PMAN 637 Mid-Term Examination

Question # 00662583 Posted By: mac123 Updated on: 03/17/2018 10:41 PM Due on: 03/18/2018
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PMAN 637Mid-Term Examination

Worth – Total 20 points

Instructions: Do not discuss the mid-term with your team members or anyone else. The mid-term is an open book exam. When quoting a reference, use proper APA style citations (Author, Year of publication, page#) after any brief quote and then the full reference at the end of the exam. If you have a question of clarification, post it in the whole class Session 7 discussion “Mid-Term Exam” area and your Professor will answer for all the class. Do not include the questions in your responses. No discussion with your team or class members is permitted during exam time. Your exam is due in your Assignment Folder. Cite only references from our course readings, sessions 1-6. Don’t forget to put your nameon the top of the exam! No late exams accepted. Use double spacing and only 12-point font.

Question 1: Organizing Risk Data (six points/2 points per question):

a) In the article by Dash, S.N (2015), written as a preparation for the PMP Exam (Project Management Professional), two different risk registers are shown. Examine the ter on page 2, and how numerical “values” are assigned, then multiplied for an overall “risk score”. If you were the PM, what are the two highest risks in this ter to “rank” for priority mitigation?

b) Pareto charts are a useful visual method of plotting data by “frequency” of occurrence: how often they occur. In your words (the article on PERIL databases will guide you with examples), why would such a Pareto bar chart be useful for a PM reporting status of several project risk areas to their internalstakeholders? See the article by Kendrick (2008) assigned in session 3. One paragraph limit, with correct APA citation format.

c) Under 11.2.3 “Identify Risks: Outputs” in the PMBOK Guide of worldwide standards (PMI, 2017, 6th ed., page 417), the contents of a Risk ter are listed. Describe two methods of data gathering in the sections on “Data Gathering” and “Data Analysis”, domains 11.2.2.2 and 11.2.2.3 which could mitigate ‘expert biases’ about a project’s risks to schedule or budget


Question 2 Risk Mgt. Tools and Methods(worth 6 points).(Limit one paragraph per each method described – examples are encouraged from readings, exercises or discussions).

a) Your team MPP has a schedule of upcoming dates for March and April. Add one risk relating to your final Team Project “scope” in your group’s MPP Risk ter and phrase it here (2 points)

b) In your assigned readings during session 5 from Chapter 6 of the “Practice Standard for Project Risk Management” (PMI, 2009, p.31), section 6.1 “Purpose and Objectives of the Perform Qualitative Risk Analysis Process” stresses that one step in risk analysis is to “categorize risks according to their sources or causes”. If several risks arise from a “common source” (called a root cause), PMs are advised to focus “risk responses” on this root cause. Give an example of a “cost risk” to a project which may have a root cause. Remember, costs are not overall budgets. (2 points – one paragraph limit)

c) In section 11.5.3.2 “Project Risk Management Plan Updates”, the authors of the PMBOK Guide (PMI, 2017) affirm change control processes to any Project Plan. In section 11.5.3.3 (PMI, 2017, p.448), project updates may include cost forecasts, a “lessons learned” register, and a Risk ter. There are eight bullet point “updates” that a PM could add to any Risk ter in this PMBOK Guide section from your assigned reading. Describe two of these and how they would be useful to any team. (2 points)

Question 3 (Worth 8 points). A) Read the attached “Mexi-Energy” case and format a Risk ter table. Identify the top six risks facing the Project Management team which could be rated using the attached scale. Rateyour risks using the scale provided at the end of the case. B) Since there will be expensive “penalty clauses” in the hypothetical electricity generating plant contract for any delays, explain two methods to mitigate risks to scheduling.

Since there will be expensive “penalty clauses” in the contract for any delays, create an RBS (risk breakdown structure) identifying external and technical risks in this case. 4 points

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Producing Electricity via Steam-Powered Turbines: A Hypothetical Case Study

Sam Martinez is seeking to invest a portion of his considerable assets in the “independent” electric power production industry in California, a sector projected to experience very rapid growth in the 21st century. He and a Board have set up and funded a company “MexiEnergy Inc.”. The intention is to use the company to build and operate an electric power-generation plant, and then form a non-profit organization to “donate” some of the power to social service agencies.

