The document provides details about two case studies - the construction of an assisted living facility by Friendly Medical Center and a project selection analysis for Handstar Inc. For Friendly Medical Center, the key constraints for the project are an estimated cost of $8.5-11 million, a 7-8 month time frame, and building a 100-unit assisted living facility. The project is expected to financially benefit Friendly Medical Center. For Handstar Inc., using net present value and weighted factor scoring, the recommended projects are an application for web browsing, a trip planner app, integrating a calendar with email, and enhancing an existing portfolio app. Hiring additional software engineers is justified based on the potential benefits of completing additional high value

1. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
Case Study Analysis for Friendly Assisted
Living Facility and Handstar Inc.
Orbeta, Rowena
DM-1
Dr. Odette Leh V. Caragos
Professor

2. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
Case 1
Friendly Assisted Living Facility
1. Identify as well as you can the three iron triangle constraints for this
project: cost, time, and scope.
In order to have an efficient project implementation and achieve
customer satisfaction, a balance among the cost, time, and scope of the
project should be maintained. The following factors should be taken into
consideration:
A. Cost
The entire project cost is estimated to be between 8,500,000 and
11,000,000 for the facility construction. This includes the cost of the land,
furnishings, and sheltered connection to the hospital. Additional but
minimal cost is also incurred during the planning process.

3. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
B. Time
There is only approximately 7 to 8 months to complete the
construction of the new facility. The project construction can only begin
after the November city elections because two of the Board Members were
running in that election. Furthermore, the Board would like a plan that
would allow the facility to open by July the following year in order to
maximize the trend that many adult and children assist their parents in
finding an alternative to independent living arrangements during the
summer.
C. Scope
The project is to build an assisted living facility on Friendly Medical
Center’s campus. The chosen facility design is a freestanding apartment-
like facility with a sheltered connection to the Hospital. It will have 100
units to be classified into “heavy assisted” for the physically and medically
disabled and “light assisted” for residents that require minor medical and
social interventions.

4. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
Implication:
The executive team is yet to create the complete project plan. The
following challenges may be encountered during the project
implementation:
 Given the time constraint of the project, detailed examination of the
complete project plan may show higher costs needed to complete the
project since manpower resource should be increased to cope with
the limited project period.
 Political disputes can possibly affect the project and may further
delay the execution.
 Social implications can also become a cause of concern for this
matter.
2. Identify the expected benefits of this project for Friendly Medical Center.
The construction of an assisted living facility on the Friendly Medical
Center campus can bring about potential benefits to the hospital in the
areas of financial, marketing, and human resource.

5. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
Areas of
Consideration Benefits
Financial  The facility upon operation can generate between
$9,000 to $12,000 per unit per year and an
estimated net cash flow of $1,500,000 annually.
This amount can be used to suffice for the
decreasing income of the hospital since the hospital
board has control over its subsidiary.
 For short term benefit, cash flow from the assisted
living facility may be used to sustain the operation
of Friendly Medical Center.
 Its long term benefit is its ability to provide shelter
and care for what will be the future clients of the
hospital.
Marketing  The facility is designed to cater wider scope of
patients/residents, it has identified a unique market
segment. It will be the only assisted living facility
that will offer physical and occupational therapy
programs and behavior management programs on
top of the usual services offered by other facilities in
the same industry.

6. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
 Due to the wider market scope of the assisted living
facility, it can attract more patients who could age
in the place until they will be in need of
hospitalization which can be provided by Friendly
Medical Center.
Human
Resources
 Friendly Medical Center is well known for its highly
competent rehabilitation therapy staff and while the
hospital inpatient population is declining, these
competent staff can be re-assigned into the assisted
living facility. This strategy will spare the hospital
from letting go of qualified employees.
3. Comment on the strategic initiatives resulting from the Board’s major
strategic planning retreat. Would you consider this a productive retreat?
The strategic planning retreat of the Board of Directors can be
considered as a productive retreat. On that retreat, it was decided that the
short-run initiative is to be more cost-effective in service delivery while the
long-run strategy is to develop new programs and services that will
capitalize on the existing assets of the hospital. On this premise, Fred
Splient was able to develop his idea on creating an assisted living facility.
The proposal addresses both the short run and long run strategies crafted

7. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
during the retreat which is an indication that the retreat was effective
because it facilitated the conception of a novel project.
4. What “project selection” procedure was used here? How common do you
think this is? How wise do you think this is?
The project selection process is a combination of Sacred Cow and
Operating/Competitive Necessity. The proposal to establish an assisted
living facility came from the CEO, Fred Splient M.D. His position somehow
may have influenced the Board of Directors’ decision to approve the
concept and present a comprehensive plan. However, majority of the
decision also emanated from the fact that Fred Splient was able to present
a feasible idea. It is not to be overlooked that Fred have employed the
services of a Business Development Team to prepare a rough estimate of
the potential return on the investment. After careful investigation and
assessment of available data and resources, Fred and his team was able
to come up with a business plan which was enough to successfully
convince the Board of Directors that the creation of the assisted living
facility is necessary in order to support the continuity of operations in the
Friendly Medical Center.

8. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
Case 2
Handstar Inc.
1. Which projects would you recommend Handstar pursue based on the NPV
approach?
Project 1: Integrate
Calendar App with E-
mail App Present Value
Project 2: Update
Expense Report App Present Value
Project 3: Enhance
Existing Portfolio
Tracking App Present Value
Software Development Time 1250 400 750
Rate of Software Developers (per hour) 52 52 52
Initial Fixed Investment 65,000.00 20,800.00 39,000.00
Year 1 750,000.00 669,642.86 250,000.00 223,214.29 500,000.00 446,428.57
Year 2 675,000.00 538,105.87 262,500.00 209,263.39 525,000.00 418,526.79
Year 3 607,500.00 432,406.50 275,625.00 196,184.43 551,250.00 392,368.86
Net Present Value 1,575,155.23 607,862.11 1,218,324.22
Project 4: Develop
Spreadsheet App Present Value
Project 5: Develop
App for Web
Browsing Present Value
Project 6: Trip
Planner App Present Value
Software Development Time 2500 1875 6250
Rate of Software Developers (per hour) 52 52 52
Initial Fixed Investment 130,000.00 97,500.00 1,300,000.00
Year 1 1,000,000.00 892,857.14 2,500,000.00 2,232,142.86 2,500,000.00 2,232,142.86
Year 2 1,100,000.00 876,913.27 2,875,000.00 2,291,932.40 2,625,000.00 2,092,633.93
Year 3 1,210,000.00 861,254.10 3,306,250.00 2,353,323.44 2,756,250.00 1,961,844.31
Net Present Value 2,501,024.51 6,779,898.70 4,986,621.09
Net Present Value Hours Needed
Project 5: Develop App for Web Browsing 6,779,898.70 1875
Project 6: Trip Planner App 4,986,621.09 6250
Project 1: Integrate Calendar App with E-mail Ap 1,575,155.23 1250
Project 2: Update Expense Report App 607,862.11 400
Total 13,949,537.13 9775

9. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
Using the Net Present Value Approach, Handstar Inc. should pursue the
development of the Application for Web Browsing, the Trip Planner Application,
the Integration of Calendar App with the E-mail App, and the updating of the
Expense Report Application.
As shown in the solution above, the Web Browsing App has the highest
NPV followed by the Trip Planner App and the integration of the Calendar App
with the E-mail App respectively. When done together, the three projects would
require a total of 9,375 software development hours. Handstar Inc. have a
capacity of 10,000 software development hours, which is composed of 4 software
developers who work 2,500 hours annually. The development of the three apps
will leave 625 free hours for the software developers. The remaining hours will
not be enough to do the project with the next highest NPV however, to maximize
these remaining hours it is advisable to pursue the update on the Expense
Report App which only requires 400 hours bringing the total number of software
development hours of the 4 projects to 9,775. These projects also have an
accumulated Net Present Value of 13,949,537.13. The four projects is the best
possible combination when NPV and software development hours are taken into
consideration.

10. CAPITOL UNIVERSITY
GRADUATE SCHOOL
GS32-PROJECT MANAGEMENT
2. Assume the founders weigh a project’s NPV twice as much as both
obtaining/retaining a leadership position and making use of the Web. Use
the weighted factor scoring method to rank these projects. Which projects
would you recommend Handstar pursue?
The tables above show the weight of each project when Net Present Value,
Leadership Position, and Web Usage are taken into consideration. Furthermore,
the weight of importance for the NPV of the project is twice as much as the other
Criterion 1 2 3 4 5 6
Net Present Value 2,000,000 and below 2,000,001-3,000,000 3,000,001-4,000,000 4,000,001-5,000,000 5,000,0001-6,000,000 above 6,000,000
Leadership Position VeryLow Probability Low Probability Moderate ModeratelyLikely Almost Certainly High Probability
Web Usage None Little Mild Moderate Extensive OverlyExtensive
> If X represents the importance weight of Leadership Position, then the formula to be used is: 2X + X + X = 1.0
> The value of X is 0.25
Scores
Table 1. Criteria Scales and Equivalent Scores
Projects NPV(0.50)
Leadership
Position (0.25) Web Usage (0.25) Total
Project 1: Integrate Calendar App with E-mail App 0.5 1 1 2.5
Project 2: Update Expense Report App 0.5 1.25 0.5 2.25
Project 3: Enhance Existing Portfolio Tracking App 0.5 1.5 1 3
Project 4: Develop Spreadsheet App 1 0.75 0.25 2
Project 5: Develop App for Web Browsing 3 0.25 1.25 4.5
Project 6: Trip Planner App 2 0.5 1.25 3.75
Table 2. Weighted Total Scores for Each Project
Criteria (and Weights)

11. CAPITOL UNIVERSITY
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two factors. It can be seen in Table 2 that the Web Browsing App, Trip Planner
App, Calendar App with E-mail App, and the enhanced Portfolio Tracking App are
the top 4 projects with the highest scores. This implies that the 4 apps are the
more feasible projects to pursue when Net Present Value, Leadership Position,
and Web Usage are the factors considered. Handstar Inc. should pursue these
projects for the current year.
3. In your opinion is hiring an additional software development engineer
justified?
With the current software development capacity of Handstar Inc. of 10,000
hours it can be inferred that the firm is only capable of executing 4 projects
during the year unless additional software development engineers are employed.
Using the Net Present Value Approach, feasible projects to be undertaken are
the development of the Application for Web Browsing, the Trip Planner Application,
the Integration of Calendar App with the E-mail App, and the updating of the
Expense Report Application. Using the Weight Factor Scoring Method, the Web
Browsing App, Trip Planner App, Calendar App with E-mail App, and the enhanced
Portfolio Tracking App are feasible projects. In both cases, two other projects
cannot be pursued with its current capacity but the combined Net Present Value

12. CAPITOL UNIVERSITY
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of these projects is fairly huge. The Spreadsheet App and the Portfolio Tracking
App have a combined NPV of 3,719,348.73 while the Spreadsheet App and
Expense Report App have a combined NPV of 3,108,886.62. Furthermore,
Handstar Inc. only need to add an additional cost of 157,300 to 260,000 to
complete the other two projects. Therefore, hiring additional software engineers
are justifiable since its benefits outweigh the costs.