Project Management
Assignment One
Conveyor Belt Operations
Assignment One
Submitted by:
Jacqueline Conticello
Project Management
Jacqueline Conticello
Page 1 of 22
Project Management
Assignment One
Table of Contents
Introduction
3
Discussion
1.0 Scope Statement
4
2.0 Stakeholder Management Strategy
7
3.0 Benefit Analysis
8
4.0 Work breakdown structure and bottom up budget
11
5.0 Risk Analysis
12
6.0 Gants Chart and Critical Path
14
7.0 Cost Baseline Including Contingencies
18
8.0 Revised Cost Baseline
19
Jacqueline Conticello
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Project Management
Assignment One
For the project we have to install a conveyor belt for a cross docking distribution centre in
order to increase operations efficiency and effectiveness, while staying within time constraints.
Jacqueline Conticello
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Project Management
Assignment One
1.0 Scope Statement
1.1 The project owner, sponsors, and stakeholders



Owner would be the person/entity that owns the facility
The sponsors would be the corporations that benefit/use the facility
The stakeholders would be individuals who have invested in the expansion.
1.2 The problem statement
There are too little bays for the influx of goods coming in and out of the facility.
1.3 The project goals and objectives
Increase capacity to allow more goods to come in and out of the current facilities.
1.6 The project deliverables






Greater truck capacity; as trucks will be coming from opposing side of the facility
Reduce the time it takes for the goods to be loaded onto the trucks
Reduce production costs, e.g. will be able to hire less employees
More agile deliverables
Allows for a more flexible work environment
Will be able to have a more diverse product base
1.4 The project requirements
1.0
2.0
3.0
Build support structures
1.1 Knockout wall
1.2 Install support – lintel
1.3 Render
Floor preparation
2.1 Grind floor
2.2 Install electrics below concrete
2.3 Install belt bolts
2.4 Concrete floor
Belt Base
3.1 Configure
3.2 Fix to floor
3.3 Connect
Jacqueline Conticello
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Project Management
4.0
5.0
Assignment One
Conveyor
4.1 Configure
4.2 Fix to base
4.3 Connect
Conveyor belt operational
5.1 Wire-up conveyor
5.2 Test conveyor
1.5 Milestones
 Floor preparation
 Belt base
 Conveyor
 Converyor belt operational
 Test conveyor
1.6 Cost estimates
Estimated cost = labour + materials + equipment
Estimated cost = 15840 + 93900 + 15000
Estimated cost = $127,440
The project is estimated to cost $127,440, but due to unknown and known risks it may cause
the project cost to rise.
1.8 Assumptions






We assume that prior to starting the project it is approved by the council
We assume that we can contract are own services
We assume we won’t require any more materials then we budgeted for
We assume we can keep the materials on site as security will be there 24/7
We assume the initial building must meet all local building codes
We assume that we have full access
1.9 Boundaries


We must finish on the 12th of June, as the company will need to be up and running by
the new financial year
We are limited to the size of the lot, as well as to working around the initial building
Jacqueline Conticello
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Project Management
Assignment One
1.10 Constraints



The neighbourhood where the project is being constructed has a reputation for
vandalism and destruction of property. Security patrols will be required as to
safeguard the integrity of the structure
We are limited to working on the project from Monday to Friday, as well as an eight
hour working day. Although if we want employees to work on the weekend or do
overtime this will cost extra money
We will priorities staying within schedule and will crash the project if necessary
1.11 Project acceptance criteria



The completion of the five milestones
o Floor preparation
o Belt base
o Conveyor
o Converyor belt operational
o Test conveyor
The conveyor belt must be functional by the end of the project and all operations must
be up and running
All equipment and materials must be removed from the premises, as to allow easy
access for the trucks
Jacqueline Conticello
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Project Management
Assignment One
2.0 Stakeholder management Strategy
Jacqueline Conticello
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Project Management
Assignment One
3.0 Benefit Analysis
3.1 The benefits the new facilities will provide are:








Greater truck capacity; as trucks will be coming from opposing side of the facility
Reduce the time it takes for the goods to be loaded onto the trucks
Reduce production costs, e.g. will be able to hire less employees
More agile deliverables
Allows for a more flexible work environment
Will be able to have a more diverse product base
The Net Present Value, Internal Rate of Return and Rate on Investment will support
the projects acceptance
The project is a good investment for the owner and will start making a profit at the
end of year 5
3.2 Net Present Value
Calculations for the net present value: Project cost 150,000. The projected return for 5 years is
36,000, 36,000 and 42,000, 42,000, 80,000 respectively. The project has a discounted cash flow
rate of 3%.
NPV = -150,000 + AT1 + AT2 + AT3 + AT4 + AT5
T1 = 36,000 / (1.03)^1 = 34951.45631
T2 = 36,000 / (1.03)^2 = 33933.45273
T3 = 42,000 / (1.03)^3 = 38435.94969
T4 = 42,000 / (1.03)^4 = 37316.45601
T5 = 80,000 / (1.03)^5 = 69008.70275
NPV = -150,000 + AT1 + AT2 + AT3 + AT4 + AT5
NPV = -150,000 + 34951.45631 + 33933.45273 + 38435.94969 + 37316.45601 + 69008.70275
NPV = 63646.01749
NPV = $63,646.02
Jacqueline Conticello
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Project Management
Assignment One
At the end of year five we would start seeing a return, having made a profit of $63,646.02,
thus justifying the cost of the project.
Accumulative
cost value
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Project Management
Assignment One
3.3 Internal Rate of Return (IRR)
NPV = -150,000 + AT1 + AT2 + AT3 + AT4 + AT5
T1 = 36,000 / (1.10)^1 = 32727.27273
T2 = 36,000 / (1.10)^2 = 29752.06612
T3 = 42,000 / (1.10)^3 = 31555.22164
T4 = 42,000 / (1.10)^4 = 28686.56513
T5 = 80,000 / (1.10)^5 = 49673.70584
NPV = -150,000 + AT1 + AT2 + AT3 + AT4 + AT5
NPV = -150,000 + 32727.27273 + 29752.06612 + 31555.22164 + 28686.56513
+ 49673.70584
NPV = -56733.87438
NPV = -$56,733.87
Jacqueline Conticello
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Assignment One
Jacqueline Conticello
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4.0 Work breakdown structure and bottom up budget
Project Management
Project Management
Assignment One
5.0 Risk Analysis
Source
Probability Impact
Priority
Strategy
Responsibility
Review
Mitigation: Hire an
electrician
Mitigation: prior approval
from the board
Mitigation: Clarify the
importance of reporting
Acceptance
Procurement
Officer
Steering
committee
HR Manager
Weekly
HR Manager
Weekly
Mitigation: communicate,
feedback
Avoid: develop good
communication avenues
Mitigation: Hold daily
meetings
Mitigation: create clear
deadlines
Avoid: clearly explain the
deliverables
Avoid: plan ahead of time
HR Manager
Weekly
Project
Manager
Project
Manager
Project
Manager
Project
Manager
Project
Manager
Project
Manager
Operations
Manager
Scheduler
Weekly
Internal
1) Conveyor
Breakdown
2) Scope Change
2
5
10
2
5
10
3) People Failing to
report in
4) Employees getting
sick
5) Employee Resistant
3
3
9
3
2
6
3
3
9
6) Communication
bottlenecks
7) Managerial faults
3
4
12
3
3
9
8) Lags in decision
making
9) Poor deliverable
definition
10) Limited capability
2
3
6
2
4
8
3
3
9
11) Lack of
accountability
12) Lack of storage
2
2
4
3
2
6
13) Restrictive
workspace
4
3
12
Jacqueline Conticello
Avoid: have a clear
contract
Avoid: obtain additional
space, shipping container
Avoid: carefully plan
resources
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Monthly
Weekly
Daily
Weekly
Monthly
Weekly
Weekly
Weekly
Daily
Project Management
Source
Assignment One
Probability
Impact
Priority
Strategy
Responsibility
Review
14) Weather
2
2
4
Operations
Manager
Project
Manager
Project
Manager
Procurement
Officer
Project
Manager
stakeholders
Daily
6
Mitigation: Check
forecast and plan ahead
Mitigation: have a clear
contract
Mitigation: pay early or
forward buy
Mitigation: be updated of
