CONFIDENTIAL EH/APR 2011/CHE620

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION
COURSE
COURSE CODE
EXAMINATION
TIME
PROJECT MANAGEMENT
CHE620
APRIL 2011
3 HOURS
INSTRUCTIONS TO CANDIDATES
1. This question paper consists of five (5) questions.
2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.
3. Do not bring any material into the examination room unless permission is given by the invigilator.
4. Please check to make sure that this examination pack consists of:
i) The Question Paper
ii) An Answer Booklet - provided by the Faculty
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
This examination paper consists of 5 printed pages
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CONFIDENTIAL 2 EH/APR 2011/CHE620
QUESTION 1
(PO10,CO1,C2,C2,C4,C3)
Managing an engineering project is a very important task for engineers in order to ensure the
success of their business. The project can be a simple process and plant improvement
activity or a complex research and development project with high risk.
a) Explain the meaning of project and give an example.
(5 marks)
b) In continuation of part (a), explain the meaning of project management and give an
example.
(5 marks)
c) Give five (5) differences between project management and general management.
(10 marks)
d) With an aid of a diagram, explain the three (3) goals of a project.
(5 marks)
QUESTION 2
(PO10,CO1,C5,C5,C5)
Your team has been assigned a project on Bioethanoi production from the agriculture
biomass by Asia Biotechnology Group. The information (Level 3) of the project is given as
follow:
Fractional distillation Rice straw
Fermentation Empty fruit bunch fiber
Hydrolysis Corn stover
Biomass pretreatment Sugar cane hamp
a) From the given information, generate a mind map for the production of bioethanoi as
requested by investor.
(6 marks)
b) Organize your mind map into Work Breakdown Structure (WBS) and give an appropriate
identification system.
(6 marks)
c) Discuss how your mind map might be used to assist other project planning activities
such as resource allocation, schedule development and risk analysis.
(8 marks)
Yeast sp.
Invertase
Rhizopus sp.
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CONFIDENTIAL 3 EH/APR 2011/CHE620
QUESTION 3
(PO10,CO1,C4)
An automobile spare part manufacturer has set up a project to develop a new machine for
one of its production line. The engineering department has provided a project proposal that
estimate the following investment requirements:
- An initial investment of RM 300,000 to purchase the new machine.
- An additional cost is needed for installation of the machine and integrates it into the
overall production system. There are three cost categories involved:
(i) Engineering labor cost, estimated to be at 1200 hours at a cost of RM 100/hour.
(ii) Nonengineering labor cost, estimated to be at 3000 hours at a cost of RM
50/hour.
(iii) Assorted material cost, estimated to be at RM 100,000.
The machine has to be overhauled every 2 years, and the cost is estimated to be at RM
20,000 beginning in the fourth year. The machine will not be overhauled in the last year of its
life. The project will start up in the second year, and will achieve up-to-speed level by the
end of that year. Projected manufacturing cost savings and added profits are estimated to be
RM 100,000 in the first year of operation and are expected to peak at RM 250,000 in the
third year of operation, and then to follow the gradually declining pattern as shown in Table
1. Project life is expected to be 11 years. It is estimated that the machine will have a salvage
value of RM 50,000 at the end of operations. If the manufacture has a 10 percent hurdle rate
for capital investment and the rate of inflation is to be about 1.5 percent per year, determine
the Net Present Value (NPV) of the project.
Table 1 Cost saving and added profits of project
Year of production
1
2
3
4
5
6
7
8
9
10
11
Profit (RM)
100,000
230,000
250,000
243,000
227,000
206,000
184,000
159,000
133,000
105,000
80,000
(15 mark)
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CONFIDENTIAL 4 EH/APR 2011/CHE620
QUESTION 4
(PO10,CO1,C1,C5,)
A project manager has several choices on how to meet demands of his/her many projects.
Two simple choices are resource loading and resource leveling.
a) Define resource loading and resource leveling of the project.
(4 marks)
b) Your company has been awarded a cleaning project of a chemical treatment plant. The
project requires workers, supervisors, safety officers and variety of equipments such as
safety cloths, boots, brushes and so on. In order to simplify the matter, we presume that
only labour would be required. Given in Table 2 are details of the activities, durations and
labour requirements. However, due to the limitation of workers, only 4 workers per day
are allowed to complete all the tasks associated with the project.
Table 2 Activity, duration and labour requirements
Activity
A
B
C
D
E
Days
2
5
1
4
2
Workers
2
2
2
2
2
Precedent
A
A
B,C
i) Generate a gantt chart for this project.
(3 marks)
ii) Allocate the resource loading/leveling according to the given data.
(3 marks)
iii) Rearrange the resource loading/leveling chart by considering the limitation of the
workers and give a comment to the new arrangement that has been made.
(10 marks)
QUESTION 5
(PO10,CO1,C2,C3,C4,C4)
The common problem of comparing actual expenditures against budget for a given period of
time is that it fails to consider the actual process made on the project. Thus earned value
analysis is introduced to clarify this problem.
a) Explain the meaning of earned value.
(3 marks)
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CONFIDENTIAL 5 EH/APR 2011/CHE620
b) Using diagrams, explain the followings:
i) Positive schedule variance, negative spending variance,
ii) Negative schedule variance, negative spending variance,
iii) Negative schedule variance, positive spending variance.
(9 marks)
c) A project is in progress and its financial status as at the end of sixth week is given as
follow:
Budget cost = RM 150,000
Actual cost spent = 135,000
Percentage completion = 18%
Determine:
i) Cost and schedule variances.
ii) Cost performance index (CPI) and schedule performance index (SPI).
iii) Estimate to completion (EST) and estimate at completion (EAT).
(6 marks)
d) Define critical ratio and explain why it is important in the earned value analysis exercise.
(2 marks)
END OF QUESTION PAPER
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