Saturday 27 October 2018

W7_PieroAnticona_Rebaseline

1)    Step 1- Problem or Opportunity Statement
      The student was not able to follow the planned schedule because he had other commitments and he was not able to accomplish tasks as requested. His mentor required to submit a recovery plan and asked for rebaselining

2)    Step 2 – Feasible Alternatives
For this case, we have two options for rebaselining:
-      -       Rebaseline Option 1: Leave the ACWP and BCWP to date UNCHANGED and only adjust the BCWS Early and BCWS Late Date Curves to reflect the changes. (+/-)
Rebaseline Option 1



-       Rebaseline Option 2: Zero Based Budgeting Method- In this method, we “close out” all the work completed to date and effectively create a new project baseline consisting of the work already done and the work remaining, and use the only known fact- ACWP to date as the starting point for the new project.
Rebaseline Option 2

3)    Step 3- Develop the outcomes for each alternative
For each alternative the outcomes to analyze are:
1.    Rebaseline Option 1
o   Forecast Cost is more realistic than the original baseline

2.    Rebaseline Option 2
o   Forecast Cost is more realistic than the original baseline


4)    Step 4- Selection of the acceptable criteria.
  The following attributes will be considered for the selection criteria:
      Forecast Cost less than 10% of Estimate to Complete (ETC) from original budget


5)    Step 5- Compare the outcomes from each alternative analysis done in Step 3 against the minimum acceptable criteria from Step 4.
     Approved Budget: USD 322,350.00
 Based on the weekly report submitted on Oct 13th,  We can also see that CV is positive and SV is negative. This means that there was an overestimated budget for the activities listed.
Weekly Report Oct 13th




Based on original budget, the remaining budget to complete the activities is:

322,350 (BAC) - 33,910 (EV) = USD 288,440 (ETC)
      Note that actual cost is USD 17,200, less than EV cost. 

When calculating the new forecast based also on the availability of the resource, we estimate the following:

     Actual Cost: USD 17,200

     Cost to Complete remaining activities: USD 57,100

In this case, we have assessed that hours estimated for activities do not exceed hours available from the resource as shown in the following graph. 
Resource Chart



For the two options, we can determine that:

Option 1:  Variation is higher than 10% (57,100 - 288,440 = -231,340) 


Option 2: If we start from zero, then we take the estimated amount as the new ETC, therefore variation is 0. and it is less than 10% as expected. 


6)    Step 6- Selection of the “best”.

As described in Step 5, the best option in this particular case is Option 2. 
Also, in option 1, the adjustment of the Early and Late Curve, will not be like most of rebaselines in projects were the changes produce a jump and increase the ETC and therefore the EAC of the project. In this particular case, it will jump down. 


7)    Step 7- How to plan on tracking/reporting on recommended choice. 

If rebaseline is requested, It is required that scope must be understood clearly and also follow recommendations of four characteristics of a reliable schedule as recommended by GAO in Schedule Assessment Guide. Best Practice 10. Table 2.
1 - Reflecting 
   - Well constructed
   - Credible
   - Controlled

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8)    REFERENCES.
Guild of Project Controls Compendium and Reference (CaR). (2015, November 01). M09-5_project_performance_forecasting_-_rev_1.05.pdf. Figure 27

GAO (United States Governance Accountability Office), 2015, GAO-16-89G Schedule Assessment Guide. Page 153.

Spreadsheet Weekly Report. Piero_W05_Rev 0.PDG.xlsx

Spreasheet GPC-AACE-PMI Certification Prep Course oct26.xlsx

Tuesday 9 October 2018

W3_PieroAnticona_Continuing with company or letting the Office

1)    Step 1- Problem or Opportunity Statement
An owner of a company suddenly suffered angina pectoris and after a week of resting at home, he has decided to analyze if he might continue managing the company for the next five years or might rest at home and anticipate his retirement.
He is running a company for over 40 years. Last 5 years many competitors have appeared and market share is difficult to maintain. He is almost 70 years old, clients are more demanding and stress has increased in the last year, which has influenced his health.
On the other hand, he owns the property where he has built three floors, the building is located in a main avenue of the capital city and he thinks he can rent quickly his workshop (First floor). The third floor is not rented yet but he expects that economic situation in the country improves next years. His son got a mortgage of 15 years for construction of the building. He is still in the second year of his mortgage. Owner expects to have a fair income and cover all his charges at home. You also have to take into consideration that when he retires, he will get a small pension that will not cover all his current charges.

2)    Step 2 – Feasible Alternatives
For this case, as mentioned previously he will analyze
-       Continue Managing the company for five more years
-       Close the company and anticipate his retirement.
In addition, we will add a third option:
-       Sell the building and use the remaining money for his retirement


3)    Step 3- Develop the outcomes for each alternative
For each alternative the outcomes to analyze are:
1.    Continue managing the company
o   Future Income for next five years
o   Future Charges for the next five years
o   Cashflow


2.    Close the company and anticipate his retirement
o   Future income for the next five years
o   Future charges for the next five years
o   Cashflow

3.    Sell the building and use the remaining money for his retirement
o   Future income for the next five years
o   Future charges for the next five years
o   Cashflow



4)    Step 4- Selection of the acceptable criteria.
The following attributes will be considered for the selection criteria:
-      Positive Cashflow each year
-   Net Profit Per Year
-   Taxes
-   VAN
-   Level of stress


5)    Step 5- Compare the outcomes from each alternative analysis done in Step 3 against the minimum acceptable criteria from Step 4.

We are going to use Multi-Attribute Decision-Making methods.
Non Compensatory Models
1.       Dominance


Conclusion
Rent&Ret is eliminated. Sell&Ret Dominates Managing. Sell&Ret could be the best choice

2.       Satisfacing



Conclusion
As Rent & Retirement is already eliminated, Managing could be unacceptable. Therefore Sell & Retirement satisfies as the best choice

3.       Lexicography


Conclusion

Sell&Rent better than Mgmt

Compensatory Models
1.       Non Dimensional Scaling



2.       The additive weighting technique




6)    Step 6- Selection of the “best”.
For the selection of the best, we observe that Selling and Retirement is the best option because it complies with all the acceptable criteria. 
Nevertheless, the owner can decide to stay in charge of the company as long as he can handle stress better.

7)    Step 7- How to plan on tracking/reporting on the recommended choice. 
           If the best option is implemented, it is necessary to confirm the selling price of the building is quite close to the estimate. Also, it is required that charges do not increase or an unknown event does not appear. Otherwise, it will cause an impact on net profit and could not meet acceptable criteria again. It is recommended a monitoring and control of expenses during the year to validate that we are not going to exceed costs and we can maintain net profit positive.  

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8)    REFERENCES.

Sullivan, W. G., Wicks, E. M., & Koelling, C. P. (2012). Decision making Considering Multiattributes. In Engineering Economy (15th ed.). Harlow, England: Pearson Education Limited.

Company X Sells Reports from 2013 to 2018. Excel Spreadsheets. 

Company X Costs Analysis. Excel Spreadsheets.

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