Discussion on Project Management Topics

Anonymous

Question Description

1.)

Read the case study "To Bid or Not to Bid" on page 1011 and then answer the questions on page 1012.

2.)

Read the case study "Teloxy Engineering (A)" on page 948 and answer the corresponding questions on the same page.

3.)

Read the case study "Communication Failures" starting on page 329 and answer the questions on page 332.

4.)

Read the case study "McRoy Aerospace" on page 332 and answer questions 4 and 5 on page 333.

*** Please find the Textbook (source) in the attachment ***

Note: Write at least 800 words for each discussion topic. Also provide at least 2 references for each topic. APA format.

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ffirs.qxd 1/3/13 3:48 PM Page i ffirs.qxd 1/3/13 3:48 PM Page i PROJECT MANAGEMENT ffirs.qxd 1/3/13 3:48 PM Page ii Dr. Kerzner’s 16 Points to Project Management Maturity 1. Adopt a project management methodology and use it consistently. 2. Implement a philosophy that drives the company toward project management maturity and communicate it to everyone. 3. Commit to developing effective plans at the beginning of each project. 4. Minimize scope changes by committing to realistic objectives. 5. Recognize that cost and schedule management are inseparable. 6. Select the right person as the project manager. 7. Provide executives with project sponsor information, not project management information. 8. Strengthen involvement and support of line management. 9. Focus on deliverables rather than resources. 10. Cultivate effective communication, cooperation, and trust to achieve rapid project management maturity. 11. Share recognition for project success with the entire project team and line management. 12. Eliminate nonproductive meetings. 13. Focus on identifying and solving problems early, quickly, and cost effectively. 14. Measure progress periodically. 15. Use project management software as a tool—not as a substitute for effective planning or interpersonal skills. 16. Institute an all-employee training program with periodic updates based upon documented lessons learned. ffirs.qxd 1/3/13 3:48 PM Page iii PROJECT MANAGEMENT A Systems Approach to Planning, Scheduling, and Controlling ELEVENTH EDITION HAROLD KERZNER, Ph.D. Senior Executive Director for Project Management The International Institute for Learning New York, New York ffirs.qxd 1/3/13 3:48 PM Page iv Cover illustration: xiaoke ma/iStockphoto This book is printed on acid-free paper. Copyright © 2013 by John Wiley & Sons, Inc. All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for damages arising herefrom. For general information about our other products and services, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Library of Congress Cataloging-in-Publication Data: Kerzner, Harold. Project management : a systems approach to planning, scheduling, and controlling / Harold Kerzner, Ph. D. Senior Executive Director for Project Management, the International Institute for Learning, New York, New York. — Eleventh edition. pages cm Includes bibliographical references and index. ISBN 978-1-118-02227-6 (cloth); ISBN 978-1-118-41585-6 (ebk); ISBN 978-1-118-41855-0 (ebk); ISBN 978-1-118-43357-7 (ebk); ISBN 978-1-118-48322-0 (ebk); ISBN 978-1-118-48323-7 (ebk) 1. Project management. 2. Project management—Case studies. I. Title. HD69.P75K47 2013 658.4’04 —dc23 2012026239 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 ffirs.qxd 1/3/13 3:48 PM Page v To Dr. Herman Krier, my Friend and Guru, who taught me well the meaning of the word “persistence” ffirs.qxd 1/3/13 3:48 PM Page vi ftoc.qxd 1/3/13 3:50 PM Page vii Contents Preface 1 xxiii OVERVIEW 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1 Introduction 1 Understanding Project Management 2 Defining Project Success 7 Success, Trade-Offs, and Competing Constraints 8 The Project Manager–Line Manager Interface 9 Defining the Project Manager’s Role 14 Defining the Functional Manager’s Role 15 Defining the Functional Employee’s Role 18 Defining the Executive’s Role 19 Working with Executives 19 Committee Sponsorship/Governance 20 The Project Manager as the Planning Agent 23 Project Champions 24 The Downside of Project Management 25 Project-Driven versus Non–Project-Driven Organizations 25 Marketing in the Project-Driven Organization 28 Classification of Projects 30 Location of the Project Manager 30 Differing Views of Project Management 32 Public-Sector Project Management 34 International Project Management 38 Concurrent Engineering: A Project Management Approach 38 Added Value 39 Studying Tips for the PMI® Project Management Certification Exam Problems 40 42 Case Study Williams Machine Tool Company 44 vii ftoc.qxd 1/3/13 3:50 PM Page viii viii CONTENTS 2 PROJECT MANAGEMENT GROWTH: CONCEPTS AND DEFINITIONS 47 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 Introduction 47 General Systems Management 48 Project Management: 1945–1960 48 Project Management: 1960–1985 49 Project Management: 1985–2012 55 Resistance to Change 59 Systems, Programs, and Projects: A Definition 64 Product versus Project Management: A Definition 66 Maturity and Excellence: A Definition 68 Informal Project Management: A Definition 69 The Many Faces of Success 70 The Many Faces of Failure 73 The Stage-Gate Process 76 Project Life Cycles 78 Gate Review Meetings (Project Closure) 83 Engagement Project Management 84 Project Management Methodologies: A Definition 85 Enterprise Project Management Methodologies 87 Methodologies Can Fail 91 Organizational Change Management and Corporate Cultures 94 Project Management Intellectual Property 100 Systems Thinking 101 Studying Tips for the PMI® Project Management Certification Exam Problems 107 Case Study Creating a Methodology 108 3 ORGANIZATIONAL STRUCTURES 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 111 Introduction 111 Organizational Work Flow 113 Traditional (Classical) Organization 114 Developing Work Integration Positions 117 Line-Staff Organization (Project Coordinator) 121 Pure Product (Projectized) Organization 122 Matrix Organizational Form 125 Modification of Matrix Structures 132 The Strong, Weak, or Balanced Matrix 136 Center for Project Management Expertise 136 Matrix Layering 137 104 ftoc.qxd 1/3/13 3:50 PM Page ix ix Contents 3.11 3.12 3.13 3.14 3.15 3.16 3.17 Selecting the Organizational Form 138 Structuring the Small Company 143 Strategic Business Unit (SBU) Project Management 146 Transitional Management 147 Barriers to Implementing Project Management in Emerging Markets 149 Seven Fallacies that Delay Project Management Maturity 156 Studying Tips for the PMI® Project Management Certification Exam 159 Problems 161 Case Studies Jones and Shephard Accountants, Inc. Coronado Communications 168 4 ORGANIZING AND STAFFING THE PROJECT OFFICE AND TEAM 171 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 Introduction 171 The Staffing Environment 172 Selecting the Project Manager: An Executive Decision 174 Skill Requirements for Project and Program Managers 178 Special Cases in Project Manager Selection 184 Selecting the Wrong Project Manager 184 Next Generation Project Managers 188 Duties and Job Descriptions 189 The Organizational Staffing Process 193 The Project Office 199 The Functional Team 204 The Project Organizational Chart 205 Special Problems 208 Selecting the Project Management Implementation Team 210 Mistakes Made by Inexperienced Project Managers 213 Studying Tips for the PMI® Project Management Certification Exam Problems 5 166 216 MANAGEMENT FUNCTIONS 5.0 5.1 5.2 5.3 5.4 5.5 5.6 223 Introduction 223 Controlling 225 Directing 225 Project Authority 230 Interpersonal Influences 237 Barriers to Project Team Development 240 Suggestions for Handling the Newly Formed Team 243 214 ftoc.qxd 1/3/13 3:50 PM Page x x CONTENTS 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 Team Building as an Ongoing Process 246 Dysfunctions of a Team 247 Leadership in a Project Environment 250 Life-Cycle Leadership 252 Value-Based Project Leadership 255 Organizational Impact 257 Employee–Manager Problems 259 Management Pitfalls 262 Communications 265 Project Review Meetings 274 Project Management Bottlenecks 275 Cross-Cutting Skills 276 Active Listening 277 Project Problem-Solving 278 Brainstorming 288 Project Decision-Making 293 Predicting the Outcome of a Decision 301 Facilitation 303 Handling Negative Team Dynamics 306 Communication Traps 307 Proverbs and Laws 309 Human Behavior Education 311 Management Policies and Procedures 312 Studying Tips for the PMI® Project Management Certification Exam 313 Problems 318 Case Studies The Trophy Project 327 Communication Failures 329 McRoy Aerospace 332 The Poor Worker 333 The Prima Donna 334 The Team Meeting 335 Leadership Effectiveness (A) 337 Leadership Effectiveness (B) 341 Motivational Questionnaire 347 6 MANAGEMENT OF YOUR TIME AND STRESS 6.0 6.1 6.2 6.3 Introduction 355 Understanding Time Management 356 Time Robbers 356 Time Management Forms 358 355 ftoc.qxd 1/3/13 3:50 PM Page xi xi Contents 6.4 6.5 6.6 Effective Time Management 359 Stress and Burnout 360 Studying Tips for the PMI® Project Management Certification Exam 362 Problems 363 Case Study The Reluctant Workers 7 CONFLICTS 7.0 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 364 365 Introduction 365 Objectives 366 The Conflict Environment 367 Types of Conflicts 368 Conflict Resolution 371 Understanding Superior, Subordinate, and Functional Conflicts 372 The Management of Conflicts 374 Conflict Resolution Modes 375 Studying Tips for the PMI® Project Management Certification Exam 377 Problems 379 Case Studies Facilities Scheduling at Mayer Manufacturing 382 Telestar International 383 Handling Conflict in Project Management 384 8 SPECIAL TOPICS 8.0 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 391 Introduction 392 Performance Measurement 392 Financial Compensation and Rewards 399 Critical Issues with Rewarding Project Teams 405 Effective Project Management in the Small Business Organization 408 Mega Projects 410 Morality, Ethics, and the Corporate Culture 411 Professional Responsibilities 414 Internal Partnerships 417 External Partnerships 418 Training and Education 420 Integrated Product/Project Teams 422 Virtual Project Teams 424 Breakthrough Projects 427 ftoc.qxd 1/3/13 3:50 PM Page xii xii CONTENTS 8.14 Managing Innovation Projects 427 8.15 Agile Project Management 430 8.16 Studying Tips for the PMI® Project Management Certification Exam 431 Problems 437 Case Study Is It Fraud? 440 9 THE VARIABLES FOR SUCCESS 9.0 9.1 9.2 9.3 9.4 9.5 9.6 9.7 443 Introduction 443 Predicting Project Success 444 Project Management Effectiveness 448 Expectations 449 Lessons Learned 450 Understanding Best Practices 451 Best Practices versus Proven Practices 458 Studying Tips for the PMI® Project Management Certification Exam Problems 459 460 Case Study Radiance International 460 10 WORKING WITH EXECUTIVES 10.0 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 463 Introduction 463 The Project Sponsor 464 Handling Disagreements with the Sponsor 474 The Collective Belief 475 The Exit Champion 476 The In-House Representatives 477 Stakeholder Relations Management 478 Politics 486 Studying Tips for the PMI® Project Management Certification Exam 487 Problems 488 Case Studies Corwin Corporation 491 The Prioritization of Projects 499 The Irresponsible Sponsors 500 Selling Executives on Project Management 502 ftoc.qxd 1/3/13 3:50 PM Page xiii xiii Contents 11 PLANNING 11.0 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.17 11.19 11.20 11.21 11.22 11.23 11.24 11.25 11.26 11.27 11.28 11.29 11.30 11.31 11.32 11.33 11.34 11.35 11.36 Introduction 505 Validating the Assumptions 508 Validating the Objectives 509 General Planning 510 Life-Cycle Phases 513 Proposal Preparation 516 Kickoff Meetings 516 Understanding Participants’ Roles 519 Project Planning 519 The Statement of Work 521 Project Specifications 526 Milestone Schedules 528 Work Breakdown Structure 529 WBS Decomposition Problems 536 Work Breakdown Structure Dictionary 540 Role of the Executive in Project Selection 541 Role of the Executive in Planning 546 The Planning Cycle 546 Work Planning Authorization 547 Why Do Plans Fail? 548 Stopping Projects 549 Handling Project Phaseouts and Transfers 550 Detailed Schedules and Charts 551 Master Production Scheduling 554 Project Plan 556 Total Project Planning 561 The Project Charter 565 Project Baselines 566 Verification and Validation 570 Requirements Traceability Matrix 571 Management Control 572 The Project Manager–Line Manager Interface 575 Fast-Tracking 577 Configuration Management 578 Enterprise Project Management Methodologies 579 Project Audits 582 Studying Tips for the PMI® Project Management Certification Exam 583 Problems 12 505 586 NETWORK SCHEDULING TECHNIQUES 12.0 Introduction 597 12.1 Network Fundamentals 600 597 ftoc.qxd 1/3/13 3:50 PM Page xiv xiv CONTENTS 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 12.20 12.21 Graphical Evaluation and Review Technique (GERT) 604 Dependencies 605 Slack Time 606 Network Replanning 612 Estimating Activity Time 616 Estimating Total Project Time 617 Total PERT/CPM Planning 618 Crash Times 620 PERT/CPM Problem Areas 623 Alternative PERT/CPM Models 626 Precedence Networks 627 Lag 630 Scheduling Problems 632 The Myths of Schedule Compression 632 Understanding Project Management Software 634 Software Features Offered 634 Software Classification 636 Implementation Problems 637 Critical Chain 638 Studying Tips for the PMI® Project Management Certification Exam Problems 640 643 Case Studies Crosby Manufacturing Corporation The Invisible Sponsor 658 13 PROJECT GRAPHICS 13.0 13.1 13.2 13.3 13.4 13.5 661 Introduction 661 Customer Reporting 662 Bar (Gantt) Chart 663 Other Conventional Presentation Techniques 670 Logic Diagrams/Networks 673 Studying Tips for the PMI® Project Management Certification Exam Problems 14 675 PRICING AND ESTIMATING 14.0 14.1 14.2 14.3 14.4 14.5 656 677 Introduction 677 Global Pricing Strategies 678 Types of Estimates 679 Pricing Process 682 Organizational Input Requirements Labor Distributions 686 684 674 ftoc.qxd 1/3/13 3:50 PM Page xv xv Contents 14.6 14.7 14.8 14.9 14.10 14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18 14.19 14.20 14.21 14.22 14.23 14.24 14.25 14.26 14.27 14.28 14.29 14.30 Overhead Rates 690 Materials/Support Costs 692 Pricing Out the Work 695 Smoothing Out Department Man-Hours 696 The Pricing Review Procedure 698 Systems Pricing 700 Developing the Supporting/Backup Costs 701 The Low-Bidder Dilemma 705 Special Problems 705 Estimating Pitfalls 706 Estimating High-Risk Projects 707 Project Risks 708 The Disaster of Applying the 10 Percent Solution to Project Estimates Life-Cycle Costing (LCC) 714 Logistics Support 719 Economic Project Selection Criteria: Capital Budgeting 720 Payback Period 720 The Time Value of Money 721 Net Present Value (NPV) 722 Internal Rate of Return (IRR) 723 Comparing IRR, NPV, and Payback 724 Risk Analysis 724 Capital Rationing 725 Project Financing 726 Studying Tips for the PMI® Project Management Certification Exam Problems 730 Case Study The Estimating Problem 15 COST CONTROL 15.0 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 15.10 15.11 734 737 Introduction 737 Understanding Control 741 The Operating Cycle 744 Cost Account Codes 745 Budgets 750 The Earned Value Measurement System (EVMS) 752 Variance and Earned Value 754 The Cost Baseline 773 Justifying the Costs 775 The Cost Overrun Dilemma 778 Recording Material Costs Using Earned Value Measurement 779 The Material Accounting Criterion 782 712 728 ftoc.qxd 1/3/13 3:50 PM Page xvi xvi CONTENTS 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 15.23 15.24 Material Variances: Price and Usage 783 Summary Variances 784 Status Reporting 785 Cost Control Problems 792 Project Management Information Systems 793 Enterprise Resource Planning 793 Project Metrics 794 Key Performance Indicators 800 Value-Based Metrics 806 Dashboards and Scorecards 812 Business Intelligence 815 Infographics 816 Studying Tips for the PMI® Project Management Certification Exam 816 Problems 820 Case Studies The Bathtub Period 838 Franklin Electronics 839 Trouble in Paradise 841 16 TRADE-OFF ANALYSIS IN A PROJECT ENVIRONMENT 16.0 16.1 16.2 16.3 16.4 16.5 17 Introduction 845 Methodology for Trade-Off Analysis 848 Contracts: Their Influence on Projects 865 Industry Trade-Off Preferences 866 Conclusion 869 Studying Tips for the PMI® Project Management Certification Exam 869 RISK MANAGEMENT 17.0 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8 17.9 17.10 17.11 17.12 845 871 Introduction 872 Definition of Risk 873 Tolerance for Risk 875 Definition of Risk Management 876 Certainty, Risk, and Uncertainty 877 Risk Management Process 883 Plan Risk Management (11.1) 884 Risk Identification (11.2) 885 Risk Analysis (11.3, 11.4) 892 Qualitative Risk Analysis (11.3) 897 Quantitative Risk Analysis (11.4) 903 Probability Distributions and the Monte Carlo Process 904 Plan Risk Response (11.5) 913 ftoc.qxd 1/3/13 3:50 PM Page xvii xvii Contents 17.13 17.14 17.15 17.16 17.17 17.18 17.19 Monitor and Control Risks (11.6) 919 Some Implementation Considerations 920 The Use of Lessons Learned 921 Dependencies Between Risks 925 The Impact of Risk Handling Measures 930 Risk and Concurrent Engineering 933 Studying Tips for the PMI® Project Management Certification Exam 936 Problems 940 Case Studies Teloxy Engineering (A) 948 Teloxy Engineering (B) 948 The Risk Management Department 949 18 LEARNING CURVES 18.0 18.1 18.2 18.3 18.4 18.5 18.6 18.7 18.8 18.9 18.10 18.11 18.12 18.13 18.14 18.15 953 Introduction 953 General Theory 954 The Learning Curve Concept 954 Graphic Representation 956 Key Words Associated with Learning Curves 958 The Cumulative Average Curve 958 Sources of Experience 960 Developing Slope Measures 963 Unit Costs and Use of Midpoints 964 Selection of Learning Curves 965 Follow-On Orders 966 Manufacturing Breaks 966 Learning Curve Limitations 968 Prices and Experience 968 Competitive Weapon 970 Studying Tips f ...
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School: Boston College

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Running Head: PROJECT MANAGEMENT

1

Project Management
Name
Institutional Affiliation

PROJECT MANAGEMENT

2

To Bid or Not to Bid
Marvin’s company is deciding on whether or not to bid on a contract being offered by
one of the company’s major clients. Marvin needs to decide on whether the terms set by the
client are reasonable enough as the company feels that one of the fundamental requirements by
the client of the request for proposal (RFP) might hurt Marvin’s company future bids. The RFP
states that for Marvin’s company proposal to be considered, the company would have to release
the costs of the contract of each work package. Marvin has identified that fulfilling this
requirement means that they will be revealing to the client their full detailed cost structure which
will hurt in future bids as they cannot raise their prices as much as they would want if other
companies already knew their cost structure.
Marvin’s dilemma is that he cannot dismiss the contract requirement as the client has
stated that this requirement has to be fulfilled. Marvin can also not outright refuse to bid on the
project as the project seems to have many benefits. The first is that the client has stated that the
contract type will be cost reimbursable. A cost reimbursable contract means that Marvin’s
company will not be constrained to the limits of a fixed price contract as for this type of contract
the client will be responsible for covering expenses incurred by Marvin’s company over the
initial calculated cost. The second benefit Marvin sees in winning this contract is its longevity of
10 years, which means that Marvin’s company will have a steady stream of cash flow from this
business for the next decade. Other advantages include that working with the client would mean
the client would view Marvin’s company as more of a strategic partner as opposed to being just a
supplier. Winning the contract would also mean that Marvin’s company would have created an
acceptable standard for the client that would help them win other future and larger contracts.
Marvin has also identified that though profit margins might be lower on this and other

PROJECT MANAGEMENT

3

forthcoming contracts, the company will have a larger business base that will earn them greater
overall profits.
If Marvin’s company refuses to bid on this job fearing that releasing the company’s
structure is too much of a risk, their relationship with the client might go sour if the client
decided to remove the company from its bidder list. Bidding on the project also means that
competitors who view their cost structure might wish to lure Marvin’s company employees by
offering them more pay. Marvin needs to further assess the situation and ask himself other
questions. The first is whether or not his company is willing to accept lower profit margins from
this deals and future deals when bidding. The second is whether the company can retain their top
talent if the company’s competitors try to woo them with higher salaries. This means that the
company will have to match their competitors offerings to their employees or solely depend on
their employee's loyalty to the company and their refusal to move away from the company.
The third question Marvin needs to ask is if the company is ideally positioned to win the
contract when looking at the company’s competitors in the bidding process. Marvin’s company,
however, has an advantage as they already have a working relationship with the client. This is
important as studies have shown that bidding on contracts is more often easier for those
companies that already have a working relationship with the company offering the contract.
Marvin also needs to ask how the company’s reputation will be affected if they decided to reveal
their cost structure. The company must choose what is of more worth between losing an
advantage in future bids or gaining a lucrative contract of a minimum of 10 years.
Marvin and his company should bid on this job. This is because the positives of following
through with this deal outweigh the negatives. If Marvin and the company were to win the

PROJECT MANAGEMENT

4

contract means that they would have an assured excellent cash flow for the next 10 years. This
steady income gives the company time to refine its parametric and analogy estimation technique
for future bids. As Marvin and the client already have a good working relationship means that
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