Podcast
Questions and Answers
What is the primary goal of Cost Benefit Analysis (CBA)?
What is the primary goal of Cost Benefit Analysis (CBA)?
- To provide a clear economic comparison between different options. (correct)
- To identify all possible project risks and issues.
- To minimize all project costs regardless of benefits.
- To maximize all project benefits irrespective of costs.
When conducting a CBA, what type of expenses should be considered?
When conducting a CBA, what type of expenses should be considered?
- Both direct and indirect expenses. (correct)
- Only indirect expenses like overhead and management costs.
- Expenses that are easily quantifiable and do not need further calculation.
- Only direct project expenses like labor and material costs.
What is meant by the term 'net benefit' in the context of a CBA?
What is meant by the term 'net benefit' in the context of a CBA?
- The sum total of all project benefits.
- The sum total of all project costs.
- The point at which benefits and costs are equal.
- The difference between total benefits and total costs. (correct)
In what way does the use of a Cost Benefit Analysis influence project decisions?
In what way does the use of a Cost Benefit Analysis influence project decisions?
Besides calculating quantitative values, what additional factors should be considered for a comprehensive CBA?
Besides calculating quantitative values, what additional factors should be considered for a comprehensive CBA?
Which analysis tool is best for comparing economic viability of different solutions?
Which analysis tool is best for comparing economic viability of different solutions?
What is the purpose of conducting an options appraisal?
What is the purpose of conducting an options appraisal?
Which tool is MOST focused on measuring the success of different project strategies?
Which tool is MOST focused on measuring the success of different project strategies?
If a project manager needs to compare multiple options based on various criteria, which tool is most suitable?
If a project manager needs to compare multiple options based on various criteria, which tool is most suitable?
Which analysis method prioritizes the stakeholders' motivation and alignment of options with their needs?
Which analysis method prioritizes the stakeholders' motivation and alignment of options with their needs?
Which of the following describes a systematic approach to problem-solving and decision-making?
Which of the following describes a systematic approach to problem-solving and decision-making?
Which tool facilitates rapid decision-making through continual assessment and adaptation of strategies?
Which tool facilitates rapid decision-making through continual assessment and adaptation of strategies?
Which of the following is NOT a core component of structured analysis of options?
Which of the following is NOT a core component of structured analysis of options?
Flashcards
Cost Benefit Analysis (CBA)
Cost Benefit Analysis (CBA)
A method that compares the costs and benefits of different options to determine the most financially advantageous choice.
Direct Costs
Direct Costs
Costs directly related to a project, like materials and labor.
Indirect Costs
Indirect Costs
Costs indirectly associated with a project, such as overhead or administrative expenses.
Benefits
Benefits
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Decision Matrix
Decision Matrix
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Options Appraisal
Options Appraisal
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Key Performance Indicators (KPIs)
Key Performance Indicators (KPIs)
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Grid Analysis
Grid Analysis
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Expectancy Theory
Expectancy Theory
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Rational Decision Making
Rational Decision Making
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OODA Loops (Observe, Orient, Decide, Act)
OODA Loops (Observe, Orient, Decide, Act)
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Structured Analysis
Structured Analysis
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Study Notes
CMI Level 5 - Conducting a Management Project - Learning Outcome 2.3
- Analysis of Project Options: Use research findings to analyse options to meet the project aim.
Analysing Project Options Tools
- Cost Benefit Analysis (CBA): A financial tool comparing costs and benefits of different options. Identify all costs (direct and indirect), quantify benefits (e.g., increased revenue, cost savings). Use monetary values to calculate net benefit of each option. Consider both quantitative and qualitative factors for a complete evaluation.
- Options Appraisal: Systematically assesses the feasibility and impact of different strategies. List all potential options and evaluate them based on criteria like cost, resource requirements, and expected outcomes. Ensure stakeholder support to align with project goals. Consider both tangible and intangible factors.
- Grid Analysis (Decision Matrix Analysis): Compares multiple options based on various criteria. Create a matrix, assign weights to criteria and score options. Offers structured, objective comparison, especially useful in complex scenarios. Ensures all aspects are evaluated and prevents overlooking critical factors.
- Expectancy Theory: Assesses stakeholders' motivation and expectations, aligning options with their needs. Evaluate each option's perceived value and likelihood of success. Tailors communication and implementation strategies to meet stakeholder needs, enhancing satisfaction and team cohesion. Motivation is tied to individual ideas about intrinsic or extrinsic rewards.
- Rational Decision Making: A structured process to make decisions. Involve problem definition, alternative identification and option evaluation. This ensures data-driven decisions, reduces bias, and makes chosen solutions well-founded. Aims for desired outcomes.
- OODA Loops: Involves four stages: Observe, Orient, Decide and Act. Useful in dynamic environments. Continuous reassessment and adaptation, effective for fast-paced situations. Helps stay ahead of changes.
Analysing Project Options - Step-wise Approach
- Define Aim, Objectives and Criteria: Establish project objectives and create specific criteria for evaluating options (consider e.g., cost, feasibility, risk, and impact).
- Gather and Review Research Findings: Collect data from primary and secondary sources, ensuring data is current, reliable, and relevant.
- Identify and List Possible Options: Brainstorm all potential project strategies, incorporating innovative and conventional approaches.
- Perform Options Appraisal: Evaluate each option's feasibility and impact. Evaluate resource availability.
- Evaluate Using KPIs: Use Key Performance Indicators (KPIs) relevant to the project and measure how each option aligns with these indicators.
- Apply Grid Analysis: Create, score and rank options using weighted criteria.
- Consider Stakeholder Impact Using Expectancy Theory: Assess stakeholder expectations and support for each option, including potential motivational impacts.
- Conduct Cost Benefit Analysis (CBA): Quantify costs and benefits of each option; calculate net benefits to determine economic viability.
- Implement Rational Decision Making: Systematically compare options, selecting the best option based on logical and data-driven analysis.
- Use OODA Loops: Apply the Observe, Orient, Decide and Act method for continuous improvement, using feedback to optimise chosen options.
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