MODULE 4

Assignment 4

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Learning outcomes:

LO4: Create a work breakdown structure.

LO5: Assess project risks according to their likelihood and degree of impact.

Name:
1. Instructions and guidelines (Read carefully)
Instructions
1. Insert your full name and surname in the space provided above. Save the file as:
Initials_Surname_A4 – e.g. L_Smith_A4. NB: Please ensure that you use the name that
appears in your student profile on the Online Campus (OLC).

2. Write all your answers in this document. There is an instruction that says, “Start writing
here:” under each question. Please type your answer on the line immediately below this
prompt or, if there is a numbered list for multiple points, then answer each point on the
same line as each number in the list. Do not delete “Start writing here:”!

3. Submit your assignment in Microsoft Word only. No other file types will be accepted.

4. Do not delete the plagiarism declaration or the assignment instructions and guidelines.
They must remain on your assignment when you submit.

PLEASE NOTE: Plagiarism cases will be penalised according to the Head Tutor and
GetSmarter's discretion.

IMPORTANT NOTICE: Please ensure that you have checked your course calendar for the due
date for this assignment.

Guidelines
1. There are 14 pages and 3 questions in this assignment.

2. Make sure that you have carefully read and fully understood the questions before
answering them. Answer the questions fully but concisely and as directly as possible.
Follow all specific instructions for individual questions (e. g. “list”, “in point form”).

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3. Answer all questions in your own words. Do not copy any text from the notes, readings
or other sources. The assignment must be your own work.

Plagiarism declaration:

1. I know that plagiarism is wrong. Plagiarism is to use another’s work and pretend
that it is one’s own.
2. This assignment is my own work.
3. I have not allowed, and will not allow, anyone to copy my work with the intention
of passing it off as his or her own work.
4. I acknowledge that copying someone else’s assignment (or part of it) is wrong, and
declare that my assignments are my own work.

2. Mark allocation
Each question receives a mark allocation. However, you will only receive a final percentage
mark and will not be given individual marks for each question. The mark allocation is there
to show you the weighting and length of each question.

Question 1: Work breakdown structure 20

Question 2: Risk management and outsourcing risk 20

Question 3: Probability theory calculation 5

TOTAL 45

3. Questions
Assignment instructions
Complete Questions 1 to 3 in this document. Make sure that you use your own words when
completing this assignment. Ensure that you have read the notes for Modules 1 through 4
before you complete this assignment.

Complete the entire assignment in this document. All questions in this assignment are based
on the fictional scenario described in Assignment 2 and expanded upon below i.e. the
scenario in this document continues the scenario started in Assignment 2, and the parts of
Assignment 2 and this assignment combine to form the scenario for this assignment.

Note that your answers for Assignment 2 are to be ignored; only the scenario given to you
below is to be referenced in this assignment.

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Do not change or edit any part of this document’s formatting (e.g. font size, font colour,
headers and footers, etc.). The formatting should remain as is.

Scenario
(Part 2a)

It’s Monday 30th January 2017. With two weeks behind you in your new job at LES, you’ve
settled into your new role comfortably: you’re getting to know the business, its products and
services, and you’re building good relationships with your colleagues.

You’ve also enjoyed convivial dealings with people outside the LES group, like Stacey and
Mncedi at Execu-Global travel agency, and Joseph, logistics manager at Crossroads Hauliers.
These new associates have been helpful in supplying quotes promptly and handling your
many enquiries to ensure the accuracy of the programme’s plans and budgeting. The
programme’s planning project has been intense and you’ve already worked a few hours
overtime in your first few weeks.

To improve the programme’s control and risk management, Louise wants the work that is
specific to each community to be handled as 25 separate sub-projects within the execution
project. This method also means we can design the project process for one sub-project and
simply repeat the formula for the remaining 24.

The type of work to be done for each community entails:

 Receiving the units from the factory;

 Transporting them to the site;

 Couriering the training materials;

 Storage and security;

 Travel by technicians and trainers;

 Installation and testing;

 Training, control, and progress reporting;

 Handing over; and

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 Ending with a final quality check and sign-off by Anton (among other work not
mentioned here).

Louise wants each sub-project to be rolled out in phases (or life cycles), with the Level 1 WBS
components (i.e. the level in the WBS just below the sub-project’s name at the top of the
WBS) involving the following four work categories:

1. Logistics

2. Training

3. Installation

4. Hand over

You’ve impressed Louise with your attention to detail and your quick study in learning the
ropes on this complex programme, so she wants to test your knowledge of work breakdown
structures. She has a few questions for you and asks you to draft the WBS of the sub-project
for the first community.

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Question 1
1.1 What is a work breakdown structure (WBS)? Please use your own words when defining
this term. (Max. 3 lines)

Start writing here:

1.2 Describe three criteria for successful WBS design. Please use your own words when
describing each criterion. (Max. 2 lines per criterion)

Start writing here:

1.