However, the large public-sector (hypothetical) California Energy produces most of the power for California. The main exceptions are co-generation plants associated with food processing, timber and similar industries, some small hydro plants which generate electricity via water into steam, which turns large turbines– thus electricity is produced. These “independents” are Mr. Martinez’ business models but also competition. California Energy operates all long-distance distribution, selling electricity to municipal utilities for local distribution; brokering electricity sales to large industrial customers, and providing electricity wholesale to small rural customers.

Privatization of California Energy is being argued by leading environmental groups, with a view that increases in electricity cost per unit which would decrease electricity consumption. Not everyone agrees with such reasoning, since it may risk much higher costs for consumers. These probabilities have been calculated as part of California Energy’s financial forecasts but lack any risk management plan.

Sam has identified what he believes to be his technical opportunity. It would involve:

1. Producing base load electric power for sale to California Energy in a northern California town using a CCGT (combined cycle gas turbine) plant. This package deal would include a set of natural gas-powered turbines driving generators, and the heat producing high pressure steam to drive a steam turbine generator: a high yield of electricity would be produced.

2. Providing (for sale) low pressure steam for local manufacturing organizations in the immediate vicinity of the CCGT plant and generating more of this when supply and demand increase.

The local city has a natural gas network and supply, but the supply pipeline is not large enough to cope with the proposed CCGT type of natural gas-run turbine. The gas supply company will provide a new main and gas at a price per unit fixed for a substantial period of time but require a “take-or-pay” contract with any buyers. If Mexi-Energy decides to contract to take gas from any given date, they will have to pay for the contracted natural gas flow whether they use it or not. Weather impacts the gas hook-ups as well from large plants, since this must be done under extremely dry conditions.

A range of established suppliers of CCGT plants would be willing to sell Mexi-Energy its turbine-driven equipment. The Board must decide upon risks in purchasing one of the following three options:

A) New untested design. Very high fuel efficiency. Initial reliability uncertain. Likely to be very reliable in the long run. Claimed very low maintenance costs. Low capital cost to encourage purchase.

B) State of the art tested design. High fuel efficiency, high reliability and low maintenance costs. Very high initial capital cost.

C) Tried and true design. Low fuel efficiency, moderate reliability and mid-range maintenance costs, depending on reliability of natural gas hook-ups. Moderate capital cost.

CCGT plant suppliers will install the major plant components on a fixed price basis. MexiEnergy Inc. has revised the scope and Contract, with stiff penalty clauses for 1) delays or 2) performance failures which the manufacturer must be responsible for. However, such penalty clauses may not be operable, for example, if ground conditions are not as tested environmentally or electrical grid connections are not in place when required.

California Energy will provide grid connections and will not allow anyone else to do so. The plant could be delayed for weather reasons and start-up delayed due to grid hook-ups or electrical black-out failures due to ‘rolling black-outs’.

Water to turn the CCGT turbines will be taken from a river which flows through the municipality. However, no legal environmental permits have been granted to remove water from these rivers during the several drought years in California. Permit fees statewide are rumored to rise dramatically before construction begins.

Extraction of water requires municipal planning permits, and also state gov’t. approval is required for the plant construction using water pipelines, low pressure steam lines and power lines. All construction must be scheduled, of course, dependent upon approvals from governmental agencies.

You have been hired to present a Risk Analysis report by next week to the Board.

Use the rating scale on the next page when formatting your Risk ter and rating risks for part A) of this Mid-Term Exam question 3, case analysis.

Probability and Impact Matrix Scale

Probability ratings:

1% -39%: Unlikely

40%-69% May or may not occur

70%-89%: Likely to occur

90%-100% Highly probable

Impact ratings:

1 Minimal

2 Moderate

3 Significant

4 Catastrophic

Risk Score is calculated by multiplying

___ x ___

No cover sheet is required for this Mid-Term: they will be printed out so please put your name and date on the top page and upload into your Assignment Folder.

Thank you for your active participation in PMAN 637 this semester!

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