W21_RW_Lessons Learned (Soft Skill)

Introduction

The purpose of this lessons learned document of AACE Certification Preparation Course project is to captures the valuable experiences since inception of the project until the project close out for use by other similar projects. This document could be used by project mentor, program and project managers as well as project team members to avoid any similar project faults that went wrong and take the lessons from things that went well as well as improve the current practices to get the project excellence.

Lessons Learned Approach

The lessons learned from this project are compiled from individual project notes since inception until project close out. The lessons learned from this project is structured based on project’s deliverables such as face to face session, paper development, question, tool and technique, blog weekly report and bidding.

Lessons Learned from this Project

Lessons Learned Knowledge Base / Database

This lesson learned will be compiled with other student’s lessons learned and stored in Yahoo Group file as well as by the Mentor for his document for future use.

Lessons Learned Applied from Previous Projects

This AACE Certification preparation course project is less using previous course lessons learned.

Process Improvement Recommendations

As indicated in the table above, the major negative (-) what went wrong issues are more to the people issues which includes the commitment and knowledge of the subject. It is recommended for those who willing to take this course have to set the commitment firmly.

The half commitment student will drag the other team member motivation down. The strong leadership is required in this course to bring the class to success. Firing the non-performer team member or even the program manager or project manager sometimes is necessary action to be taken to safe our project, but I strongly urge to make it professional and not to bring it in personal.

 

 

Reference:

Lessons Learned Template retrieved from www.ProjectManagementDocs.com

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W20_RW_Lessons Learned (Technical)

Introduction

The purpose of this lessons learned document of AACE Certification Preparation Course project is to captures the valuable experiences since inception of the project until the project close out for use by other similar projects. This document could be used by project mentor, program and project managers as well as project team members to avoid any similar project faults that went wrong and take the lessons from things that went well as well as improve the current practices to get the project excellence. This lesson learned document will only show you the valuable tools and techniques I learned from the course.

 Lessons Learned Approach

The lessons learned from this project are compiled from individual project notes since inception until project close out. The tools and technique stated in this document have been tried and some implemented in my works as well as during the executing the course’s assignment.

Tools and technique learned from this course:

Engineering Economic Analysis Procedures
The procedure is strongly recommended by the mentor as writing blog format. It consist some steps such as:

  • Problem recognition, definition and evaluation, using “root cause analysis” or other tools/techniques
  • Development of feasible alternatives
  • Development of the outcomes
  • Selection of the acceptable criteria
  • Compare the outcomes from each alternative
  • Performance Monitoring and post evaluation.

What Went Well:

This practice is very useful for me when I did some project financial analysis and project proposal, the structure guide me in developing the project proposal for the high level management to take decision on it. The high level management received the key information of the project, the consequences, the alternatives, the outcomes and action proposed as well as the post evaluation of the projects.

The real case was when I did the proposal to purchase the expensive software for my department as part of continues improvement program, it was answering all the questions required prior to take a decision to go or no go and it got approved in very short time.

What Went Wrong:

It was very hard for me to implement in my blog assignment, as I have to switch from my past writing experiences to this structure procedure and mathematical modeling techniques. Some of my blog was rejected by the mentor because I’m not following the structure.

Recommendation:

I strongly recommend this tools and technique or procedure implement in works environment, as it can be used in broad.

Reference:

Lessons Learned Template retrived from : www.ProjectManagementDocs.com

W18_RW_Mutually Exclusive Project Selection with Benefit Cost Ratio

Disclaimer: All value in this blog is not real, it used to simulate to determine the economic life calculation.

Problem Statement:

My company has 5 alternatives investment projects with certain cost and benefit calculated previously, the data shown in the table below:

My boss ask me to compare those alternatives by using Benefit Cost Ratio (B/C) to determine which alternatives that has B/C>1.1

Acceptable Criteria

  1. Alternative which has B/C>1.1

 

Tools and Techniques:

From Sullivan’s Engineering Economy 15th Edition, chapter 10, section 10-9, Comparison of Mutually Exclusive Project.
Calculation:

Step 1. Rank the Cost of Alternatives from the smallest to the largest cost.

Step 2. Calculate the B/C ration from the smallest cost

Alternative E has 1.13>1.1 (acceptable) now it became a baseline to compare with other ranked alternatives.