2.

3.

1.3 Prepare the first 2 levels of the WBS for the first installation sub-project, i.e. 1 of 25.

Instructions:

1. Create between 4 and 6 WBS components on Level 1 using the categories of work
listed in the scenario on Page 4 (i.e. you must use logistics, installation, training,
hand over, plus another 2 summary activities of your own naming if you think this is
necessary). At your discretion, Level 1 WBS components can be work packages or
summary activities.

2. For each summary activity, create at least 2 and no more than 4 work packages.

3. Don’t break down the WBS beyond Level 2 (i.e. project title = Level 0).

4. Create your WBS using the outline format (i.e. as an indented list, also known as
“list format”) and use numbering and indenting tools in Microsoft Word to create
your WBS. Do not draw boxes and lines, i.e. do not create a WBS using the graphical
format.

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Tips:

 Follow the criteria for good WBS design.

 See Table 1 of Module 4’s course notes for an example, but do not create a table;
merely type each WBS component on its own new line in the space after “Start
writing here:”
 Remember that any project’s WBS must comply with the 100% rule (see Unit 2’s
notes) and show all the project work: assume that each sub-project must run as a
self-contained project, i.e. that if it is run independently of the other projects and
work in the programme, it would run successfully and no work would be missing or
out of scope.
 Make sure you read the above instructions carefully.
Start writing here:

1.4 Choose any single work package that you noted in your WBS in Question 1.3 and answer
the following questions:

a) Name the work package and its corresponding WBS ID. (Max. 1 line)

Start writing here:

b) Specify the completion criteria of the work package named in a). Think of completion
criteria as answering the following question, “What evidence will exist to prove that the
work package is complete and its product ‘correct’?” (Max. 2 lines)

Start writing here:

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1.5 If you used the prescribed summary activities in the WBS you created in Question 1.3, it
will be a process-orientated WBS that shows the life cycle of the project at the Level 1 of the
WBS.

a) Louise wonders whether the process-orientated method of organising the sub-project

WBSs is the best method or if there is a better method. Name an alternative WBS method of
organising any project’s work and briefly describe the distinguishing criteria for this alternate
WBS method. Ensure your alternative method is not a variation or synonym for process-
oriented. (Max. 2 lines per cell. Don’t adjust the table’s formatting.)

Name of alternative method Criteria

Start writing here: Start writing here:

b) Explain to Louise your understanding of the advantage of the process-oriented method

over the method you identified in 1.5 (a). Be sure to discuss specific benefits and not merely
the distinguishing features of each method. Your answer must be relevant to the scenario.
(Max. 3 lines)

Start writing here:

c) To demonstrate to Louise a practical example of the relative advantages of each WBS

method over the other, you introduce an example unrelated to the LES programme. You
have recently acquired a new property, and you want to build a greenhouse in your
backyard. Explain to Louise why you would choose the WBS method you identified in
Question 1.5 (a). Be sure to describe the specific advantages of this method over the
process-orientated method for building your greenhouse, i.e. don’t discuss merely the
distinguishing features, which should have already stated in column two of your answer to
Question 1.5 (a). (Max. 3 lines)

Start writing here:

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© 2018 UCT / GetSmarter
All Rights Reserved

Tel: +27 21 447 7565 | Fax: +27 21 447 8344

Website: www.getsmarter.com | Email: [email protected]
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Scenario
(Part 2b)

We’re now in the last week of February 2017 and we’ve encountered several bumps in the
road, some major and others a bit less stressful.

Our programme schedule showed that we had a comfortable one-month gap between our
original forecast delivery end date and the contractual deadline for delivery of 30 November
2017. However, the Department of Trade and Industry (DTI) informed us today that payment
of their first instalment might be two weeks later than the expected date in mid-March.

Remember that our funding agreement states that we can only start implementing units in
the communities once we’ve received DTI’s first payment. DTI says we can expect the
deposit towards the end of March, but they’re reluctant to commit to a specific date. The
impact of the two-week delay in payment in the critical path is that our final delivery could
be delayed by up to one month.

Because we can’t count on when we’ll get DTI’s payment, we can’t yet confirm our allocation
of trainers and installation technicians to their activities with Sean and Anton respectively.
They both need two weeks’ notice in order to assure the availability of their people and,
without sufficient notice; they might only be available after we need them.

Because of the two-month lead time with the factory, a purchase order for the units to be
installed in the first ten communities was placed with Julie on 23 rd January. She usually gives
us two weeks’ notice of the date on which orders will be ready for collection, but she can’t
confirm their due date yet. In fact, she says that they’ve had some issues increasing their
capacity on the production line and that the first units might only be ready in the last week
of March – her tone suggested this was ambitious.

