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Project Management Question Paper
Project Management
Course:Bachelor Of Science In Water And Environmental Engineering
Institution: Kenyatta University question papers
Exam Year:2009
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2009/2010
FIRST SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
SCIENCE (WATER AND MANUFACTURING ENGINEERING)
SET 401 :
PROJECT MANAGEMENT
=================================================================
DATE: TUESDAY 22ND DECEMBER 2009 TIME: 11.00 A.M. – 1.00 P.M.
INSTRUCTIONS
The Paper has Three (3) Sections i.e. A, B, & C.
Section A Compulsory for Water and Manufacturing candidates.
Section B (Water Engineering Candidates)
Section C (Manufacturing Engineering Candidates)
SECTION A (Compulsory)
QUESTION ONE (20 marks)
The BIZ construction company has listed the following activities for a water project.
Activity Preceding Duration
Activity
(days)
A -
2
B A 3
C A 5
D A 8
E B 6
F C 1
G C 2
H
C & D
3
I
E &F
7
J
G & H
4
K
I & J
5
Page 1 of 6
i)
Draw a network diagram and determine the critical path.
(8 marks)
ii)
Find out total float, free and independent float on non-critical activities.
(12 marks)
SECTION (B)
QUESTION TWO (20 marks)
Attempt any TWO Questions
a)
Explain giving examples the five main stages within the project cycle.
(10 marks)
b)
XYZ chemical company is producing two products A and B. the processing times are
3 hrs and 4 hrs per unit for A on operations one and two respectively and 4 hrs and 5
hrs per unit for B on one and two respectively. The available time is 18 hrs and 21
hrs for operation one and two respectively. The product A can be sold at sh .3 profit
per unit and B at sh. 8 profit per unit. Solve for maximum profit programme (only
formulate
the
problem). (10
marks)
QUESTION THREE (20 marks)
a)
Define the following terms as used in project appraisal.
i)
Profitable
index
ii)
Payback
period
iii)
Average rate of return
iv)
Net
present
value
(8
marks)
b)
The Kenya power and lighting company (KPLC) is considering signing a one year
contract with one of the computer based solution provider firms. Although one is
more expensive, it offers a more expensive program and thus will provide a higher-
tax cash flow. Assume these two options are mutually exclusive and the required rate
of return is 12%. Given the following after-tax net cash flows.
Page 2 of 6
Year
Option
a Option b
(Kshs.)
(Kshs.)
0 -50,000
-100,000
1 70,000
130,000
Calculate the net present value, profitability index and average rate of return.
(6 marks)
c)
Define internal rate of return (IRR) and give at least its four advantages over other
methods
of
economic
appraisal.
(6
marks)
QUESTION FOUR (20 marks)
a)
Give six common applications of network analysis in day to day life.
(3 marks)
b)
Explain how CPM differs from PERT .
(6 marks)
c)
Give FOUR advantages of network analysis in project management.
(4 marks)
d)
Explain the following terms
i)
Total
float
ii)
Free
float
iii)
Independent float
iv)
Gantts chart
(4 marks)
e)
Define project, activity and event in reference to network analysis.
(3 marks)
QUESTION FIVE (20 marks)
a)
Define the following terminology as used in decision theory
i)
Decision maker
ii)
The acts
iii)
Pay-off
(3 marks)
b)
State five processes that decision maker has to follow when getting a solution to any
problem.
(5 marks)
Page 3 of 6
c)
Oswal Agro Mills Ltd. (OAM) is considering whether to enter a very competitive
market. In case OAM decides to enter this market it must either install a new forging
process of pay overtime wages to the entire workers. In either case, the market entry
could result in (i) high sales, (2) medium sales, (3) low sales or (4) no sale.
i)
Construct an appropriate tree diagram.
ii)
suppose the management of AOM has estimated that, if they enter the market
there is a 60% chance of their stockholders approving the installation of the
new forge. (This means that there is a 40% chance of using overtime). A
random sample of the current market structure reveals that OAM has a 40%
chance of achieving low sales and a 10% chance of achieving no sales.
Construct
the
appropriate probability tree and determine the joint probabilities
for
various
branches.
iii)
Market analysts of AOM have indicated that a high level of sales will yield
sh. 1,000,000 profit; a medium level of sales will result in a Sh.600,000 profit;
a low level of sales will result in a sh. 200,000 profit; and a no sales level will
cause OAM a loss of shs. 500,000 apart from the cost of any equipment.
Entering
the
market
will
require
a
cash outlay of either shs. 300,000 to
purchase and install a forge or shs. 100,000 for overtime expenses, should the
second option be selected? Draw the appropriate decision maker diagram.
(12 marks)
Page 4 of 6
SECTION C
Attempt any TWO Questions.
6.
Production control is concerned with the ordering and monitoring of work in process.
It includes control of resources, materials, people and machines.
a)
What is the general aim of production
control?
(2
marks)
b)
Discuss project management situations that may give rise to the following
evaluation results
(9 marks)
PR = AR
PR = AR
PR = AR
c)
Discuss the major components of TQM in project management.
(9 marks)
7.
A project is a major undertaking involving many activities. Each activity affects the
overall project in terms of scheduled task completion timing.
a)
Outline various methods for estimating activity duration of a project.
(6 marks)
b)
Discuss the main components for three-point method (shown below) of
determining
activity
duration.
(6
marks)
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