Project Management Project Selection Model
152.252
Assignment 1 Project Management
Kerry Pilcher
10114098
TO: Director and Research Associates of Te Au Rangahau
FROM: Kerry Pilcher Project Analyst
DATE: 20/03/2013
SUBJECT: Investment Portfolio Analysis
The basic goal of project portfolio management is to select the projects and programmes out of a set of necessary and available projects within the organization whose realization helps achieve the strategic organizational goals, taking into account the available resources (Beric, Jovanovic & Jovanovic 2012).
In order to select the correct investment project with the greatest profitability, technological opportunity, (least) development risk and appropriability (to organisational strategies) (Meredith & Mantel 2006), analysis of project selection options will assist in the decision on where to invest the proposed $20,000.
Both numeric and non-numeric project selection models will be discussed through this memo with the focus being on finding the most appropriate option indicating the most accurate forecast results for investment proposal’s A and B.
Project Selection Models need to meet certain criteria as displayed in figure 1.0 below. (Pinto, 2010)
* Realism - reality of manager’s decision * Capability- able to simulate different scenarios and optimize the decision * Flexibility - provide valid results within the range of conditions * Ease of Use - reasonably convenient, easy execution, and easily understood * Cost - Data gathering and modeling costs should be low relative to the cost of the project * Comparability - must be easy and convenient to gather and sort for uses of comparability
Non-numerical project selection models
The Comparative Benefit Model
The Comparative Benefit Model analysis projects side by side when multiple options come to table. Using a variety of comparative ranking tools e.g. Q-Sorting, forced comparison, murder board, grid profiling etc, (COST MANAGEMENT 642 -
Assignment 1 Project Management
Kerry Pilcher
10114098
TO: Director and Research Associates of Te Au Rangahau
FROM: Kerry Pilcher Project Analyst
DATE: 20/03/2013
SUBJECT: Investment Portfolio Analysis
The basic goal of project portfolio management is to select the projects and programmes out of a set of necessary and available projects within the organization whose realization helps achieve the strategic organizational goals, taking into account the available resources (Beric, Jovanovic & Jovanovic 2012).
In order to select the correct investment project with the greatest profitability, technological opportunity, (least) development risk and appropriability (to organisational strategies) (Meredith & Mantel 2006), analysis of project selection options will assist in the decision on where to invest the proposed $20,000.
Both numeric and non-numeric project selection models will be discussed through this memo with the focus being on finding the most appropriate option indicating the most accurate forecast results for investment proposal’s A and B.
Project Selection Models need to meet certain criteria as displayed in figure 1.0 below. (Pinto, 2010)
* Realism - reality of manager’s decision * Capability- able to simulate different scenarios and optimize the decision * Flexibility - provide valid results within the range of conditions * Ease of Use - reasonably convenient, easy execution, and easily understood * Cost - Data gathering and modeling costs should be low relative to the cost of the project * Comparability - must be easy and convenient to gather and sort for uses of comparability
Non-numerical project selection models
The Comparative Benefit Model
The Comparative Benefit Model analysis projects side by side when multiple options come to table. Using a variety of comparative ranking tools e.g. Q-Sorting, forced comparison, murder board, grid profiling etc, (COST MANAGEMENT 642 -
References: Beric, I. Jovanovic, F. Jovanovic, P. (2012). Implementation of Quantitive Methods in Project Selection. Metalurgia International, Vol. 17 Issue 5, p190-194. Retrieved from http://ehis.ebscohost.com.ezproxy.massey.ac.nz Project Selection Baker, S. (2000). Perils of the Internal Rate of Return. Retrieved from http://hspm.sph.sc.edu/COURSES/ECON/invest/invest.html Gallant, C Pinto, J. (2010). Project management: Achieving Competitive Advantage (2nd Ed). New Jersey, USA: Pearson Meredith, J.R., & Mantel, S.J (2006) Brooks, R.M. (2010). Financial Management: Core Concepts. New Jearsey, USA: Pearson Atrill, P., Mc Laney, E., Harvey, D., Jenner, M., Weil, S