knowledge of Project Management and your ability
to analyze and make an informed decision.
All that you need to perform the activities below can be found in the Simplilearn material and
the PMBOK® Guide - Sixth Edition, but if you need further clarity, please feel free to reach
out to trainers for guidance.
The times documented below are recommendations and should be suggestions of the level of
detail expected. You cannot assume you have enough information to do these assignments as
in a real project, but you should be able to provide enough information to show that you
understand what is being discussed, why it’s important, and what action you would take to
control your Project.
The data provided is general, but specific. The data will provide hints as to what you need to
consider. If they don’t make sense, you have two options – use them anyway or ask for
clarification. You may want to revise numbers or add specific details. Yes, you can do this,
much like you would do this on any project. However, if you modify the scenario, it must be
reasonable and realistic, and it must be wholly integrated into the project. Remember – all
aspects of the project must either support the project success and/or minimize failure, and
you will need to justify that to ensure a successful outcome.
  
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Situation: 
You work for an automobile industry. Your organization has initiated a project to upgrade the
cars. The sponsor has appointed you as the Project Manager. For this project, one of the
requirements is special electronic auto parts. Your organization has the capability to produce
these auto parts. However, during the planning phase, some stakeholders suggest that the
production of the auto parts can be outsourced. You feel that there is a risk associated with
this; you decide to use the decision tree tool to figure out whether it is better to outsource this
or do it yourself. After brainstorming with the team, you identify the following values and the
risks associated. 

Decision Outcome

In-house investment is $100K Probability

  Impact

  Probability
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  Impact

Outsourcing investment is $40K     Probability

  Impact

  Probability

  Impact
A. Use the Decision Tree tool and decide which option is better: Producing in-house or
outsourcing - 15 Minutes
Regardless of the Decision Tree outcome, you decide to outsource the production of
electronic parts. For this, you need to plan the procurement. With this process, you can come
up with a subsidiary plan. 
Many sellers in the market can produce these electronic parts. You need to evaluate and
select a seller. To make this happen, you decide to develop Source Selection Criteria.
B. Develop the relevant subsidiary plan and the possible Source Selection criteria list - 30
Minutes
C. After the planning is done, you select the seller and sign the contract. This process can be
termed an agreement. Develop a sample agreement that has the key elements - 20 minutes
As part of the Control Procurements process, you receive the work performance data and
report from the seller. The data says that 40% of work is completed, whereas the seller is
supposed to complete 50% of the work. This calls for a change request to bring the project on
track. 
D. Briefly explain Work Performance Data, Work Performance Information, and Work
Performance Report. Develop possible Work Performance Data and Work Performance
Report documents for this scenario.  Also explain the techniques used in this process to
address the change - 15 minutes
E. To monitor the procurement-related activities, you can use the control procurement
process. List the techniques used under control procurements and write down a few lines
about these techniques - 30 minutes.
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Solution:-
A.
Decision Definition Decision Node Change Node Net Path Value
Input-Scenario Probability, reward if
Input-Cost of Each Decision occurs Computed->payoff minus costs
Decision to be made Output- Decision Made Output-Expected Monetary value along path

Gain ($120k)
70% $20k
$20k=($120k-$100k)
In House development
Investment- $100k

30%
In House Loss ($30k) -$130k
developmen $45k=(0.7*$120k-
t or 0.3*130k) -$130k=(-$100-$30)
Outsourcing

50% Gain($100k) $60k

50% $60k=$100k-$40k

Outsourcing
Investment- $40k

50%
$5k=(0.5*$60k- Loss($10k)
-$50k
0.5*50k)
-$50k=(-$40k-$10k)

As per the decision tree, if inhouse development option is selected then there is a higher
probability of success (70%) and on top of that the revenue is coming much
higher($45k) in comparison to $5k in outsourcing mode. So, should go for inhouse
development.
B.
Subsidiary management plans:

The subsidiary management plans are provided below for outsourcing model selected as the
option to move forward to upgrade automobile cars
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Name Comment

Scope The scope of the project is limited to upgrading of automobile cars

Time 6 months timeframe assumed at initial phase

Cost $40k as outsourcing model selected

Quality A grade product quality is expected to upgrade cars from sellers

Inhouse workers of the automobile industry will help in upgrading of the cars using the outsoured
Resources
materials

Communications Truck is used as the primary mode of communicaiton

There is adequate risks like

1. In case of project failure there will be loss of -$50k.
2. Presece of in-efficnet workers,
Risk 3. Delay in outsourcing of raw-materials,
4. Delay in start-up of project work
5. Any unforeseen accidents or fatalities
6. Natural calamities

It is planned to procure the required materials to upgrade automobile cars from a vendor that supplies
Procurement
those materials at suitable cost.

Stakeholders are primarily the chief members, owner and contractors associated with the automobile
Stakeholders
industry and the vendor providing the outsourced materials.

Other Plans Nothing specific to mention right now

SOURCE SELECTION CRITERIA

In choosing evaluation criteria, the following source selection criterions are selected. The
source selection criteria may include but are not limited to:
 Capability and capacity- 50tons each
 Product cost and life cycle cost- $5k, $2k
 Delivery dates- yet to be finalised
 Technical expertise and approach- In house technical expertise
 Specific relevant experience – 5 yrs minimum
 Adequacy of the proposed approach and work plan in responding to the SOW-yes
 Key staff’s qualifications, availability, and competence- this is specific to particular
job role
 Financial stability of the firm- Good
 Management experience- 10yrs
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 Suitability of the knowledge transfer program, including training.

C. Agreement for the project is showcased below

Project Agreement in the form of project charter

PROJECT CHARTER

1.0 PROJECT IDENTIFICATION

Name Upgradation of automobiles like cars

Description Design, develop and implement upgrade of cars
Sponsor Automobile industry owner
Project Manager Mr. Jon
Project Team Team members, vendors etc Communications, Policy, Healthy
Resources Workplace Advisory group, Attraction
& Retention working group

2.0 BUSINESS REASONS FOR PROJECT

 To able to cut down on the inhouse investment cost
 Reduction of time by outsourcing required raw materials.
 To grow faster in the automobile market segment.
 Establishing a healthy workplace
 To be able to upgrade cars with low investment.

3.0 PROJECT OBJECTIVES (PURPOSE)

 Overall, to create a workplace culture that includes regular recognition and feedback
 To recognize employees for their high-quality service in producing upgraded automobile cars
 To develop tools, guidelines and support for departments to assist with further recognition
activities
 To develop and implement corporate recognition activities

4.0 PROJECT SCOPE

 To include recognition activities for all departments of the automobile industry
 To address successful upgrade of the automobiles
 Includes guidelines to govern corporate and department activities
 Does not include any specific mandatory requirements
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5.0 KEY PROJECT DELIVERABLES

Name Description
Framework Overall roadmap outlining key components of recognition activities
Project charter Present
Logic Model Outlines key activities, outcomes and measures
Project A supplement to the project charter outlining definitions and outcomes
backgrounder
Research summary To include general, jurisdictional and corporate research
Guidelines To include general program guidelines and financial guidelines
Tools and To include templates, guides, sample surveys, quotes, tips, etc… for use by
resources departments
Communication/ Communication of framework, tools resources to stakeholder groups,
Implementation communication plan
plan
Website To contain framework, guidelines, general information, tools and resources for
use by departments, along with information on current activities/events.