new technologies
Avoid: Be aware of new
and current legislation
Transfer: stakeholders
15) Contractors not
complying
16) Exchange rate
service
17) Changing
technology
18) Legislative
constraints
19) Environmental
factors
20) Social changes
3
4
12
5
2
10
3
2
6
2
5
10
2
3
1
2
2
Acceptance
Monthly
4
4
16
3
4
12
3
5
15
2
4
8
Mitigation: alternative
suppliers, keep informed
Mitigation: alternative
suppliers, keep informed
Mitigation: weekly
meetings
Mitigation: communicate
3
2
6
Mitigation: security
1
5
5
Mitigation: vary project,
seek expertise, jolly
Project
Manager
Project
Manager
Project
Manager
Steering
committee
Steering
committee
Operations
Manager
Project
Manager
21) Delaying materials
and shortages
22) Delaying
Equipment
23) Stakeholder
expectations
24) Varying
stakeholder support
25) Vandalism
26) Lack of approval
External
Jacqueline Conticello
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Weekly
Weekly
Monthly
Monthly
Weekly
Daily
Daily
Weekly
Monthly
Daily
Weekly
Project Management
Assignment One
6.0 Gants Chart and Critical Path
Jacqueline Conticello
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Project Management
Assignment One
Jacqueline Conticello
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Project Management
Assignment One
Jacqueline Conticello
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Project Management
Assignment One
Jacqueline Conticello
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Project Management
Assignment One
7.0 Cost Baseline Including Contingencies
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Assignment One
Jacqueline Conticello
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8.0 Revised Cost Baseline
Project Management
Project Management
Assignment One
The review date for the project is on the 15th of May before Render.
8.1 Earned Value (EV):
EV = 3360 +960
EV = $4,320.00
8.2 The Planned Value (PV) of the project for the 15th of May:
PV = EV + 960
PV = 4320 + 960
PV = $5,280
8.3 Budgeted At Completion (BAC):
BAC = 3360 + 960 + 960 + 1440 +960 +1440 + 480 +1440 +480 + 960 + 480 + 480 +960 + 480 +
480 + 480
BAC = $15,840.00
8.4 Actual Cost (AC):
AC = 6000 + 2200
AC = $8,200.00
8.5 Cost Variance (CV):
CV = EV – AC
CV = 4320 + 8200
CV = $12,520.00
Jacqueline Conticello
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Project Management
Assignment One
8.6 Scheduled Variance (SV):
SV = EV – PV
SV =4320 - 5280
SV = - $960.00
The project is behind schedule and is over the budget
8.7 The Cost Performance Index (CPI) for the build support structure activity:
CPI = EV / AC
CPI = 3360 / 6000
CPI = 0.56
8.8 The Cost Performance Index (CPIc) for the project:
CPIc = EVc/Acc
CPIc = 4320 / 8200
CPIc= 0.52682927
CPIc = 0.53
8.9 Schedule Performance Index (SPI)
SPI = EV / PV
SPI = 4320 / 5280
SPI = 0.818181
SPI = 0.82
Jacqueline Conticello
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Project Management
Assignment One
8.10 Estimate to complete based on atypical variance
ETC = BAC – EVc
ETC = 15840 – 4320
ETC = $11,520.00
8.11 Estimate to complete based on typical variance
ETC = (BAC –EVc) / CPIc
ETC = (15840 – 4320) / 0.53
ETC = 11520 / 0.53
ETC = 21735.8491
ETC = $21,735.85
8.12 The estimated cost at completion predicting the variance will continue:
ETC + AC
21735.8491 + 8200
= 29935.8491
= $29,935.85
8.13 Crashing:
As the project has gone over time by seven days we decided to crash “Install support –lintel,”
“Render” and “Concrete floor,” as they not only reduce the project by seven days, but are the
cheaper option compared to “Grind floor” and “Install electrics below concrete.” Even though
“Fix to floor” and “Fix to base” are relatively cheap to crash we chose not to crash them, as we
wanted the option to crash them to be available later on in the project if the variance
continues.
Jacqueline Conticello
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