Question & Answer: Contrast the three types of nonnumeric project selection methods. Could any specific case…..

Ans: Choice of right method for project selection is important to its success. The methods of project selection are divided into two segments, viz. Numeric methods and non numeric methods. The former method does not involve the use of number inputs. Some non numeric methods are listed below.

1. Sacred cow method – Where selection is done by the top management and it must be implemented.

2. Operating necessity – Where the project is a necessity to keep the systems running.

3. Competitive necessity – Project is nencessary to remain competitive in the market.

4.Product line extension – The project done to introduce new products as an addition to the existing line up.

5.Comparative benefit model – The project which is most beneficial to the firm will be selected.

6.Q sort method – Here the project is chosen on the basis of relative merit by dividing all options into categories.

Considering the first three methods, we see that the first type is selected purely on the basis of top management’s recommendation. It is non negotiable preposition where no one questions the rationality of the project and it must be selected.The second type is born out of necessity, where the selection is done keeping in mind that system must continue to function. A example of this type is the reinforcement of river banks before onset of flood season. The third is the condition where the project must be selected to remain competitive in the market. An example of this kind is coming up with a new model of car by a famous auto company after implementation of new emission laws that make old automobiles redundant.

Selection methods in all three cases are situation and need based, depending upon the careful evaluation of evironment and alternatives.

Being fact based evaluative methods, there may be one or more than one approach to project selection. For example, the sacred cow and operating necessity methods can both be combined together in a situation where,a decision to prevent the plant from the floodwater has to be taken immediately, with decision making vested completely with the seniormost member of the management. The combination of comparative benefit and competitive necessity methods may be combined where the organization has a number of choices for vendors, one of which must be selected by the end of the week to get prepared for launch of new educational service portal before the start of new academic session after two weeks.