Project Management Discussion Questions

Discussion Questions

1. Of the criteria for successful screening models, realism would top the priority list. Realism requires that the model is in line with the constraints and objectives of the organization. The other criteria are based on how usable and applicable the model is. However, these measures would mean little if the model was unable to provide a recommendation that was usable within the resources available to the company.

2. Project Checklists are easy to use, based on a simplistic visual model with a basic scoring system. Using a checklist enhances the input and discussion during the screening process. Unfortunately, the model also has its shortcomings. The two most significant are the subjectivity of the rating system and the lack of a weighting system. The weighting system is important in establishing trade-offs between criterion.

3. The Analytical Hierarchy Process breaks the broad criterion categories of other selection models into smaller, more manageable pieces that have more defined focuses. This allows the AHP to create a more accurate ordering of priorities than other models. It also enables a better demonstration of how potential alternatives meet organizational goals and strategy. Weighting that is absent or inefficient under the checklist and scoring model is improved. AHP allows weighting by main and sub-criterion which eliminates the double counting of the scoring model. Finally, the AHP creates results that are easily compared between projects as well as within in cost/benefit analysis.

4. The Profile Model is beneficial because it clearly outlines the relationship between risk and return of project alternatives. It also establishes a threshold for eliminating or qualifying projects. On the other hand, it may not be as effective for selecting alternatives because it limits discriminating criteria to risk and return only. Additionally, it can be difficult to accurately quantify risk.

5. Financial models are superior to screening models in that they link project alternatives to financial performance. The results of financial models are non-subjective meaning they are not subject to individual interpretation. Therefore, it becomes easier to compare the benefits of one project alternative versus another. The models do have some drawbacks. Due to the required information in determining NPV and IRR, it may be difficult to make long-term estimates accurately (i.e. would have to estimate future inflation and interest rates). Economic conditions may be unknown or unstable. Determinations are made about the economic future and may turn out to be invalid.

6. The options model looks at alternatives faced when a company has already made investment into a project. Confronted with different possibilities in how to handle the non-recoverable investment (past investment), the options model reveals whether investing into the project