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AN INTRODUCTION TO DIFFERENTIATED LEARNING TOOLS
Participants in flexible learning programs have limitations on the nature of the
time they can spend on learning. Typically they are employed fully or partially,
pursuing higher studies or have other social and familial responsibilities.
Availability of time is a great constraint to these students.
To aidthe participants,we have developedfour unique learningtools as below:
Bullet Notes : Helps in introducing the important concepts in each unit
of curriculum, equip the
student during preparation of
examinations and
Case Studies : Illustrate the concepts through real life experiences

Workbook : Helps absorption of learning through questions based on reallife nuggets
PEP Notes :Sharing notes of practices and experiences in the Industry will help the student to
rightly perceive and get inspired to learn concepts at the cutting edge
application level.placementinterviews
Why are these needed?
 Adults learn differently from B. School or college going
students who spend long hours at campus.
 Enhancing analytical skills through application related learning
kits trigger experiential learning
 Availability of time is a challenge.
 Career success increasingly depends on continuous learning
and success
What makes it relevant?

How is it useful?


Where does this lead to?
As and when you get 5 to 10 minutes you can read one of these and absorb and comprehend.
Spending more time is your choice.
You can use the time in travel, waiting for meetings, lunch time, small breaks or at home
usefully.
Through these tools, the learning bytes are right sized for ease of learning for time challenged
participants.
The content starts from practice and connect to precept making it easy to connect to industry
and retain.
They can be connectedto continuous assessment process of the academic program.
Practitioners can use their real life knowledge and skill to enhance learning skills.
Immediate visualization of the practical dimension of the concept will offer a rich learning
experience.

Easier to move ahead in the learning process.

Will facilitate the student to complete the program earlier than
otherwise.Helpsstay motivated and connected.
When is it useful?


Project & Operations
Management
Workbook
i

© The ICFAI Foundation for Higher Education (IFHE),
Hyderabad, April, 2015. All rights reserved
No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in
any form or by any means – electronic, mechanical, photocopying or otherwise – without prior permission in writing
from The ICFAI Foundation for Higher Education (IFHE), Hyderabad.
Ref. No. P&OM-WB-IFHE – 042015
For any clarification regarding this book, the students may please write to The ICFAI Foundation for Higher
Education (IFHE), Hyderabad giving the above reference number of this book specifying chapter and page number.
While every possible care has been taken in type-setting and printing this book, The ICFAI Foundation for Higher
Education (IFHE), Hyderabad welcomes suggestions fromstudents for improvement in future editions.
Our Email id:cwfeedback@icfaiuniversity.in
ii

INTRODUCTION
Participants in ICFAI University Programs are eager to learn more from practice. They realize that
application orientation can enhance their learning and subsequent usage of management precepts and
practices. Picking out the principle behind real world events is critical to this learning, as also identifying
the alternative/solution using the principle. Towards this end the institution has reengineered the
Workbook.
The Workbook is a set of questions which typically illustrate a real life context from contemporary
corporate happenings and then poses a question to the student for reflection. The narration of question
helps the reader to reinforce the concept and facilitates the student to enhance his/her capabilities in
analyzing and interpreting the conceptual frameworks.
The examples depicting the names of existing persons or companies are taken from news
clippings/published articles from various public domain websites or website of respective companies.
Since live examples reinforce the understanding of the students, the possible responses are connected to
the concepts taught directly or indirectly. In many cases the alternatives provided are choices in a work
situation based on alternative approaches.
These questions provoke the learner to start thinking from the application side and connect to the
knowledge that he will use to solve. Practitioners can connect better thereby improving the learning
experience. This form of assessment improves learning while assessing whereas the conventional form is
more about assessment of learning.
The learning outcomes expected are:
The examples are linked back to application of theoretical knowledge in the illustrated real-time
situation. This facilitates the student to develop analytical approach in similar or related situations.
Application based approach which enhances absorption and retention significantly.
Exposure to the current incidences and situations in relation to important concepts of the
subject. The Workbook format is also used for Assessment.
v

DETAILED CURRICULUM
UNIT 1: INTRODUCTION TO PROJECT MANAGEMENT
Definition of Project - Project Characteristics - Project Parameters - Relationship between Project Parameters -
Classification of Projects - Definition of a Program - Project Management - Project Management – Relationship
with Other Management Disciplines - Relationship between Project Management and Line Management - Project
Stakeholders - Organizational Influences - Socio-economic Influences - Environmental and Legal Influences -
Project Phases and the Project Life Cycle
UNIT 2: PROJECT IDEA GENERATION AND SCREENING
Generating Project Ideas - Creativity and Idea Generation - Scanning the Environment - Searching for New Project –
Ideas - Initial Screening - Project Rating Index - Sources of Positive Net Present Value
UNIT 3: MARKET AND TECHNICAL ANALYSIS OF PROJECTS
Market and demand analysis - Technical Analysis
UNIT 4: FINANCIAL ANALYSIS OF PROJECTS
Project Cost - Means of Financing the Project - Working Capital Requirements and Financing - Time Value of
Money - Costs of Different Sources of Finance - Evaluation of Project Investments - Risk Analysis of Project
Investments - Social Cost Benefit Analysis (SCBA)
UNIT 5: PROJECT SELECTION
Criteria for Project Selection Models - Project Selection Models - Analyzing the Uncertainty of a Project - Project
Proposal
UNIT 6: MANAGEMENT OF PROJECT SCOPE
Project Initiation - Defining Project Deliverables - Scope Planning - Approval of POS - Project Definition Statement
- Scope Verification - Scope Change Control
UNIT 7: IDENTIFYING PROJECT ACTIVITIES
Activity Definition - Work Breakdown Structure - Developing a WBS - Test for Completeness of Decomposition of
Activities - Approaches to Defining Deliverables in the WBS - Representing the WBS
UNIT 8: ACTIVITIES: SEQUENCING, ESTIMATING DURATION, AND SCHEDULING
Fundamentals of Project Network Diagrams - Activity Sequencing - Activity Duration - Schedule Development -
Techniques for Schedule Development - Schedule Control
UNIT 9: PROJECT REVIEW
Importance of Project Review - Types of Project Reviews - Project Review Stages - Project Status Review Meetings
- Advantages of a Project Status Review Meeting - Types of Project Status Meetings
UNIT 10: PROJECT CONTROL
The Fundamentals of Project Control - The Objectives of Control - Reasons for Measuring Duration and Cost -
Deviations - Control as a Function of Management - Control vs. Risk - Balancing the Control System - Control of
Change and Scope Creep - Progress Reporting System - Types of Project Status Reports - Graphical Reporting
Tools - Project Status Review Meetings - Managing Risk - Managing Quality
vi

UNIT 11: PROJECT COST MANAGEMENT
Process of Cost Management - Resource Planning - Cost Estimating - Cost Budgeting - Cost Control - Cost
Overruns and their Implications
UNIT 12: PROJECT RISK MANAGEMENT
Definition of Risk - Tolerance for Risk - Definition of Risk Management - Certainty, Risk, and Uncertainty - Risk
Management Methodology - Insurance for Projects
UNIT 13: PROJECT QUALITY MANAGEMENT
Definition of Quality - International Quality Standards - The Cost of Quality - Project Quality Management -
Concepts - Project Quality Control Tools - Process Capability - Acceptance Sampling -Quality Circles - Just-In-
Time Management - Total Quality Management
UNIT 14: PROJECT AUDITING
Project Evaluation and its Purpose - Project Auditing - Construction and Use of the Audit Report - Responsibilities
of the Auditor - The Project Audit Life Cycle - The Essentials of an Audit - Performance Measurement
UNIT 15: PROJECT CLOSING
Closing a Project - Ways of Closing a Project - Reasons for Terminating an Unsuccessful Project - The Process of
Closing a Project
UNIT 16: OPERATIONS MANAGEMENT AND OPERATIONS STRATEGY
Operations Management Decisions - The Historical Evolution of Operations Management - Computers and
Advanced Operations Technology - Operations Strategy as a Competitive Weapon - Elements of Operations
Strategy - Developing an Operations Strategy - Financial and Economic Analysis in Operations
UNIT 17: FORECASTING DEMAND
Forecasting in Operations - Forecasting Components - Demand Forecasting Process - Forecasting Methods -
Selecting a Forecasting Method - Measures of Forecasting Accuracy - Monitoring and Controlling Forecasts
Methods
UNIT 18: ALLOCATING RESOURCES TO STRATEGIC ALTERNATIVES
Allocation Decisions in Operations Strategy - Linear Programming in Operations Management - Formulation of
Linear Programming Problems - Solution of Linear Programming Problems - The Transportation Problem in Linear
Programming
UNIT 19: DESIGN OF PRODUCTION PROCESSES
Process Planning and Design - Major Factors affecting Process Design Decisions - Types of Process Designs -
Process Planning Aids - Selecting the Type of Process Design - Measurement of Operations Performance:
UNIT 20: FACILITY LOCATION AND LAYOUT
Importance of Location - Factors Affecting the Location Decisions - General Steps in Location Selection and -
Location Decision Process - Location Evaluation Methods - Facility Layout - Basic Layout Formats - Developing a
Process Layout - Developing a Product Layout - Developing a Cellular Manufacturing Layout - Japanese
Approaches and Trends in Manufacturing Layouts - Service Facility Layout
UNIT 21: AGGREGATE PLANNING AND CAPACITY PLANNING
Overview of Planning Activities - The Aggregate Planning Process - Strategies for Developing Aggregate Plans -
Aggregate Planning Techniques - Master Production Schedule - Implementing Aggregate Plans and Master
Schedules - Capacity Planning
UNIT 22: FUNDAMENTALS OF INVENTORY CONTROL
Purpose of Inventories - Inventory Costs - Inventory Systems - Economic Order Quantity Model - Inventory
Classification Models
vii

UNIT 23: PURCHASE MANAGEMENT
Importance of Purchasing - Organizing Purchasing - Responsibilities of a Purchase Manager - Purchasing Process -
Duties of Buyers - Make-or-Buy Analysis - Ethics in Buying - Integrity Pact and its implementation:
UNIT 24: MATERIALS MANAGEMENT
Necessity of Materials Management - Functions of Materials Management - Materials Management Technology -
Materials Management Techniques - ERP in Materials Management
UNIT 25: OPERATIONS SCHEDULING
Purpose of Scheduling - Scheduling Methods - Scheduling Activities - Scheduling by Type of Operations -
Scheduling Personnel in Service Operations - Scheduling Techniques
UNIT 26: ENTERPRISE RESOURCE PLANNING
Evolution of ERP - Business Process Reengineering - Business Modeling for ERP - ERP Implementation - ERP and
Competitive Advantage
UNIT 27: SUPPLY CHAIN MANAGEMENT
Business Drivers in Supply Chain Management - Principles of Supply Chain Management - Forces Shaping Supply
Chain Management - Supply Chain Management Framework - Customer Focus in Supply Chain Management -
Electronic Supply Chain Management
UNIT 28: JUST-IN-TIME (JIT) MANUFACTURING SYSTEM
The Concept of the JIT System - Advantages ofJIT Systems - Characteristics of JIT Systems
UNIT 29: PRODUCTIVITY AND QUALITY MANAGEMENT
Productivity - Evolution of Quality Management - Strategic Role of Quality - Role of Inspection in Quality Control -
The Cost of Quality - Statistical Concepts in Quality Control - Acceptance Plans - Computers in Quality Control -
Concept of TQM
UNIT 30: FACILITIES AND MAINTENANCE MANAGEMENT
Facilities Management - Necessity of Maintenance Management - Types of Maintenance - Economics of
Maintenance - Evaluation of Preventive Maintenance Policies - Modern Approaches to Preventive Maintenance -
Recent Trends in Maintenance
UNIT 31: TRENDS IN OPERATIONS TECHNOLOGY
The Changing Landscape of Operations Technology - Manufacturing Intelligence - Flexible Manufacturing Systems
Intelligent Value Chains and Supply Chains - Sustainability and Operations Technology - Operations Technology
and Competitive advantage - Innovation in Operations - Customization and Operations Technology - Disruptive
Technologies - Technology Trends for Indian Companies in Infrastructure and Operations - Role of Information
Technology - ERP and Operations
UNIT 32: GLOBALIZATION AND OPERATIONS MANAGEMENT
Meaning and Significance of Globalization - Emerging trends in Operations Management - Globalization of
Manufacturing Operations - Globalization of Servicing Operations - Location choices in operations strategy -
Globalization of operational competencies, resources and processes - Key imperatives for business leaders -
Globalization and Sustainability - Challenges in Managing Globalization - New National Manufacturing Policy -
Corporate Social Responsibility (CSR) - Approaches to Globalization
UNIT 33: SUSTAINABILITY AND OPERATIONS MANAGEMENT
Meaning and Concept of Sustainability - Globalization and Sustainability - Sustainability objectives - Sustainability
and Operations Planning - Sustainability and Supply Chain Management - Sustainability and resource management -
Sustainability and operations stakeholders - Sustainability and Innovation - Framework for sustainability strategy
viii

Contents
Multiple Choice Questions
Unit 1: Introduction to Project Management 9
Unit 2: Project Idea Generation and Screening 11
Unit 3: Market and Technical Analysis of Projects 13
Unit 4: Financial Analysis of Projects 15
Unit 5: Project Selection 17
Unit 6: Management of Project Scope 19
Unit 7: Identifying Project Activities 21
Unit 8: Activities: Sequencing, Estimating Duration and Scheduling 24
Unit 9: Project Review 27
Unit 10: Project Control 30
Unit 11: Project Cost Management 33
Unit 12: Project Risk Management 36
Unit 13: Project Quality Management 39
Unit 14: Project Auditing 42
Unit 15: Project Closing 45
Unit 16: Operations Management & Operations Strategy 47
Unit 17: Forecasting Demand 49
Unit 18: Allocating Resources to Strategic Alternatives 51
Unit 19: Design of Production Process 54
Unit 20: Facility Location and Layout 56
Unit 21: Aggregate Planning and Capacity Planning 59
Unit 22: Fundamentals of Inventory Control 61
Unit 23: Purchase Management 64
Unit 24: Materials Management 67
Unit 25: Operations Scheduling 70
Unit 26: Enterprise Resource Planning 73
Unit 27: Supply Chain Management 75
Unit 28: Just-in-Time Manufacturing System 78
Unit 29: Productivity and Quality Management 80
Unit 30: Facilities and Maintenance Management 82
Unit 31: Trends in Operations Technology 84
Unit 32: Globalization and Operations Management 86
Unit 33: Sustainability and Operations Management 88
iii

Multiple Choice Answers and Explanations
Unit 1 Introduction to Project Management 82
Unit 2 Project Idea Generation and Screening 83
Unit 3 Market and Technical Analysis of Projects 84
Unit 4 Financial Analysis of Projects 85
Unit 5 Project Selection 86
Unit 6 Management of Scope 87
Unit 7 Identifying Project Activities 88
Unit 8: Activities: Sequencing, Estimating Duration and Scheduling 89
Unit 9 Project Reviews 90
Unit 10 Project Control 91
Unit 11: Project Cost Management 92
Unit 12: Project Risk Management 93
Unit 13 Project Quality Management 94
Unit 14: Project Auditing 95
Unit 15: Project Closing 96
Unit 16: Operations Management & Operations Strategy 97
Unit 17: Forecasting Demand 98
Unit 18: Allocating Resources to Strategic Alternatives 99
Unit 19: Design of Production Process 101
Unit 20: Facility Location and Layout 102
Unit 21: Aggregate Planning and Capacity Planning 103
Unit 22: Fundamentals of Inventory Control 104
Unit 23: Purchase Management 105
Unit 24: Materials Management 106
Unit 25: Operations Scheduling 107
Unit 26: Enterprise Resource Planning 108
Unit 27: Supply Chain Management 109
Unit 28: Just-in-Time Manufacturing System 110
Unit 29: Productivity and Quality Management 111
Unit 30: Facilities and Maintenance Management 112
Unit 31: Trends in Operations Technology 113
Unit 32: Globalization and Operations Management 114
Unit 33: Sustainability and Operations Management 115
iv

MULTIPLE CHOICE QUESTIONS
UNIT 1: INTRODUCTION TO PROJECT MANAGEMENT
ECIL and BEL were the manufacturers of Electronic Voting Machines (EVMs). They were entrusted
with the task of developing a paper trail mechanism for the General Elections 2014. The objective was
to ensure that the voting was as per the voter’s choice without any scope for suspicion. Why the two
companies took up the task through a project management approach?
it is a unique and emergency task to be completed against tight schedules
it is a top priority requirement of the Election Commission of India
it has a limited budget
it is insisted by the Supreme court
the two companies have adequate number of project managers
Tata Group entered civil aviation market in collaboration with Singapore Airlines. During the initial
stages of JV, both the partners identified project managers and tasked themto draw specification for the
joint venture project. According to you what should be the major specifications of such a massive
project?
a. expected time of
completion c. location of the
project e. clarity of objectives
b. cost competitiveness of the proposed low cost
airlines d. cost estimates and sources of funding
Wipro was assigned the job of implementing Enterprise Resource Planning (ERP) in some of the
government departments. Wipro planned to handle it as a project instead of a product. Why?
a. this is an activity which called for multi-disciplinary approach and intense interactions at various
b.
d.
levels
it is with strict delivery schedules c. it has resourceconstraints
its production line is overbooked e. it has no othercontracts
Megabucks, a renowned global coffee chain launched its operations in India. The company thought of
ensuring local flavor to its menu, suiting the tastes of the vast and heterogeneous population of the
country. A project management approach was suggested to ensure effective market entry and
penetration. What might be the key reason behind this recommendation?
failure of initial venture in Russia taught it bitter lessons
the combinations of menu are different from region to region and place to place
there are lot of uncertainties and ambiguities
Megabucks want to be a market leader
it cannot reenter if it fails once
Aqua safe, a startup company planned to launch an innovative product in mineral water category. The
idea was to bottle it in such a way that there was no waste generated- even the container can be eaten
like the cone wafer of ice cream. What might be the starting point of the project proposal?
project plan detailing the know-how, resource requirements and implementation schedules
b. supply plan strategy c. make/buy decisions
d. manpower strategy e. selection of a celebrity to inaugurate
9

Operations Management: Workbook
GMR took up the project of building a new International airport in a major city. Based on its experience
with the airports already constructed both within and outside India, what project parameters the
company might have included in its project management strategy?
quality, cost,scope,time and resources
quality, cost,time and manpower
resources,cost,time and quality
major customer requirements of quality, cost and delivery schedules
quality, cost,flexibility, time and resources
TCS allocated substantial amount towards its Corporate Social Responsibility activity and proposed to
construct toilets for girls in selected thousands of schools in the country. Similarly, L&T wanted to
construct toilets in a large number of schools. Both the companies proposed to spend few hundred
crores under this CSR activity. Why do they treat it as a programme and resort to project management
strategy?
it is in response to the Prime Minister’s request
it is a major programme with a unique goal and a definite time schedule
it is not a product of TCS and L&T
it is a charity programme of the company for publicity
it supports all the project parameters
Public and the Non-Governmental Organizations (NGOs) were protesting against establishing power
plants at some of the places even though there is acute shortage of power in the country. What were the
concerns of the people while establishing such projects?
the projects are time taking and power problems are immediate
the children may not get employment
real estate prices may shoot up along with cost of living
there may be apprehensions about problems of displacement, pollution and rehabilitation
politicians may grab all opportunities
When McDonald’s, decided to enter Indian market, it opted for a project management approach. At the
strategy level, they planned to work with all project stakeholders to make sound decisions. At the
restaurant level, McDonald’s is focused on energy conservation, sustainable packaging, and waste
management. What is the primary objective behind its project management strategy when the company
decided to enter Indian market?
a. to ensure entry as scheduled
c. to ensure sustainable operations
e. to provide reasonable quality ofservice
b. to maximize profit
d. to enlarge the outlet network
L&T was assigned the task of executing the Hyderabad Metrorail Project. During a detailed review, it
was observed that the project is progressing as per planned requirements and will meet the expectations
of public and the government. What according to you was the primary objective of L&T in managing
the project?
to get more projects from the Government
to meet the expectations of important stakeholders without time and cost overruns
to avoid criticism from public
to minimize wastage of resources
to complete the project when skilled labour is available
10

UNIT 2 PROJECT IDEA GENERATION AND SCREENING
‘Clean and Green’ company took up a challenging project to increase the green carpet in
Hyderabad at the rate of 20% every year over the next 5 years. It created an exclusive division to
handle it as a project. The project started with idea generation. Who according to you was primarily
responsible to generate ideas and submit a proposal to the management?
a. owners ofthe company
c. project manager
b. top management
d. workers
e. uppliers and customers
Unique Identification Authority of India (UDAI) selected a private company to assist in the Aadhaar
project of the Government of India. The task was to scan the environment and collect biometric data
from all targeted population. But the contracted company failed to meet the expectations and caused lot
of delays inviting public criticism and ultimately, disqualification. What according to you should have
been done by the company before bidding for the project?
a. thorough SWOT analysis
c. provision offunds
b. ensuring political support
d. recruitment of skilled workforce
subcontracting the job
Wasteman was company established to provide guidance on waste management. The Municipal
authorities assigned it the task of submitting a proposal for waste management initially in the state
capital and subsequently in other districts. If you were the project manager, what creative approach you
would have suggested for the project?
outsource operations to contract labour from other states
forcing residents to follow a colour coded 4 bin systemas in developed countries
educate people on reuse,recycle and alternative use methods
stop all industrial activity
punish all those who generate waste
Friendly India Company wanted toparticipate actively in India’s sanitation infrastructure projects.
Accordingly, the project manager was asked to generate ideas and propose to the management. Which
of the following, according to you was not an important source of ideas for identifying projects?
a. similar projects undertaken earlier within
India c. major suppliers of inputs
b. potential customers
d. governmental agencies
competitors
Windmill, a Norwegian company intended to establish wind power projects in India. They tasked the
project manager with the initial responsibility of computing the Project Rating Index to facilitate initial
screening of project ideas. What are the steps involved in computing Project Rating Index?
assign adhoc values to each parameter and compute
identify relevant factors, assign weights and compute the index
decide a scale, based on past experience, assign a value
take a survey of all project managers, verify with customers and compute
start with an index based on experience and then fine-tune it as the project progresses
11

Hyderabad Metrorail Project was a prestigious project taken up to decongest traffic. In view of the
multi-disciplinary activities and multi-agency coordination involved, timely execution of the project
was a challenging task. What according to you could be the most important reason for successful
progress of the project?
a. past experience
c. more efficient project management
e. skilled workforce
non interference by thegovernment
timely allocation of resources
Illuminate India was a company offering solar power solutions. The company was confident of techno-
commercial viability of solar technology, which according to many was not commercially viable. The
project manager preferred to consider the Net Present Value (NPV) while screening project ideas. In
such a project, which factor influences the NPV most for a solar power project for village level
illumination?
a. government policies b. superiority oftechnology
c. product differentiation d. project manager’s abilities
e. sources of funds
The delay in the Ganga Cleaning Project was severely criticized by the Supreme Court. The new
government formed by Mr. Narendra Modi in 2014 accorded it a priority and constituted a committee to
expedite the project. There are many techniques for promoting creativity and idea generation as a
starting point for project identification. Which group creativity method do you suggest as the best
technique for the project?
a. brainstorming b. delphitechnique
c. nominal group technique d. taskforce method
none of the above
Powerful Cleaning company realized that many countries were generating enormous value out of
garbage dumps. They thought that the growing concern of garbage clearance in India could be tackled
by generating power from garbage with the support of local community and municipality. What is your
opinion about creativity in project management?
creativity is not relevant to project management
b. group creativity is better than individual creativity
c. project manageris responsible forcreative ideas d.creativity delays project execution
creativity impedes innovation
Zero Risk company wanted to establish a power plant. As a project manager, you had to take care of
risk in undertaking the project right at the project screening level. Which was the most important risk
factor you considered before starting the project?
risk due to shortage of fuel
risk due to inadequate skilled manpower
risk because of technology
risks because of high absenteeismof contract labour
risks associated with waste management and environmental compliance
12

UNIT 3 MARKET AND TECHNICAL ANALYSIS OF PROJECTS
Empower, a startup company wanted to establish an Inverter manufacturing facility to provide
uninterrupted power supply to households. The project manager has to conduct market and demand
analysis. What are the essential aspects of such an analysis for the project?
a. estimate the size of the market, patterns of demand and level of competition
d. identify vendor network, in-house and outside production facilities
identify sources of funding, ideal location and customer concentration
locate areas of chronic power shortage,talk to residents
availability of technical manpower and contract labour
Jai Jawan was a defence equipment manufacturer to Indian defense services. What according to you should
be the aspects to be addressed primarily as a part of technical analysis from social and environmental
perspective for this project?
profitability, employment of children of ex-servicemen
reliability, safety and environmental compliance
training the soldiers in the factory and in the field
timely completion and delivery of equipment
assurance of technical support and maintenance during war time
Gangajal was a company planned to enter growing drinking water market with the introduction of a water
purifier into the market. Which was the best way to conduct market analysis in urban India?
door to door survey on water drinking habits
collecting primary and secondary data on sources of drinking water
concentrating on upper strata of the society who use water filters
focusing on poor communities who do not have clean drinking water
hiring people from competitors in water filter market
Coca Cola company proposed to make huge investments in the new state of Telangana. The project manager
was asked to conduct a demand analysis. What is the most important factor to consider in demand
analysis from the perspective of sustainable operations?
changing patterns of consumption of soft drinks
environmental impacts due to soft drinks
availability of power and water required for the project
changing attitudes of people towards soft drinks
buying power of people targeted for soft drinks
Sometime during 2014, the local print media in Hyderabad covered the progress of Metro Rail project. L
&T, the company executing Hyderabad Metrorail Project was asked to redesign the original route to
protect heritage structures. This called for conducting a situational analysis. According to you who are
the most important stakeholders with whomthe project manager interacts to conduct situational analysis
for the project?
a. experts on Metrorail systems
c. public around the Metrorailcorridor
e. government agencies
b. suppliers of coaches
d. financiers funding theproject
13

GovSec Company specialized in providing security solutions for government installations. They
decided to participate in a tender to develop a high-tech security system for the state secretariat. The
project manager was asked to identify the essential features. What was the critical aspect to be
considered in such a sensitive project?
feasibility in terms of techno-commercial viability of the security solution
reliability and maintenance of the system
alternative arrangement when the systemfails
provision to the VIPs to operate outside the purview of the system
environmental impact of the security system
Election Commission of India selected a company for providing videography and online transmission to
concerned authorities during the election process.The real-time data generated by the company was
a. secondary data captured live
c. primary data on voting process captured live
missing names from voters’ lists
Combination ofprimary and secondarydata
Primary data on celebrities voting
Ecocar, a company specializing in car accessories,intended to introduce a portable car vacuumcleaner.
What primary requirements must have been considered for a sample survey for market analysis?
defining the target market and selecting the sample at petrol stations
developing a questionnaire and training surveyors
recording and interpretation of information on car owners
sending a questionnaire to car mechanics
collecting information from spouses ofcar owners
The project manager of Newtrendz Company intended to forecast the demand for technical fabrics in
India by obtaining data from secondary sources, market survey and market description. What was the
main purpose of these techniques?
to penetrate the market for technical fabrics
to estimate the costs of the project
to establish cause and effect relationships
estimate special skills required for technical fabrics
to establish the techno-commercial feasibility of such a project
Cleancity, a major contractor for municipal corporations throughout the country was entrusted the task
of conducting a Technical Analysis to ensure speedy cleaning and upkeep of roads in Hyderabad. What
aspect should be prioritized in the Technical Analysis?
assembling, modeling and prototype testing of the planned equipment
basic manufacturing operations in the equipment suppliers premises
detailed design review of the cleaning process
market demand for the equipment proposed
feasibility of cleaning all roads overnight
14

UNIT 4 FINANCIAL ANALYSIS OF PROJECTS
⸀Ā ЀĀ ĀĀĀ ⸀ Ā ⸀ Ā ⸀ Ā ⸀
odernize India specialized in the construction of IT Parks across the country. The IT technology and
associated infrastructure dynamically changes. Against this background, if the IT Park was to be
established as a Greenfield venture, what were the major aspects to be addressed in the financial
analysis of the project?
a. evaluation of capital costs,operating costs and revenues b. mapping the cash flows
c. profitability d. opportunities forcollaboration
availability of a supplier network
A Japanese company decided to establish a manufacturing facility for Defence Electronics in India and
assigned the task of estimating the project cost to an Indian consultancy firm. What are the major
components of capital costs in such a project?
costs due to roads, buildings , greenery around the plant and machinery
costs due to rehabilitation of people
costs due to power, water and transportation system
salaries of workforce
costs due to civil works, land acquisition and site development, plant and machinery
A Singapore company in a joint venture with an Indian company decided to tender for the proposed
Mumbai-Delhi industrial corridor. It was proposed to be taken up through PPP model due to paucity of
funds with the Government. What is PPP?
a. private partnership and profitability
c. public-private partnership e.
projects for public sector
public participation in private projects
projects for private sector
Kalmart ultimately got approval to start its operations in India. Being a retail supermarket, working
capital requirements were to be very high. What were the major heads of working capital for Kalmart.?
logistics management of global supplier network
inventories in all global and local locations of Kalmart
operating expenses of supply chain management for the proposed venture
capital costs and operating expenses of the project
selling expenses and discounts from to time
Malaywood, a major global furniture manufacturer planned to open facilities in India. The project
manager was asked to compute the time value of money for the Project India. What should be the focus
of the project manager?
present value of future cash flows from Project India
future value of cash flows from the outlets
present value of equity of the shareholders in the venture
present value of working capital and its comparison to other global outlets
value of likely inventories in India
15

Mega City project was expected to receive Rs. 100 crore, Rs. 200 crore and Rs. 300 crore at the end of
the first, second and third year respectively at a discount rate of 8%. The present value of cash streamto
be received for the next three years is: (Hint- it is computed as 100/1.08 + 200/ 1.08 square + 300/ 1.08
cube)
a. Rs. 108 crore
c. Rs. 324 core
b. Rs. 216 crore
d. Rs. 502.2 crore
e. none of the above
Sportshoes, a famous multinational company specializing in shoes for various sports, decided to
establish retail stores in India, it asked the project manager to evaluate returns fromproject investments
by using discounted cash flow criterion of Net Present Value. The investment is Rs.500 crore and the
required rate of return is 10 per cent after taxes. What will be the pattern of appropriate cash flows over
next two years? (Apply the formula: 500+500/1.1 + 500/1.21)
a. 510, 550 b. 550, 600
c. 510, 520 d. 520, 550
e. 530,550
Indian Solar is a startup company with a capital base of Rs.100 crore out of which equity is Rs.75 crore
and debt is of Rs.25 crore. The cost of equity is 12% and the post-taxcost of debt is 8 per cent. What is
the cost of capital for the company? (Cost of capital= equit* (cost of equity )+ debt/ * cost of debt)
a. 12% b. 8%
c. 10% d. 11%
9%
A Chinese airliner wanted to enter Indian civil aviation market. The project manager had different
options- each involving the same investment (Rs.10,000 crore) offering different outcomes based on
risk perception estimated from cordiality of relations between the two countries. If the company did not
want to take any risk which option was the best?
outcome is Rs.10000 crore with a probability of 0.5
outcome is Rs. 5000 crore with a probability of 1
outcome is Rs. 9000 crore with a probability of 0.9
Volkswagen planned to establish an automobile assembly plant in India. Being a champion of
sustainability, it sought a social cost-benefit analysis from a private agency. What according to you
come under social costs?
compensation for displaced communities, costs to contain air and water pollution
costs due to land acquisition, employment of local communities and pollution control
compensation for displaced communities and due to community health programmes
all costs due to social and environmental aspects
environmental and community health costs
16

UNIT 5 PROJECT SELECTION
Ā Ȁ ⸀Ā ⸀ Ā ⸀ Ā ⸀ Ā ⸀
aul, a well known London-based NRI, planned to invest in Indian infrastructure projects especially in
power sector. He asked the project manager to provide necessary inputs for project selection. What is
the most important consideration in project selection for establishing a power plant in India?
project cost and return on investment for different sources ofenergy
availability of resources including manpower for thermal, nuclear, wind and solar
availability of technology,including use of indigenous technology
ability to execute with the skills and technical capabilities of local population
legal and regulatory framework governing the project and the compliances
Ā Ȁ ⸀Ā ⸀ Ā ⸀ Ā ⸀ Ā ⸀
Irumala Tirupati Devasthnam wanted to streamline queue management to provide easy darshan to
pilgrims, by launching a major project to achieve this. What should have been the key criterion for this
project?
realism and capability to streamline the queue system
cost of the proposed project
flexibility and ease of use by the staff and pilgrims
easy computerization and on line monitoring
reduction of influx of pilgrims
Ā Ȁ ⸀Ā ⸀ Ā ⸀ Ā ⸀ Ā ⸀
hink tank, a newly formed R&D company was in the business of taking up R&D in Electronics for
various organizations on a turnkey basis. Being a start up, manpower was limited and the skills and
capabilities were not fully known even though some experienced designers were recruited. Requests for
proposals were pouring in. The management decided to adopt Q-sort Technique for selecting projects.
What was the reason?
it provides a list of proposals in alphabetical order for sorting
it enables analysis by a group of designers and prioritizing based on set criteria
it has no numeric computations involved
uncertainties and risks will be less
it does not call for external help to evaluate proposals
Ā Ȁ ⸀Ā ⸀ Ā ⸀ Ā ⸀ Ā ⸀
overnment of India decided to support hydro-electric power projects in Nepal. It is called a ‘sacred
cow’ model of project selection. Why?
it can be sacrificed when anotherattractive project comes
the generated electricity can be taken from Nepal
the project yields high returns
the cow is sacred in Nepal
the project enjoys the support at the highest level and is sure of successfulcompletion
Ā Ȁ ⸀Ā ⸀ Ā ⸀ Ā ⸀ Ā ⸀
omfort Zone, a totally risk averse company in real estate business was initiating ventures that yielded
reasonable returns for the investments made. They depended upon Average Rate of Return before
launching the project. ARR will be on high when
there are steady bookings and project executed as per committed schedules
money is pumped at regular intervals and payments realized after handling over
capital investments are amortized over a long period

rarly bird incentives are removed
low cost materials are used in construction
17

Global Security Systems got an order for installing a security system for the embassy office in Kabul.
The company was aware that the uncertainty in completing the project was very high in view of the
volatile situation prevailing. As a project manager, how you intend to address the problem of
uncertainty?
the project is abandoned
uncertainty is converted into risk and then a decision is taken
subjective decisions are taken and the project will be initiated
major works for execution are outsourced to locals
the entire project is covered under heavy insurance
Special Export Zones (SEZs) were being promoted by the Government of India to promote export of
Indian products and services. However, all the projects involved uncertainty and risk. What situation
will be faced by a Defence manufacturing unit in a SEZ?
certainty situation due to brand India image
uncertainty situation because India’s export record in defence equipment is poor
risky because the global defence market is characterized by high-technology which the country does
not possess
the quality and compliance record of Indian organizations is not registered abroad
could be a successfulventure if confined to manufacturing with off-set arrangement
The Space Applications Division of a Public Sector company was asked to submit a project proposal for
developing an Antenna for ISRO prestigious Chandrayaan-II Project. What according to you should be
the key aspect of the proposal?
outcomes and outputs as applicable to the requirements of ISRO
major risks and costs in executing the project as per launch schedules
the opportunity to enter global markets
rstimate of resources and time required for timely execution
identification of interface issues with all the agencies involved- end users,vendors and governmental
agencies
Automobile sales started picking up. All manufacturers wanted to grab the opportunity by expanding
their facilities. Indian Car asked its project manager to submit a project proposal for the expansion of its
existing plant at the same location. What should be the contents of such a proposal?
technical nature of the proposed expansion including differentiation
plan of implementation-milestones and schedules for launching the models
plan for promoting the models as most suitable to Indian conditions
identification of the skills required and the sources of manpower
capital costs involved
Whizkids, a well established company encouraged innovative project ideas. An enthusiastic young
engineer proposed an idea for preventing train accidents in India. The management decided to
encourage the engineer but insisted on conducting a detailed Window-of-Opportunity Analysis before
the project proposal was approved for full scale development. What was the main focus of this analysis?
are there any manufacturers across the world for such a product?
analyzing the current production process and fitting the new innovative idea
changes required for the existing process
skills and people required for the new proposal
how the proposed solution can satisfy end use requirements
18

UNIT 6 MANAGEMENT OF PROJECT SCOPE
Sure Success,a project consultancy firm was engaged by a state government to prepare project scope
for establishing a smart city. What are the key contents of the project scope?
description of end products and/ordeliverables for a smart city in measurable terms
activities and assignments of people/agencies involved in the smart city project
resources required including financial and human resources for the project
what takeaways the public will have from a smart city
goals and objectives of the smart city project
After PM’s visit to Japan in 2014, Government of India decided to introduce Bullet Trains between
Mumbai and Ahmadabad with the help of Japan. A project manager was identified in Prime
Minister’s office to hold discussions with concerned agencies for arriving at the objectives of the
project. What are the main advantages of such discussions?
evaluating benefits of introducing bullet trains to the two countries
determining the goals and objectives behind the bullet train project
negotiating the pricing proposals of the project
to identify trade offs for the project
positioning manpower for the project
A newly formed state decided to promote Food Processing Industry in a big way. It created a separate
ministry and asked the secretary to define project deliverables. What will be the most important
deliverable in the proposed project of Food Processing?
a. creating market for agricultural products
c. exporting to earn foreign exchange
popularizing ‘made in India’ across the world
ensuring livelihood to the rural population
bringing latest technology to Indian villages
Thirst quencher, an NGO was established to ensure supply of safe drinking water to villages. While
performing scope planning in this project, which tool is most appropriate?
analysis of the safety requirements of drinking water
expert judgment of urban population already enjoying safe drinking water
cost/benefit analysis of the project including the process and waste disposal
use of Programme Evaluation Review Technique to realize the project
critical Path Method to identify critical stages in project implementation
Perfect Defence Pvt. Ltd. was assigned the task of design, manufacture and supply of a critical
requirement for Indian Defence. With a view to closely monitor the project status and ensure its timely
completion, the client asked the contractor to submit a Work Breakdown Structure (WBS). What
should be the main focus of WBS?
project Overview Statement and Project Definition Statement for the defence project
deliverable-oriented list of elements covering the entire defence project
different stages of product design and the limitations of the design
types of concessions and changes to be sought at various stages ofthe defence project
allotment of the work to different members of the project team as it is a defence project
19

Space Craft was a company dedicated to the design and manufacture of products for Indian Space
programmes. It had to periodically conduct Product analysis. It is a technique for understanding the
features and functions of a product. What are the techniques generally used by the project manager to
conduct product analysis?
value analysis for the proposed project
quality function deployment for the end use requirements of the deliverables
ABC analysis of the project
cost-benefit analysis of the space progrmme
variance analysis for the project schedules
An NRI from Singapore planned to establish a 500MW Solar Power Plant in one of the power-starved
states before expanding it to the entire country. The scope of the project was documented in the Project
Overview Statement (POS). What might be the essential parts of a POS for this high priority project?
definition of the solar project, goals and objectives and success criteria
risks and obstacles involved in addition to the requirements at a. above
the responsibilities of all stakeholders in the power project
technology aspects ofthe solar power plant
deliverables of the project after completion
WIPRO asked its project manager for ERP implementation in a steel plant to prepare Project Definition
Statement (PDS) and Project Overview Statement (POS). The project manager, after detailed study
found that the two documents were very important and are different. In which important way both these
documents are different?
POS is prepared by the Management and PDS is prepared by the project manager
POS is prepared by external consultants and PDS is prepared by the project manager
client participates while preparing POS while PDS is a totally internal document
structurally they are totally different for an ERP project
for ERP implementation, there is no structure for POS but PDS is well structured
Uranium Corporation of India Ltd. was assigned a project for Uranium mining in Himachal Pradesh.
The company prepared the scope of the project. It had to be finalized after taking all necessary
approvals. In such a project, which stakeholders should be consulted for the verification and smooth
completion of the project.
department of Atomic Energy as UCIL comes under DAE
state government as the proposed mining is in Himachal Pradesh
ministry of Environment and Forests for environmental clearance
all stakeholders associated with the project as there is fear of radiation
social activist groups,opposed to nuclear related activity
Execution of Hyderabad Metrorail Project was likely to be delayed because of a possible change in
scope of the project. The likely change involved rerouting in areas to protect heritage structures. What
was the most significant implication of this change on project scope?
public displeasure as they are eagerly awaiting its launch
criticism by the opposition for delay in the project initiated by their government
danger of short closing the project by the contractor, L&T
time and cost over runs due to delay in the project
no major implications even if it is delayed
20

UNIT 7 IDENTIFYING PROJECT ACTIVITIES
LED Lighting in Hyderabad was assigned high priority and was contracted to Fillips, the pioneer of
street lighting. The company asked its project manager to prepare a list of project activities as per the
project scope. The document should illustrate how each activity contributes to the whole project, in
terms of the budget, schedule and performance. It should also list the vendors/subcontractors. Which
document the project manager has to prepare?
project Overview Statement (POS) of lighting requirements and coverage
project Definition Statement (PDS) covering the total area and number of poles
work Breakdown Structure (WBS) from pillar to post of the project
SMART defining objectives specific, measurable, achievable, repeatable and tangible
project Objectives Statement as to what the project intends to achieve
Safe Transport was a company engaged in the development of software for monitoring container
movement across the globe. The Global Head of the project asked all his country managers to prepare
activity flow diagrams for their respective countries. The activity flow diagram must essentially depict
the duration each related activity in the country takes so that total duration for the entire project can
be computed at global level
the resources required for each activity for each country to understand critical paths
sequence of activities in the transportation system, identifying unique features of each country
skills and capabilities for every activity in container transportation in each country
the risks associated with container transportation like national calamities
Smart City is a new thinking at the Governmental level. Many software companies found business
opportunity in this area. Be Smart, a software company asked its project manager to undertake
decomposition of the project for a major metropolitan city. What will be the primary focus of
decomposition?
to understand whetherthe project is technically viable or not
to understand if the software project is commercially viable
to identify the skills and other resources required for executing the project
to study the feasibility of outsourcing the project
to estimate the duration, costs and the resources required
Easy Projects, a consultancy firm took up a project to create a work breakdown structure for a complex
project. Which is the most important characteristic of WBS that all the project managers of Easy
Projects will have to focus?
ability to produce a unique and tangible deliverable that is verifiable
ability to differentiate activities from each other activities
amenability for decomposition logically from higher levels to lower levels
to facilitate reviews at specific stages of the project
the firm should be able to execute the project
21

65. Apollo global, a multinational hospital chain decided to implement Hospital Management software to
improve patient care efficiency. It was assigned to a project manager to develop a Work Breakdown
Structure, who in turn resorted to a top-down structure. Why they preferred a Top-down structure?
the activities of the hospital are
performed in a command and control way the WBS development should be in line with top
management’s strategy
it is easy to decompose to lower levels till the work is sufficiently well defined
to make it easy to conduct test of completeness
bottom-up approach is not suitable for hospital environment
Global Taj, a multinational hotel chain planned to set up a chain of hotels in India. Its project manager
planned to prepare an appropriate WBS. Which is the most important guideline for decomposition of
the project?
all activities like customer service, food quality and ambience are qualitatively measurable
each activity in the hotel must have clearly defined start/end events
the hotel chain project must have clear and quantitatively measurable deliverables for each of its
activities like the number and location, facilities and capacities etc.
the inter-dependence among various departments of the project at location level as well as at the
overall chain level should be settled in advance
profitability must be ensured at every proposed location of the hotel
Speedy projects, an established company in the domain of railway projects was requested by a Chinese
company to prepare a project scope, defining the deliverables and building the WBS for the Bangaluru-
Chennai railway project. The WBS had to be subjected to the Test for Completeness. What is the
purpose of this test?
to ensure that all identified deliverables like engines and coaches are unique and measurable
to ensure that the project is commercially viable considering the royalties involved for foreign
technology,consultancy and execution
to facilitate certification of the project and associated deliverables, by the railway authorities
to verify whether any activity in the proposed railway project is missed out
to eliminate non-value added activities, which are generally associated with railway projects
Cleantech India, a start up established by a group of young engineers to produce and supply clean
drinking water to all engineering colleges, decided to follow a noun-type approach for WBS
development. What is the essential feature of a noun-type approach?
the WBS for the project is amenable for physical and functional decomposition of the end product
and associated processesin the clean water project
the project deliverables in the clean water project are defined in terms of actions to be performed
follows a design-build-test-implement approach to realize the water project
it enables logical decomposition as clean water is a health related requirement
it is focused on student health by ensuring successfulcompletion and commissioning of the clean
water project
22

GMR followed a verb type approach while executing the Hyderabad Airport Project to define the
project deliverables in WBS development. Which of the following represents the verb-type approach
in WBS development?
a. design-test-implement of the airport project
c. design-build-test-implement the entire airport project
e. outsource various modules of the airport project
b. design-build and handoverthe airport
d. design and implement the project
Mars Mission, a prestigious Space Programme of the Government of India, selected various public and
private sector units for the timely execution of the project. ISRO decided to follow an Organizational
approach to define project deliverables. In an Organizational approach, the project deliverables are
defined in terms of
organizational units such as project team, critical design review section, client- interface division
involved in the project
critical process areas like rapid-prototyping, vendordevelopment for the project
decision points in the organizational hierarchy of the project team
deliverables like the modules, sub-systems and systems of the project
the best-in-class practices followed by developed countries for their Mars Mission projects
23

UNIT 8 ACTIVITIES: SEQUENCING, ESTIMATING DURATION AND SCHEDULING
L&T, the main contractor for a major Metrorail Project (MR) signed an MOU with the government
wherein the deliverables and time schedules were clearly defined. The state government decided to
protect the heritage structures likely to be destroyed due to the project. The COO was asked to
reengineer the project network diagram for the MR project, incorporating the changes suggested by
the state government. What is the major advantage of a project network diagram?
know the revised manpower requirements for the MR project
determining the additional MR project activities and identifying events
providing a pictorial snapshot ofall deliverables of the revised MR project
sequencing,scheduling and controlling the MR project
know the budgetary support required for completion of the project
For the above project, after L&T and the government reached an understanding, the project manager of
L&T prepared the network diagram and resorted to project planning. Having got the network diagram,
which can as well guide the balance project execution, why project planning was also required?
to detail the revised project activities, recomputed the required resources and establish relationships
among activities, which are not covered by the network diagram
to estimate the additional manpower and financial resources required and establish relationships
among all stakeholders of the Metrorail project
to know the exact delivery and project completion times of the Metrorail project as per revised scope
of activity
to compute the profitability of the Metrorail project after the inevitable modifications
to decide whether to continue or abandon the Metrorail project
Polarize Ltd. a software company specialized in offering solutions to banking sector. A project manager
in the company prepared a network diagram for a multinational bank. He plotted the activities and the
start and end times of various activities in a sequence. What symbols might he have used for
representing the activities and the events in the network diagram?
the activities are represented by arrow and events by circles for the software project
an activity is represented by a circle and an event by an arrow in the software project
start and end events linked by an arrow representing the activity
a circle between two arrows representing the beginning and end of the s/w project
two circles and two arrows representing the activities of the software project
Ministry of Petroleum and Natural Gas planned to expand piped gas line scheme for households
progressively throughout the country. The idea was to simplify logistics and offer more efficient
services to the consumers. A project manager was appointed and asked to prepare a project network
diagram with a view to understand clearly the dependencies among all associated activities. What is
project dependency?
it is dependency ofthe gas line project on the stakeholders along the pipe line route
it is the interdependence between the government and the public in the pipe line
it refers to the clearances to be obtained prior to launching the pipeline project
it is the relationship between a pair of activities in the pipe line project
it is project manager’s dependence on the management for resources
24

Government of India launched Aadhaar Card project and created the Unique Identification Authority for
executing the project. The idea was to identify target beneficiaries for the various welfare schemes
launched from time to time. Delay in the execution of the project caused embarrassment to the
government and became a major hurdle for the implementation of welfare measurers to the targeted
population. People were becoming restless for the delay in implementation. What do you call this
dependency?
discretionary as government need not spend until Aadhaarcards are issued
mandatory as it is a committed welfare programme of the Government
voluntary for the government to cancel if delayed further until next elections
coercive because opposition may unpopularise the government
secondary for the public as they are living without these cards anyhow
The State of Telangana launched Integrated Water Grid Project to solve water problems for irrigation,
drinking and other purposes. The government was keen on completing the ambitious project in a time
bound manner as the public in general and farmers in particular are suffering due to the acute water
shortage.For computation of project duration for the programme, which activity is the most significant?
defining the complexity and criticality of the Integrated Water Grid Project activity
estimating resources committed for the Integrated Project
systems and procedures and the control mechanism for the Integrated Project
d sequencing all the activities involved in the Integrated Water Grid project
clearances needed for launching the project as it may involve inter-state issues
BHEL received a major order from NTPC for the supply of equipment to the proposed Thermal Power
Plant. The project manager was asked to estimate the project duration. Among various methods
available, the project manager chose the Delphi method. It is because estimate by Delphi method is
based on
repetitive estimates of the project duration and averaging
consensusthrough an iterative process of discussions in a chosen group
confrontation within the group for the fastest method
cooperation among all team members to accept the project manager’s estimate
coordination among all project groups to arrive at best possible solution
GMR, the contractors for the Hyderabad International Airport were awarded a contract for constructing
another International Airport for the state of Andhra Pradesh. The company was asked to give probable
time estimates for the project. Three Point Method, one of the most popular methods used for such
estimates. Which are the estimates made by this method?
a. optimistic, pessimistic and most unlikely times
c. optimistic, pessimistic and most likely times e.
most likely, most unlikely and average times
Optimistic, realistic and pessimistic times
Pessimistic, realistic and unrealistic times
Clean Hyderabad, a prestigious project of the state government aimed to ensure world class roads by
15th August, 2015. The concerned authorities were asked to undertake ‘schedule development’.
Towards this, the project manager needed to know the documents to be prepared. Which documents
you suggest as the most important?
resource pool description and resource calendar for the Clean Hyderabad project
resource pool description and project calendar for the project
project calendar and resource calendar for the project
project calendar for the Clean Hyderabad project
resource calendar for the Clean Hyderabad project
25

In view of increasing threat perception across the borders, the Ministry of Defence planned for
developing and commissioning an indigenous Aircraft Carrier. It prepared schedules for this complex
project involving multiple design and supply agencies and made it mandatory for all developers and
suppliers to stick to agreed schedules without fail. Heavy penalties including blacklisting the defaulters
were communicated to all suppliers. To facilitate continuous monitoring and control, DRDO chose
Critical Path Method (CPM) to carry out project scheduling. Why is CPM technique appropriate for this
project?
because CPM technique is meant for critical projects
CPM can predict the project duration by localizing the activity sequence with least flexibility
ministry of Defence prescribed heavy penalties for failure to deliver as per schedule
the Critical Path is the shortest path through the network
it is easy to plot network diagram and schedule the intended defence project
26

UNIT 9 PROJECT REVIEW
Vizag-Chennai corridor, a prestigious industrial corridor project was launched with the help of Central
Government. While linking all the ports along the coastal line, it was expected to generate considerable
employment opportunities. It will use state of art technologies and exploit waterways as major
transportation channel to decongest the roads. Timely completion of the project depends upon the
effectiveness of project review mechanism. What are the focused areas of project reviews in such a big
project?
business objectives and goals of the project initiated by the government
strict adherence to the rules and regulations applicable to the project
status,design and processes involved in the project management
disputes between Andhra Pradesh and Tamilnadu on the project
consumption of resources by the project
Indian made, a company was focusing on indigenization of various aerospace equipment being
imported into the country. This was necessitated as 70% of defence requirements were being imported
with perennial dependence for service support. The collaborator asked the project manager to suggest
changes/improvements to an aircraft project to suit the Indian conditions. To achieve the objective of
improvement, he had three available methods for project reviews- status, design and process review
methods. For the project under consideration, which method is the most important?
status Review because if the project status is satisfactory,it can be assured that everything else is
under control
design Review because the sensitivities of the Indian defence environment should be understood and
necessary changes/improvements incorporated
process Review because every activity in the life cycle approach is a process and it is the most
comprehensive review
combination of a and b
combination of b and c
Safe rail, a new venture of a teamof technocrats started with a view to utilize the opportunities provided
by the government’s special attention for modernization of Indian Railways. Indian Railways placed
a trial order for the prototype development and supply of 500 nos. of detection and monitoring
equipment. The project manager was asked to plan for project reviews to ensure that it is progressing
towards achieving the planned objectives. What are the main types of reviews conducted by the project
manager?
a. product,process and customer reviews
c. contract,design and process reviews
b. status,design and process reviews
d. contract, product and process reviews
none of the above
Trendycom was assigned the task of implementing 4G network in Delhi with a view to expand it to the
entire country. The company already executed such projects elsewhere in the world and has readymade
technology. The government wanted the company to ensure its implementation within a year. The
company primarily focused on status reviews. Why?
process reviews of the 4G project implementation as the concentration has to be on timely execution
of a proven technology .
design reviews of the 4 G project as implementation in Indian for the first time may call for design
changes
27

status reviews during the execution of the 4G project because,these reviews reveal any issues
concerning design and process also for which corrective actions can be found
combination of process and design reviews
combination of process and status reviews
Hi-Tech, a company dedicated to executing projects for the strategic sectors of Space, Defence and
Nuclear used a combination of technologies. The management regularly conducted comprehensive
design reviews both internally as well as with end users. What is the essential purpose of design
reviews?
to review the product performance of the high technology project
to ensure that the costs are under control for these high value projects
to know whether the schedules are under control to ensure their scheduled launch
to know the status ofthe project to meet the customer requirements
to decide whether to continue or abandon the critical project as failure may tarnish the image of the
company
Secure Solutions, an electronics company, clinched an order for providing an Integrated Security
System to the Indian parliament. Halfway through the project, after a detailed project reviews, the
company decided to withdraw from the project in view of doubts over its techno-commercial viability.
What could be the main reason for such an unpleasant decision,which may be dangerous for the
company’s image and survival?
project reviews before submission were ineffective
project review after submission of the project proposalwas inadequate
reviews during implementation were ineffective and inadequate
reviews at the end of execution are equally ineffective
reviews right from the beginning of the project were ineffective
BEL and ECIL were the two suppliers of Electronic Voting Machines to the Election Commission of
India. Their use in elections is a mandatory requirement is general elections. In the 2014 General
Elections, Video Cameras were deployed in the polling booths. What could be the main purpose of
installing so many video cameras in the polling booths?
to find out whether the design of EVMs is perfect
determine whether election process is going on as planned
to explore possibilities for improvements in the EVMs
to ensure alignment between design and other operations of EVMs
to prevent rigging of EVMs
Nuclear Power projects in India, which were supplying nuclear power, were based on Uranium. But
their operational efficiency was based on continuous supply of Uranium. Uranium was imported as
indigenous sources were inadequate. After Pokhran nuclear tests, all countries stopped Uraniumsupply
to India affecting these projects. Recently Australia agreed to lift the ban and supply Uranium to India.
This happened because of Prime Minister’s detailedreview of the past, presentand future of Nuclear
Energy. The focus of such a review must be on
to know the present status ofnuclear power and decide policy for the future
to resolve dispute between the developed countries and India on Non-proliferation Treaty
to give assurance to the country that Nuclear power is eco-friendly
to bilateral trade with Australia
to teach a lesson to other countries who imposed sanctions on India
28

Jan Dhan Yojana, a pet project of the Prime Minister aimed to empower population thro comprehensive
financial inclusion. Accordingly, a major initiative was launched on 28th August 2014 to create one
crore bank accounts on a single day. It was achieved as per expectations. Among various review
mechanisms available, concerned agencies like banks, government departments etc. used status review
to make it happen. Why was status review preferred?
there is no need for a process and design reviews as the focus is on opening accounts
to know day to day status and preparedness ofbanks to ensure creation of target accounts
all agencies involved in the programme are involved in different processes
all the three above
none of the above
Video-conferencing is the technique being followed throughout the world for review meetings. When
doubts were expressed over the future of Metrorail project of a city, the chairman of the company
executing the project called for an emergency meeting of all senior executives of the company located
across the world. He has opted for video-conferencing to reach all of themsimultaneously. What are the
advantages of such reviews?
it is to please the government so that the company’s image is not tarnished
to know the status and repercussions ofany changes due to rerouting and find solutions
to communicate that the management decided to withdraw from the project
to find excuses for likely delays in future and protect the company legally
to seek extension of deadlines
29

UNIT 10 PROJECT CONTROL
Indian Space Research Organization (ISRO) planned for Chandrayaan II Project with specific
schedules. As it depended on a number of specialized vendors for the successful completion of the
project, its controls extend beyond in-house activities. What project control mechanism was to be
followed by ISRO to meet project objectives and goals without time and cost overruns?
ensure timely corrective actions on review results for the Chandrayaan project
outsource project management to an expert agency
engage outside workforce to work in-house until the Chandrayaan is launched
import equipment and expertise and integrate in India to ensure timely launch of Chandrayaan
reschedule the project launch
Tata Motors initiated a prestigious project for the manufacture of Nano cars in West Bengal. But due to
certain circumstances, the company had to shift its venue for the manufacture of Nano from West
Bengal to Gujarat. The task involved selecting a new location, complying with local regulations,
obtaining approvals and starting the project afresh. What major strategy may Tata Motors have used to
manage the unexpected change and implement the project?
conducted design review from the change perspective
recast the supply chain strategy
obtained all necessary approvals and started implementation
considered abandoning the project
shifted all trained workforce from West Bengal to Gujarat
Automobile manufacturers, noting that petrol prices were going up, started converting some of their
production lines to cater to diesel vehicles. The climate change concerns also stressed the need for more
mileage. Price and cost sensitive Indian customers started opting for more and more diesel vehicles. But
suddenly, petrol prices started falling and diesel prices started increasing, indicating that some time in
future, and prices may be same for both variants. What is the best project control mechanismfor a new
entrant to the manufacturing base in India?
have a mix of petrol and diesel plants anywhere in the world and import accordingly
find some other avenues for cost control, allowing for fluctuations in oil prices
create a strong design team to continuously monitor changing client preferences and design/innovate
suitably.
deploy a Flexible Manufacturing Systemto address the requirements
continue established line and emphasise on aggressive marketing
For pharma industry, regulatory compliance is a major requirement as any violations can lead to
cancellation of license. To maintain the reputation and make it a major earner of foreign exchange, the
operations of the companies in the Pharma industry should be effectively controlled. Which project
characteristic is most suited for its control?
comprehensiveness of the issues addressed by the project proposal
communicability of the regulatory framework pertaining to pharma industry
simplicity and flexibility of the processes involved in pharmaceutical production
morally sound processesto conform to ethical standards
authenticity of expenditure controls of the total pharma project
30

Clean Ganga project was launched when Rajiv Gandhi was the Prime Minister of India. But the project
was way behind schedules and nobody was confident of its completion. The current Prime Minister,
keen on completing the project, sought help fromJapan to expedite the project. What could be the most
important reason for the failure of project control mechanism?
legal hurdles
religious fundamentalists treat it as a sin, becoming non-cooperative
underestimating the scope of work involved
delays in according approvals
less number of graveyards along the Ganges belt
Coffee mate, an Italian manufacturer of coffee makers planed to enter India on their own without any
collaboration or joint venture. History proved that Indian housewives prefer kitchenware tailor-made for
Indian and local conditions. To succeed in such an environment, the real challenge was to ensure
effective project control, where important aspects are customer delight through performance, cost and
time. Why should they be controlled?
Indians are more habituated to instant coffee
tastes differ from region to region, calling for different variants in the product and almost
customization to a large extent
mechanical filters are very cheap and serving the purpose of housewives
till now no foreign brand has succeeded in India
coffee consumption is coming down due to health concerns
Inclusive growth of the economy with due focus on the underprivileged people of the country became a
priority of governments. It was found that the benefits were not reaching the target beneficiaries as a
result, leading to very adverse cost-benefit ratios. Government undertook a Comprehensive Survey and
succeeded in identifying a large proportion of bogus ration cards. This one day survey could be
completed because of the control exercised in the project execution at various levels, monitored at the
highest level. Why is project control a management functions?
bureaucracy plays an important role for the success ofsuch projects
lower level people are incapable of project management in such welfare programmes
technical capabilities at execution level are limited to make it a success
top management interacts with public to get feedback
active participation from the head of government automatically ensures controlmechanism to
function
ERPMaster, an established company in the domain of system administration offered ERP solutions
including implementation. While executing an ERP implementation project for a state government, the
project manager used Cybernetic Control to ensure timely execution. What is a Cybernetic control?
it is remotely controlled project control tool in ERP systems
it is IT driven and proven tool in ERP implementation
it is meant for software projects like ERP
it monitors and automatically corrects the process in complex projects like ERP
none of the above is correct for an ERP environment
31

Pineapple, a pioneer in most of the mobile gadgets like tablets, smart phones etc. were market leaders in
the world. Its project management appeared to be based on a balanced control system.The focus was on
creating and sustaining an organizational work culture of freedom with minimal controls so that
creativity is not dampened. Based on this management style of Pineapple, what do you rate as the
primary focus of balanced control?
minimize risk by focusing on projects that are sure of success
maximize risk by creating totally new trends
achieve project goals by promoting innovation
dampen creativity by keeping the organization free for all
increase profitability through first mover advantage
Project management history revealed that Software Projects were more prone to changes, when
compared to infrastructure projects like flyovers, bridges or Metrorail. What according to you is the
most significant reason for such changes in Software projects?
a. technology changes
c. changesin regulations
e. project costs
b. customer demand
d. threat of competition
32

UNIT 11: PROJECT COST MANAGEMENT
Mars Orbiter Mission (MOM) successfully put into orbit recently cost only ($75 million), which was
one-fifth of the cost of NASA’s similar mission ($671 million). Project cost management seemed to
have been effectively performed in the MOM. What might have resulted significantly for such a low
budget but recording breaking success?
ensuring effective cost control through perpetualaudit
meticulous planning followed by budgeting,estimating and control
simplification of design,development and production
low costs of resources like materials, labour etc.
control of failures and rejections through effective quality control
Envirotech, a global company specializing in developing solutions for environmental management,
sensing huge potential for their instruments and equipment in India, decided to establish a
manufacturing plant in India. The country head was asked to submit a resource plan for the proposed
Indian operations. Which of the following documents is most essential for resource planning?
company’s vision, mission and objectives as relevant to Indian operations
strategic Plan for the proposed operations in India
work Breakdown Structure for the proposed manufacturing operations
project Overview Statement of the project
supply chain strategy for executing the project
In general, the cost estimates for major infrastructure projects failed leading to cost overruns. Cleaning
Ganga and making it eco-friendly was a dream project of all the successive governments. Still the
objective was not realized. Starting with an estimate of a few crores of rupees, it is now estimated to
cost thousands of crores. What according to you is the primary reason for cost estimates for
infrastructure projects going wrong?
design of the cleaning project
increasing labor rates
delays in approvals
denial of foreign agencies who promised to fund the project
Inaccuracies in methodology used for cost estimation
A recent study by Boston Consulting Group, found that manufacturing costs are different in different
countries and regions due to wages, exchange rates, labour productivity and energy costs. Suddenly
many companies in the US started sourcing internally and are confident of maintaining cost
competitiveness of their manufacturing operations. What could be the main reason for the dramatic
change in the operations strategy in the US?
US government’s decision to take back manufacturing to the country through incentives
drastic reduction in energy costs due to the discovery of shale gas
workforce in the US is ready to work for lower wages, helping to reduce manufacturing costs
d. increase in consumption within the US, attracting manufacturers to produce locally
decreasing unemployment in the US and technological superiority of the US
33

Many projects for railways and roadways were not getting completed in time all over the country. Upon
review the executing agencies and the contractors attributed the delays to delays in clearances and
release of funds. Due to such delays, the prices of inputs went up and costs go beyond the budgeted
estimates, forcing the projects to be delayed or abandoned. What do you suggest to arrive at realistic
cost budgeting?
incorporate adequate cushion in the estimates and budgets
closely monitor the costs as the project progresses and take immediate mid- course corrections
outsource the budgeting activity to an external expert
ensure proper cost planning
formulate a comprehensive cost controlstrategy
Prime Minister of India aggressively promoted ‘Make in India’ campaign and appeared to be
succeeding in attracting many MNCs to invest and establish manufacturing facilities in India. The main
objective was to generate employment opportunities, but without manufacturing cost competitiveness, it
is not easy to attract MNCs. Which is the single most important factor to tackle urgently to ensure that
manufacturing in India is highly competitive and rewarding?
go for large scale automation of manufacturing to reduce wage bill
ensure that the rupee exchange rate is favourable
improve productivity of all resources,including workforce
identify local sources for materials, parts and components
reduce energy costs case by case
During the year 2013-14, all automobile manufacturers had to resort to recall of some of their cars from
customers to fix technical snags. Ford recalled about 8.5 lakh cars, followed by GM and other reputed
MNCs. various reasons have been forwarded by the automobile manufacturers. What could be the most
important reason for such a large recall rate in India?
semi-baked products sold to Indian customers
focus on cost competitiveness and compromise on quality
MNC’s style of communicating their customer focus to retain their loyalty
inefficient supply chain strategy encompassing sourcing operations and quality management
apprehensions about the implications of safety violations such as accidents
Smart City was the buzz word in India as the Central Government planned to create at least 100 Smart
Cities in the country with at least 2 per state. The real difficulty lied in cost estimates and budgetary
allocations as the scope of a Smart City was very ambiguous. Some experts even argued that it was a
concept on paper. For such a venture without a clear framework, preventing cost overrun is a
challenging task. If you are the project manager for one of the selected cities, what will be your focus to
ensure that there are no cost overruns?
project cost management incorporating the essentialcomponents of planning, estimation, budgeting
and cost control
prepare a plan, estimate and budget with flexibility for mid-course correction and control
adopt a fix when needed approach
take necessary approvals as and when planned budgets are exhausted and complete in time
take adequate margin of safety while taking budgetary approvals
34

Ministry of Programme implementation, Government of India found that almost all the power projects
funded by the government during the Eleventh Five Year Plan have recorded cost overruns. This was
attributed mainly to time overruns by as many as five years, besides other reasons. What is the main
implication of high costs and delays in such crucial power projects?
high unit costs of electricity as being felt my citizens in many states
acute power shortage as being experienced across the country with a few exceptions
focus on development of alternate sources of power generation
privatization of power projects to arrest time and cost overruns
attitude of saving power among people in every possible way
Chinaware, a renowned manufacturer of cookware, wanted to establish a manufacturing plant in India
due to raising manufacturing costs in China. They also noticed that even in India, costs were likely to go
up in future. The project manager was asked to work out a comprehensive cost control plan around
critical resources so that the Indian operations are cost competitive. What should be the focus of the
project manager as a top priority area?
cost of raw materials required for manufacturing
labour cost associated with Indian operations
cost of infrastructure required
cost of capital required for the Indian operations
productivity of all resources employed in Indian operations
35

UNIT 12: PROJECT RISK MANAGEMENT
Toyota, the renowned automobile manufacturer, patented most of the management innovations in
manufacturing such as Toyota Production System, JIT, Lean and many more such techniques. As a part
of its operations strategy, its Lean Manufacturing and JIT encouraged single vendor policy for many
critical parts and components. While this worked wonders for the company for some time, the
Fukushima disaster due to Tsunami in 2011 created a crisis in its supply chain, disrupting its operations
for more than six months, affecting total business performance. What could be the reason for this crisis?
failure of its risk management strategy
it is beyond human capacity to guess with certainty such natural disasters
it is a typical example of an uncertain situation impossible to predict
while risk could be predicted in earth quake prone Japan, the extent of risk could not be gauged
it is the invisible hand of the almighty
With more than 100 nuclear power reactors, generating 20% of electricity in the US, the safety record
was satisfactory until the Three Mile Island nuclear accident. Detailed investigations found that a
combination of failures due to malfunctioning of equipment, negligence of operators and procedural
lapses resulted in the biggest ever nuclear accident in the US. What type of a risk is indicated by this
type of accident?
a. production risk
c. social risk
b. economic risk
d. technical risk
e. credibility risk
With increasing awareness about climate change and associated health related risks, some people were
opposing establishment of even thermal power plants, which meet more than 60% of country’s
electricity needs. They contended that the pollution from the plants is a major health hazard. People in
Kerala made Coca Cola to shut down its plant due to its environmental impacts. Governments
themselves ban or close down some types of chemical plants because of the effluents generated and
discharged by them, causing either Green House Gas (GHG) emissions or Ozone layer depletion. How
do you categorize the risks associated with such public outcry?
a. political risk
c. social risk
b. technical risk
d. production risk
e. economic risk
IITs produce high class engineering graduates but most of themwere not staying in the country. Lakhs
of engineering graduates from hundreds of other engineering colleges across the country are not
employable as their skills are not compatible with industry requirements. Thus even though there is
demand, supply is not qualitatively adequate to meet the requirements. What is the risk Indian industry
in general is facing?
a. technical risk b. operations risk
c. marketing risk d. HR risk
e. financial risk
36

During 2014, Supreme Court cancelled 214 out of the 218 coal blocks allotted by the previous
governments since 1993. This had tough implications for the energy sector, which was already facing
various shortages. About 40 companies were involved and are liable to pay a penalty of about Rs.10,000
crores. At a time when thermal power and the coal-based industries are critical to Indian economy, how
do you rate the position taken by the central government with regard to risk tolerance?
risk averse as it may affect the economy adversely
risk neutral as it is the verdict of the Supreme Court
risk loving as the government has a chance for fresh tendering
might have readied a plan to mitigate the risk in anticipation of the verdict
might have opted a wait and watch approach hoping a solution to emerge
Acute power shortage in some cities was seen as a great business opportunity by many suppliers of
inverters. Some companies like Exide, Sukom and Microtek even contemplated establishing
manufacturing plants in high potential areas. But the promise of 24/7 power supply by the government
in the near future is dampening the spirit of these manufacturers. If you are the project manager for one
of these companies that decided to establish a manufacturing facility, which criterion you will choose
under such uncertain conditions and why?
maximax (Hurwicz) criterion because it is likely to yield highest returns
maximin (Wald) criterion because it assures the best minimum return
minimax regret criterion because it minimizes maximum regret value
criterion of realism (Laplace criterion) because it considers the average
decision tree analysis because it has several interrelated decisions
Frustrated with non-availability of ready to use and skilled engineers passing out of the present
engineering colleges, a renowned industrial house decided to enter engineering education market. But
some of the state governments suddenly decided to close down a large number of existing engineering
colleges citing poor quality as the main reason. The company perceived some risk in establishing
engineering colleges at this juncture, but also found immense opportunity in view of the growing
population of youth and engineering aspirants. As a project manager for the venture, what will be your
response to perceived risks?
avoid risk by postponing the decision
b. ransfer the risk through tie-up with a local , well established institution
accept the risk and go ahead with the project as planned in view of huge requirement for well
qualified engineers
mitigate the risk through appropriate countermeasures as and when risk manifests
seek the opinion of a risk management expert
Many MNCs were deeming it as a risk to invest in India due to a number of reasons. Upon surveys and
analyses, it was found that the rating for ‘ease of doing business’ is highly adverse. Sensing this
feeling among potential foreign investors and the need for such investments, both the central and state
governments have been promising ‘single-window’ clearances for proposals, more comfortable
regulatory regime etc. What could be the intention behind such initiatives of the government?
a. to minimize risk for the investors
c. to dilute regulatory requirements
b. to maximize employment opportunities for the youth
d. to realize ‘make in India’ project
to stop imports and save foreign exchange
37

After the Nuclear tests at Pokhran, all the developed countries imposed a ban on the supply of Uranium
to India. All the 20 Nuclear Power Plants established in India operate with Uranium as fuel. The
aggressive Nuclear Power programme of the country suffered delays. Recently Australia decided to lift
ban and start supplying Uranium to India. While planning further nuclear power plants, what measures
need to be taken to minimize such risks in future?
opt for reactors using locally available nuclear fuel as dependence on imports is always risky
install power plants only with total indigenous know-how and resources
insist on a build-operate-maintain model with all foreign collaborators
abandon nuclear power programme as it is anyhow risky
ensure uninterrupted supply chain for the establishment, operation and maintenance
In major infrastructure projects, risks are very common-risks for the client as well as the contractor. The
client’s risk is time andcost overruns andloss of credibility andbrandimage, in case the project is not
completed as per contractual obligations. The contractor may incur losses due to delays and may not be
preferred contractor for prospective clients. What is the most popular method followed by the project
managers to manage risks in such projects?
alert the management whenever a risk situation is foreseen
ensure adequate insurance coverage until the project is completed
implement a comprehensive risk management methodology to act promptly
insist on the suppliers/contractors to take all the risk
share the risk with all the suppliers/contractors on a pro-rate basis
38

UNIT 13: PROJECT QUALITY MANAGEMENT
Tata Power implemented Quality Circles very effectively realizing a number of benefits in the
operational performance of its products and services such as reduction in Inventories, cycle time
reduction Industrial harmony, enhanced customer satisfaction etc. What according to you is the most
significant advantage of quality circle implementation that leads to all other benefits?
improved customer satisfaction
enhanced product quality through reduction in failures
improvement in work culture
reduction in cycle times for various processes
improved profitability
Sundaram Fasteners, the Deming Award winner for quality was exporting some of its components to
automobile manufacturers in Europe in addition to Japan. The advent of ISO 9000 series of Quality
Management standards made the European countries insist on ISO 9000 Quality Certification by the
company even though they have been approved vendors. What purpose served by ISO 9000 standards?
guarantees the quality of the products and services of the certified companies
creates a common business language across the business community
removes multitude of standards and unified all of them into one standard
provides a universal model for quality management
ensures continuous quality improvement
Recalling cars became a regular trend in automobile market. During 2013 Ford alone recalled 85,000
Figo model cars. Investigations revealed that all recalls are due to quality related problems, if ignored
might have led to fatal accidents. The process of recall, repair and return/replacement to customers
involved huge costs directly and indirectly, in addition to the loss of customer confidence and goodwill.
How are such costs classified?
a. factory overheads
c. manufacturing costs
b. quality costs
d. public Relations costs
e. marketing overheads
Aditya Birla Group of companies was wedded to TQM philosophy through its approach of World Class
Manufacturing (WCM). The Groups’ interventions at company level encompass the entire
organization. Entire workforce has very clear customer-focus and the customers’ requirements are
effectively communicated to all process owners in the organization. This ensured that quality is
everybody’s responsibility and that everybody is accountable for ensuring the quality of one’s
process. What is the term used to describe the process of ensuring that the customers’
requirements are clearly understood at every level by everybody in the organization?
a. six Sigma b. balanced Score Card
c. quality Function Deployment d. business Process Reengineering
e. just in Time
39

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