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QUESTION #3:
(addressing SLO #3 – formulate and assemble component ideas in order to successfully execute a project plan &SLO#4 – analyze information in order to formulate effective solutions)
‘Fire extinguishing balls’ are recently entering the market for passive fire prevention. As an entrepreneur, you decided to start a business to sell these fire extinguishing balls within the USA. You have very limited number of competitors, and these few competitors are not just selling the fire extinguishing balls. They also sell other fire extinguishing tools and equipment. You will be the pioneer in the market if you act quickly to dominate the fire extinguishing ball business.
Questions to be answered:
1- Identify and analyze the risks associated with this business endeavor by utilizing any qualitative method. Plan the risk response.
2- Develop a tentative plan to establish this business. Create a work breakdown structure, and a Gantt chart. Clearly show the resources (including labor, materials, etc.), and logical relationships between the tasks. Estimate the costs of the tasks also. Clearly explain how you estimated the costs, and how you determined the relationships between the tasks. Work breakdown structure needs at least 3 levels. Your budget is $150,000. You can build storage, distribution centers, management office etc., to ensure a smooth business. You can import the materials from overseas. It’s entirely up to you, since this is your business and your plan.
3- Assume that 2 weeks after your project plan started, you took a field report. You saw that all the activities that were scheduled until week 2 is 50% completed. What method/tool would you use to estimate the budget at completion, or the new estimated duration of the project? You do not have to make calculations. Clearly list and explain what to use.
1000 words + Gantt chart
Expert Answer
1.
The risks associated with this business endeavor are-
- Since no other player exists in the market, you don’t have any industry trends etc.
- Instead of market penetration, market creation is required.
- Customer/Client education is also required. The potential clients may not be aware of the product.
2.
The plan would involve renting a warehouse and setting up a management (Head office) at the very start. Then the material procurement would take place. This will be stored in the warehouse and then a workshop could be set up in the nearby area for any value addition which is taking place. Here simultaneously we are also hiring the people. Few initial appointments would include a manager/supervisor to head the venture. This guy would look into multiple aspect from raw material procurement to availability of skilled labor etc. So getting hold of such ‘a key personnel’ can be crucial. Then once we have the set up done, the labor can be hired.
The plan to establish the business would have a budget as follows-
| Warehouse Rentals | $12,000 |
| Distribution Place | $45,000 |
| Rent – Head Office | $5,000 |
| Material | $51,000 |
| Labor Charges | $4000 |
3.
The tool that can be used to estimate the project is ETC (Estimate to Complete). This technique tells you how much money will be requiring completing the project.
