MGT507 Final Exam Revision
Case Study 1:
Flora Park is an entertainment project that was initiated by the Flora Design Company in South
Carolina. It is expected to be completed by five months with 50,000 $ estimated budget, where
10,000 $ should be spent each month.
By the 3rd month and after completing 90% of the work, John - the project sponsor suddenly
decided to stop the funding knowing that only 40,000 $ were spent till this date.
None of the project stakeholders’ efforts has succeeded to resolve the issue since John just left and
refused to discuss the conflict leaving an unfinished project.
Consequently, the project manager asked the financial team members to work effectively, trust
each other and evaluate the status of the project to take the appropriate decision.
a. Describe the way John has resolved the conflict and what professional responsibility he had
b. Calculate and interpret the results:
•
•
•
•
CV Cost Variance
SV Schedule variance
Cost Performance Index (CPI)
Schedule Performance Index (SPI)
In your opinion:
c. Can the project manager update the schedule to close the project?
d. How will this project end?
Solution:
a. John is ending the project through starvation. Starvation: When resources (human resources,
equipment and supplies, or money) are cut off from the project or are no longer provided to the project,
it’s starved prior to completing all the requirements and you’re left with an unfinished project on your
hands. He resolved the conflict through “Withdrawal”. This occurs when one of the parties gets
up and leaves and refuses to discuss the conflict. It is probably the worst of all the techniques
because nothing gets resolved. This is an example of a lose-lose conflict resolution technique.
John has resolved the conflict by abruptly stopping the funding for the project. His professional
responsibility was to communicate and discuss the conflict with the project stakeholders, rather
than leaving the project unfinished without any resolution.
b. Given information:
•
Planned budget (PV) = $50,000
•
Actual cost (AC) = $40,000
•
Earned value (EV) = 90% of PV = 0.9 * $50,000 = $45,000
Calculations:
•
•
•
•
CV = $45,000 - $40,000 = $5,000
SV = $45,000 - $30,000 = $15,000
CPI = $45,000 / $40,000 = 1.125
SPI = $45,000 / $30,000 = 1.5
Interpretation:
•
CV of $5,000 indicates that the project is currently under budget.
•
SV of $15,000 indicates that the project is ahead of schedule.
•
CPI of 1.125 means that the project is earning $1.125 for every $1 spent, indicating good
cost efficiency.
•
SPI of 1.5 means that the project is progressing at a rate of 1.5 times the planned schedule,
indicating good schedule efficiency.
c. The project manager can update the schedule to close the project if all the necessary project
deliverables have been completed and the remaining work can be easily transitioned or
absorbed by other ongoing projects or resources. This would involve conducting a thorough
evaluation of the project’s current status, including the completion of tasks, milestones, and
deliverables. If it is determined that the remaining work is minimal and can be integrated into
other projects or handled by existing resources, the project manager can update the schedule
to reflect this and initiate the necessary steps to formally close the project.
d. Unfortunately, due to John’s decision to stop funding and refusal to discuss the conflict, it is
highly likely that this project will end in an unfinished state. Without the necessary financial
resources and support from the project sponsor, it becomes extremely challenging to continue
and successfully complete the project. The project manager and stakeholders may explore
alternative options such as seeking new sponsors or securing additional funding, but without a
resolution to the conflict, it will be difficult to move forward. Ultimately, the unfinished project
may need to be documented and closed, with any completed work or deliverables being utilized
or repurposed in future projects. This serves as a valuable lesson in the importance of effective
communication and stakeholder management in project execution.
Case Study 2:
Flora Park is an entertainment project that was initiated by the Flora Design Company in South
Carolina. It is expected to be completed by four months with 50,000 $ estimated budget. By the
3rd month and after completing 90% of the work, John - the marketing manager suddenly decided
to pull his team members from this project and assign them to another project in his hometown,
North Carolina. None of the project stakeholders’ efforts has succeeded to resolve the issue since
John just left and refused to discuss the conflict. Consequently, the project manager asked the
financial team members to evaluate the status of the project to take the appropriate decision. The
given data as follows:
Actual value Planned Value
1st month $10,000
$15,000
nd
2 month $10,000
$15,000
rd
3 month $20,000
$15,000
4th month $5,000
a. Describe the way John has resolved the conflict and what professional responsibility he had
b. Calculate and interpret the results:
•
CV Cost Variance
•
SV Schedule variance
•
Cost Performance Index (CPI)
•
Schedule Performance Index (SPI)
In your opinion:
c. Can the project manager update the schedule to close the project?
d. How will this project end?
Solution: