Assignment
Instructions
1. Answer all questions, and ensure that your answers have the coverage, and are in the format, requested.
2. Present your own ideas.
3. Your answers should be properly referenced and reflect that you have undertaken research outside the study material.
4. All submissions will be in electronic form and produced using electronic word processing software such as Microsoft Word. Submissions may be submitted in PDF format, but only as long as the text can be properly checked (i.e. no scanned documents). Answers to numerical questions may be produced with an electronic spreadsheet, however all steps in any calculation procedure, should be clearly explained.
5. Please note that if plagiarism or cheating is detected in this assignment it will result in no marks for the assignment. Students should ensure they clearly understand the meaning of plagiarism and other forms of Academic Misconduct. In particular, students should understand that while they may collaborate with other students on the conceptual ideas in their assignments, the final written report submitted by each student must be unique, and must not contain the written or calculated material of (a) any other student in the course, or (b) by any other person without due acknowledgement - which includes proper citations and referencing. If you are unsure of what constitutes Academic Misconduct, please review the following USQ Policy link: https://policy.usq.edu.au/documents.php?id=14132PL
Guides for referencing and citation can also be found at the following link:
https://www.usq.edu.au/library/referencing
Question 1-
Project risk management
Risk management is an integral part of the technological project management process. Examples of risks that require management are risks arising from the project management process itself (such as risks in completion time, project cost, delivery quality, and scope creep), environmental risks, safety risk, legal risks and a range of other risks. Similarly, in asset development and management there is the risk of failure of assets because of poor quality construction and lack of maintenance.
Conversely, effective management of risks may lead to the development of opportunities.
Risks can lead to consequences like:
o financial loss o loss of life, or injury o heath impacts o damage to property o environmental damage o loss of image
They can also lead to benefits.
While some risks associated with technological projects (such as those arising from unforeseen events like certain natural disasters) may need to be accepted, most risks can be managed.
The risk management process is basically one of establishing the context of the risk, and then identifying, analysing, evaluating and treating risks in an integrated process. These tasks are supported by communication and consultation, and monitoring and review activities.
The effective and efficient management of risks has the potential for considerable savings in project time and cost and for the achievement of considerable benefits to the project and its participants.
Your task
Using an example real or fictitious project (for example, civil infrastructure project, building or property development, development of manufacturing or power generating plant, design project, maintenance project), write a structured report on the management of risk in the delivery of major technological projects. Your report should have a short abstract, followed by introduction, main and secondary headings, conclusions (recommendations) and references.
Areas to consider include:
1. discussion of the technological project management process and the risks in managing technological projects, including a discussion of the main risks that can arise and the likely source of those risks.
2. expected consequences arising from the occurrence of those risks.
3. an outline of the risk management process as it would be applied to a large technological project, including a discussion on how you would identify, assess, evaluate and treat risks.
4. strategic and operational aspects of managing project risk.
5. examples of how you would apply this process to selected risks.
6. how you as a manager would minimise the adverse effects of these risks, or maximise opportunities arising from their effective management.
7. the role of management systems in managing project risk areas.
8. a strategy to maximise benefit and minimise costs through effective and efficient risk management practices.
Comments
If possible, use one or more actual projects on which you are working or of which you have a detailed knowledge to illustrate your report.
When selecting risks with which to illustrate your discussion, concentrate on a particular stage of the project life cycle (such as planning, design, construction or development, operations, or maintenance). This will enable you to make focus on a particular set of risks and keep your discussion concise. It is also advisable to focus on a few selected key risks in depth rather than spread your discussion over many risks.
Word limit: 2000 words.
The study book contains some information relevant to this topic. However, one of the objectives of this assignment is to undertake research beyond the study material, and therefore you will need to access other sources of information.
For example, you should access the Australian/New Zealand Standard for Risk Management, AS/NZS ISO 31000:2009 Risk management - Principles and guidelines and the handbook HB 436:2004 Risk Management Guidelines Companion to AS/NZS 4360:2004 (AS/NZS ISO 31000:2009 supersedes AS/NZS 4360:2004). These, and a range of other Australian/New Zealand standards and guides on risk management topics, can be accessed on-line through the USQ library databases.
If you do not live in Australia or New Zealand, you may prefer to use risk management standards and practice from your own country rather than the Australian/New Zealand standards and guides.
There are books and other material available on technical risk management and project risk management, which you may wish to access. An example is:
Chapman, C & Ward, S 2003 Project risk management: processes, techniques and insights, Wiley, Chichester, UK.
You should also make use of the wide range of resources available on the internet, and journal articles. The USQ library has a number of on-line searchable databases which can be used to find useful articles.
Question 2-
Procurement scenario
A precast concrete manufacturer requires a new concrete-pipes plant and they have two possibilities. They can either invest $575,000 of their own funds in total, or take a loan for the whole sum and spread the payment over a 6 year period with payments starting in the first year.
The annual percentage rate (APR) for this loan would be 8%.
The new plant would generate annual income and associated costs according to Table 1. As the products will be sold to a foreign client, an exchange fluctuation rate (EFR) of 2% will need to be taken into account. Annual maintenance costs for the plant are also shown in Table 1.
If they take a loan for the plant, the company could also purchase a new concrete-blocks mould worth $100,000 without adding to the plant loan. It would generate an annual income according to Table 2. Annual maintenance costs are also presented in Table 2. In order to make a sound decision the management of the company is focusing on the first 6 years of operation (loan period).
Annual interest rate for company monies invested is in all cases 4% (r).
Table 1: Data for the new concrete-pipes plant - first year only.
Year Income Maintenance Interest rate APR EFR
1 $160,000 $5,000 4% 8% 2%
For the next 5 years, income has been projected to increase at an average rate of 15% annually, whilst maintenance is expected to increase by 10% annually.
Table 2: Data for the additional mould in case they take a loan for the above plant.
Year Income Maintenance Interest rate (r)
1 $50,000 $2,750 4%
For the next 5 years, income has been projected to increase at an average rate of 10% annually, whilst maintenance is also expected to increase by 10% annually.
Report Criteria
The assignment requires students to carry out a feasibility study for both procurement options as part of a recommendation report identifying which of the options provides the better financial result for the company over the long term. To back up their recommendation, students are required to provide a suitable economic analysis to show why they came to that conclusion. Students must also identify the approach they have used and provide justification for their approach. The report should be no longer than 1000 words and should be presented in a professional format.