6.0 KEY ISSUES

Severity Description
1 Different levels of implementation and buy-in; some departments have programs and others
have not.
2 Departmental recognition activities are not mandatory
3 Buy-in from HR community and managers to take ownership of departmental activities
4 Maintain momentum and sustainability of activities
5 Timelines around the coordination of guideline development with development of the
healthy workplace policy
6 Timelines around coordinating the recognition framework implementation with the attraction
and retention framework implementation
7 Employee and manager perceptions
8 Public perceptions

7.0 RISKS
Severity Description
1 Support and buy-in of framework, guidelines and tools from the HR community
2 Support and buy-in of framework, guidelines and tools from managers
3 Support and buy-in of framework, guidelines and tools from employees
4 Implementation timelines
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5 Availability of supporting resources (i.e. communication, policy) and on time delivery from
vendors

8.0 PROJECT’S CRITERIA FOR SUCCESS (MUST BE MEASURABLE)

 Increase awareness and consistent practice of recognition throughout the organization
 Create a healthier and more supportive working environment
 Improved job satisfaction and employee engagement
 Improved awareness and linkages between industrial business plans and individual and team
performance (employee survey results)
 Proper communication between vendors and owner of the automobile industry.

9.0 CRITICAL SUCCESS FACTORS

 Buy-in and support from senior leaders, HR community, managers, employees
 Effective communication
 PSC and department collaboration
 Employee input into development and implementation of recognition activities
 Employee awareness pertaining to the development and upgradation of automobiles, priorities,
objectives, goals and values
 Recognition efforts need to be: timely; meaningful; fair; inclusive
 Activities are supportive of organizational values

10.0 SIGNOFF
Project Sponsor: Mr. Rakesh Sinhania

Date:

D.

Work Performance Data - Work performance data is raw measurements before any
analysis. A work performance report is a compilation of work performance information for
consumption for some purpose such as status or decision making.

Work Performance Information - Once work performance data has been analysed or
processed; it becomes work performance information.

Work Performance Report - A work performance report is a compilation of work

performance information for consumption for some purpose such as status or decision
making.
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Work performance Data for this project

Milestone Date Status Responsible Issues/ Comments

party
As part of control 02-Feb Partially Vendor Only 40% of the
procurement process completed work is completed
50% of the work by deadline. Change
should be completed request required to
by 2nd bring project back
Feb,2020(assumed) on track

Work performance Information for this project

50% of the project work was agreed to be completed by 2nd Feb,2020 but as per project work
performance data only 40% could be completed and a change request is required now to
bring the status of the project back on track.

Work Performance Report

Project Title- Upgrade of cars for automobile industry Date- 2nd Feb, 2020

Project Manager- Mr. Sam Sponsor- Mr Mr. Rakesh Sinhania

Accomplishments for the reporting period

1. Projects work is underway and as per the information gathered 40% of the work is
completed
2. Vendor is doing good work

Accomplishments planned but not completed within reporting period

50% of the project work was supposed to be complted which is not the case.

Action required

Change request is required to bring make project steady once again.

Technique used to bring project back on track

Extra time required to be put in to address the gap in project deliverables as it decided in team
meetings
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E.

A procurement strategy is required once the decision is finalised to made to outsource

materials from outside partners. The following techniques are usually deployed -

1. Delivery methods

Delivery methods are not the same for professional services when
compared with construction projects.

Delivery methods are different for professional services versus

construction projects.
For professional services, delivery methods include: buyer/services
provider with no subcontracting, buyer/services provider with
subcontracting allowed, joint venture between buyer and services
provider, and buyer/services provider acts as the representative.

2. Contract payment types

Contract payment types are not the same as the project delivery methods and
are
coordinated with the buying organization’s internal financial systems. They
include but are not limited to these contract types plus variations: lump sum,
firm fixed price, cost plus award fees and others.

Whereas the fixed-price contracts are suitable when the type of work is
predictable and the requirements are well defined and not likely to change.

3. Procurement phases.

The procurement strategy can also include information on procurement phases.

Information may include the following-

 Sequencing or phasing of the procurement which is nothing but a

description of each phase and the specific objectives of each phase
 Procurement performance indicators and milestones to be used in
monitoring;