Alternative D: (benefit D – benefit E) / (Cost D – Cost E) = 1.28 >1.1 (acceptable) now it became a new baseline

Alternative B: (benefit B – benefit D) / (Cost B – Cost D) = 1.25 >1.1 (acceptable) now it became a new baseline

Alternative A: (benefit A – benefit B) / (Cost A – Cost B) = – 4.5 <1.1 (not acceptable)

Alternative C: (benefit C – benefit B) / (Cost C – Cost B) = 0.33 <1.1 (not acceptable)

 

The conclusion:

From the above alternative comparison which mutually exclusive alternative using the incremental analysis we know that Alternative B has B/C=1.25>1.1, and this alternative B is recommended.

 

References:

Sullivan, W.G., Wicks, E.M., Koelling, C.P. (2009). Engineering Economy, Fifteenth edition. Pearson International Edition, 2012, Chapter 10, pages 436.

“Mutually Exclusive Alternatives” retrieved from http://www.oup.com/us/static/companion.websites/9780195161526/interactive/MEA/MEAIntro.htm

W17_RW_When Should I Replace my Car

Disclaimer: All value in this blog is not real, it used to simulate to determine the economic life calculation.

Problem Statement:

I just bought 3 years old used car, this car was bought with $20,000 it was in good condition, from the manual book I see there is a potential to replacing some major spare part beside the routine preventive maintenance. The detail data shown in table below, assume I have 15% personal interest rate per year. When should I replace this car?

Feasible Alternative:

  1. Continue using that Car until it cannot be used
  2. Replace the car at certain year to get the best economic value

Tools and Techniques:

From Sullivan’s Engineering Economy 15th Edition, chapter 9, section 9-6, Determining the economic life
Selection Criteria:

Equivalent Uniform Annual Cost (EUAC) > total margin cost is the best choice.

Calculation:

Deterimine the potential loss in Market value and cost of capital to get the total marginal cost.

Marginal Cost = Major Maintenance + Preventive Maintenance + Loss in Market Value + Cost of Capital

And now calculate the EUAC with 15% MARR.

 

The conclusion:

Using the car until it scrap is not a right choice at it will drain your pocket for increasing maintenance cost and lowering the market value. Sell the car at the 2nd year and purchase the new car is a good choice, in term of economic value it is the optimum years where we can get the reasonable market value compare with the maintenance cost, where the total Marginal cost is less then the EUAC (15%)

References:

Sullivan, W.G., Wicks, E.M., Koelling, C.P. (2009). Engineering Economy, Fifteenth edition. Pearson International Edition, 2012, Chapter 9, section 9-6 pp 391.

“Operation Research Model and Methods” retrieved from: http://www.me.utexas.edu/~jensen/or_site/models/supplements/netmodel/S1_ecolife.pdf

“Equivalent Annual Worth” retrieved from : http://www.oup.com/us/pdf/engineeringecon/Chapter06.pdf

W16_RW_Road Type Selection using Capitalized Worth method

Disclaimer: All value in this blog is not real, it used to illustrate the Capitalized Worth method only.

Problem Statement:

The district government is facing the point to decide the type of 10KM of public road to be constructed, there are two alternatives of road type, Asphalt and Concrete based road.
The Asphalt road will require the initial investment $1,000,000 with annual maintenance cost of $20,000 and $200,000 major maintenance for every 10 years. While the concrete road will require the initial investment $2,000,000 with the annual maintenance cost of $10,000 and $300,000 for major maintenance for every 15 years.
What is the best alternative road type using the Capitalized Worth (CW Method) if the MARR = 15%?

The Feasible Alternatives:

  1. Concrete Road
  2. Asphalt Road

Tools and Techniques:

From Sullivan’s Engineering Economy 15th Edition, chapter 5, pp 187, the Capitalized-Worth Method CW(i%) = AW(1/i)
Selection Criteria:

The greater CW is the best selection.

Capitalized Calculation:

  1. Asphalt Road

The cash flow diagram

CW(asphalt) = -$1,000,000-$200,000(A/F,15%,10) / I – $20,000/i

= -$1,000,000-$200,000(0.0493) / 0.15 – $20,000/0.15

       = -$1,199,067

B.     Concrete Road

The cash flow diagram

CW(concrete) = -$2,000,000-$300,000(A/F,15%,15) / I – $10,000/i

= -$2,000,000-$300,000(0.0210) / 0.15 – $10,000/0.15

       = -$2,108,667

Because of CW(asphalt) > CW(concrete), then the best option among these alternatives is ASPHALT ROAD.

Conclusion:

The Capitalized Worth for public facility is not considering the revenue, so then the CW value will be negative number. Now the district government selection will be the Asphalt Road, with the assumption all supporting data is correct. The district government would plan to present it to the higher government level.

References:

Sullivan, W.G., Wicks, E.M., Koelling, C.P. (2009). Engineering Economy, Fifteenth edition. Pearson International Edition, 2012, Chapter 5, pages 187.