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Master of Business Administration- MBA Semester 4
PM0015-Quantitaive Methods in Project Management
(Book ID: B2011)
Assignment (60 Marks)
Note: Answer all questions must be written within 300 to 400 words each. Each Question carries 10
marks 6 X 10=60.
Q1. Explain Business Value Models in detail.
 Balanced scorecard model
 The Treacy-Wiersema model
 The Kano model
Answer. The following business models in detail in the following section:
Balanced scorecard model:
The balanced scorecard model defines four scoring areas for business value and was first published by
Robert S. Kaplan and David P. Norton in an article, “The Balanced Scorecard – Measures that Drive
Performance.”
The model was developed as a replacement for earlier systems; those only included the financial
perspective to measure performance. The business scorecard model is an educational, informational, and
Q2. What is parametric estimating? Explain the steps involved in the development of a parametric
model.
Answer. Parametric estimating:
Parametric estimating is an estimating technique that uses a statistical relationship between historical data
and other variables, such as square footage in construction and lines of code in software development for
calculating an estimate for activity parameters, such as scope, cost, budget, and duration. Parametric
estimating can produce higher levels of accuracy depending upon the accuracy and sophistication of the

2. Q3. What is Capital Budgeting. What aspects of capital budgeting must be considered while selecting a
project?
Answer. Capital Budgeting: -
Capital budgeting is a process used by companies for evaluating and ranking potential expenditures or
investments that are significant in amount. The large expenditures could include the purchase of new
equipment, rebuilding existing equipment, purchasing delivery vehicles, constructing additions to
buildings, etc. The large amounts spent for these types of projects are known as capital expenditures.
Q4. Explain the various expense items in a project.
(List the various expense items in a project
Describe each expense with suitable examples 9 (3 marks for each expense item)
Answer. List the various expense items in a project:
 Direct and indirect costs
 Variable and fixed costs
 Actual and standard costs
Direct and indirect costs
Direct costs are expenses that directly affect the budget of a project. Expenses that are for the express
benefit of the project, and would not be incurred if not for the project, are usually called "direct
expenses." In other words, direct costs can be identified with specific project activities with high levels of
accuracy. For example, if a project organization outsources some of its system development works, the
amount paid to the developer for the development work would be a direct cost. Indirect costs, also known
Q5. Explain Benefit-Cost Ratio Analysis and Break-Even Analysis.
Answer. A benefit cost ratio (BCR) attempts to identify the relationship between the cost and benefits of a
proposed project. Benefit cost ratios are most often used in corporate finance to detail the relationship
between possible benefits and costs, both quantitative and qualitative, of undertaking new projects or
replacing old ones. The ratio is used to measure both the quantitative and the qualitative factors, since
sometimes the benefits and the costs cannot be measured exclusively in financial terms. When possible,
Q6. What are the steps that should be followed to construct a “house of quality”?
(Explain the 5 steps that should be followed to construct a house of quality)
Answer. 5 steps that should be followed to construct a house of quality:
1. Voice of the customer: This step includes determining and identifying the customer’s needs. The
main objective of this step is to translate the needs of every customer into engineering

3. specifications. Customers buy products that have the desired characteristics, and manufacturers
offer the desired characteristics. There should be a proper alignment between the needs of the
customers and the offerings
Summer-2016
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