Either way, once Julie confirms the first units expected ready date, the bookings with
Mncedi and Joseph can be confirmed by placing our purchase orders with them. Joseph also
needs two weeks’ notice to assure alignment with our schedule, while Mncedi is happy to
take our flight bookings until the last minute, even as we’re driving to the airport to catch
the flight we haven’t yet booked with him (Jake often does this).

We’ve also encountered some resistance from community leaders at some of the “hotspot”
communities. They are demanding that they are trained to install their own units and
threaten to deny access to our technicians.

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In addition, we’ve caught wind of a growing labour dispute between the long-haul truck
drivers’ union and employers in the industry. Details are sketchy, though Joseph thinks we
shouldn’t worry about this affecting Crossroads Hauliers.

To compound matters, Fred informed us that both factories’ wind turbine power generator
suppliers will be increasing their prices by up to 15% around June or July due to the
weakening ZAR-USD exchange rate, which is affecting the prices of their electronic
components imported from China and Malaysia.

Fred says that if there is any increase in the factory’s selling price of units that include wind
turbines, it might only happen after a few weeks’ lag.

Some of these risks and issues seem like show stoppers and seem unresponsive to our
attempts to resolve them. Our funding contract with Eskom and DTI doesn’t allow for
avoiding any troublesome communities and the deadline – and the penalties for late delivery
– seem immutable.

Because Louise and the two PMs in the programme are snowed under with issues, Louise
has asked you to update the risk assessment matrix. As a way of avoiding the truck drivers’
labour issues, management is exploring handling LES’s trucking and travel agency operations
internally. Louise, therefore, wants you to research the risks and benefits of outsourced
trucking and of the travel agency for this programme. Lastly, she wants you to run some risk
calculations to be included in a business case for owning our own small trucking fleet.

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Question 2
Note that Question 2 builds on content from Module 3.

2.1 On the next page, complete the risk assessment matrix template with the following
information:

 Identify what you believe are the two biggest risks that, if they were to materialise,
would seriously jeopardise the success of the entire programme, i.e. don’t discuss
minor risks. Ensure that your answers are based on the information in the scenario
(Part 2b). Write each risk in its own row in the risk assessment matrix provided. Do
not list issues.
 Risk name column: Write a short, descriptive title for the risk.
 Risk description: Qualify each risk by distinguishing between the risk conditions or
risk cause and how the risk might affect the programme’s success, i.e. note both the
risk conditions and if the risk were to manifest as an issue, its impact on the project.
 In columns 4 to 6, rate each risk’s probability and impact, and then determine the
risk score for each risk using its probability and impact.
 In the last column, “Risk containment plan”, write at least one tactic for responding
to the risk.

Note: Please do not change the table’s properties, e.g. font size, table dimensions. Do not
add rows.

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Risk assessment matrix:

Risk description (cause and

Ris Risk name Probabilit Impac Risk containment plan
effect) Score
k ID (Max. 2 lines) y t (Max. 4 lines)
(Max. 4 lines)

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2.2 What is the difference between a known and an unknown risk? (Max. 4 lines)

Start writing here:

2.3 What is the difference between business and project risk? Make sure you provide a
definition for each risk type as well as an example to illustrate the meanings thereof. (Max. 8
lines)

Start writing here:

2.4 Louise is considering taking over and insourcing the work that is currently outsourced to
Crossroads Hauliers and Execu-Global travel agency to avoid risks to which the programme is
exposed by outsourcing this work. Louise asks you to identify the three biggest risks that can
be avoided by handling the trucking of units and travel bookings internally within the
programme. Be sure to word your answers clearly so that the risks you list are exclusive to
outsourcing and cannot apply to insourcing, hence they can be avoided by switching to
insourcing. Make sure that your answers are related to the scenario content. (Max. 2 lines
per risk)

Start writing here:

1.

2.

3.

2.5 Compare the risks of outsourcing versus insourcing within the LES group again. Name
three risks that you would be trying to avoid by continuing to outsource the administration
of travel bookings and the trucking operations on this programme instead of handling these
functions within LES. Make sure that your answers are related to the scenario content. (Max.
2 lines per risk)

Start writing here:

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1.

2.

3.

Question 3
Assume LES bought two second-hand trucks and hired a team of drivers and loaders for each
truck to deliver units to client sites. Louise and Teresa would like to know the extent of the
financial risk LES is exposed to if:

 The trucks are bought in March 2017 and sold immediately after the programme
completes delivery of the last unit i.e. in November 2017;
 During this period of ownership, the probability of R200,000 damage to truck A is
30% and the probability of R150,000 damage to truck B is 20%; and
 The probability of no damage is 50%.
What is the expected combined risk value attached to this fleet of two trucks?

Show and explain your calculations clearly. (Max. 5 lines)

Start writing here:

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