Principles of Engineering, Paper II

An electronics company is considering the options of either (a) immediately proceeding with production of an innovative product which has just completed prototype testing or (b) having a value analysis team complete a study. If the company proceeds with option (a), the firm expects with a probability of 0.6, that sales would be 100,000 units at 550 e a c h , a l s o t h e r e e x i s t s a p r o b a b i l i t y o f 0.4 t h a t s a l e s m a y r e m a i n a t 75 , 000 u n i t s a t 550 each, also there exists a probability of 0.4 that sales may remain at 75,000 units at 550 e a c h , a l so t h er ee x i s t s a p r o babi l i t y o f 0.4 t ha t s a l es ma y r e maina t 75 , 000 u ni t s a t 550 each. If the company pursues option (b), the firm expects with a probability of 0.7, that sales would be 75,000 units at 750 e a c h w h e r e a s t h e r e e x i s t s a p r o b a b i l i t y o f 0.3 f o r t h e s a l e s t o r e m a i n a t 70 , 000 u n i t s a t 750 each whereas there exists a probability of 0.3 for the sales to remain at 70,000 units at 750 e a c h w h er e a s t h er ee x i s t s a p r o babi l i t y o f 0.3 f or t h es a l es t or e maina t 70 , 000 u ni t s a t 750 each. Value analysis, at a cost of $100,000 is only used in option (b) whereas no further cost factor needs consideration for option (a) as it is ready to be launched. Use decision tree analysis to recommend which option should be taken by the company.

An organisation has done some estimation of the complexity of four of its current projects and has ranked them out of 10 against the headings shown in the following table: Organisational Complexity Resource Complexity Technical Complexity Project 1 1 7 6 Project 2 4 4 5 Project 3 4 2 1 Project 4 2 9 4 In the absence of any further information, if the organisation wanted to apply the Prince 2 methodology to only one of the projects, which one would you recommend?