INTERNATIONAL CAPITAL CORPORATION

Presented By:Amit KumarVarsa Avtar

Rohitash GhaiDebasree Saha

Jyoti Punj PrakashSwapnil Nishant Minz

Prashant Kumar Sharma

0 A small investment banking0 Specializes in securing funds for small to medium

sized firms.0 Use a standardized project format for each

management0 Have a policy of passing their plan through a project

review committee of colleagues

ABOUT CASE

0 Programme Evaluation Review Techniques0 Critical Path Method

PROJECT TIME MANAGEMENT

0 Pert was developed by a consulting firm in 19580 Pert Uses Three time estimates for each activity0 Each activity duration can range from an optimistic

time to a pessimistic time0 Weighted average can be calculated for each activity0 Weightage average activity time = a + 4m + b 6

PROGRAMME EVALUATION REVIEW TECHNIQUES

Where, a = Optimisticm = Most Likely b = Pessimistic

0 Then we calculate the standard deviation for the activity which represents the standard deviation for the project.

0 This is also called variance0The equation below is used to compute the “ Z

(Number of standard deviation from the mean) ” 0 Z = Ts - Te √ (sum of variance)^2 [The sum includes only activities on the critical path(s) or path being reviewed]

Contd……

0 Developed in 1957 by Dupont Company, Remington Rand and Mauchy Associates in an industrial setting.

0Systematic approach0Greatest reduction in project duration0Least cost0CPM assumes that the time to perform any project

activity depends on the efforts or resources

CRITICAL PATH METHOD

0 Completion time for a project can be shortened by additional resources

0 Cost is dependent on time.0 Cost slope= Cc-Cn Tc-Tn

Using the formula the shortest possible completion time for the activity can be calculated.

Contd….

Where, Cc= Crash costsCn= Normal costsTc= Crash time Tn= Normal time

0 Probabilistic0Pert considers optimistic,

likely and pessimistic time for any task.

0 Based on probability0PERT is more suitable for

R & D related projects.

0 Deterministic0CPM takes only a single

time for any task.0 don’t consider probability0 CPM is best suited for

routine projetcs

DIFFERENCE BETWEEN CPM & PERT

Securing Funds

Project Planning

●Research Client Firm● Rough Draft● Coordinate needs proposal with Clients

Estimating Future

Demand & Cash Flow

Documentation

Create & Approve

Legal Documents

Print Final Documentati

on

Raising Fund

Create first draft

proposal

Line up sources of

capital

Sign Contract

Transfer funds

WORK BREAKDOWN STRUCTURE

Activity OPTIMISTICa

MOST LIKELY

m

PESSIMISTICb

Weightage average activity

time

(b-a/6)^2

A 4 7 10 7 1B 2 4 8 4 1C 2 5 8 5 1D 16 19 28 20 4E 6 9 24 11 9F 1 7 13 7 4G 4 10 28 12 16H 2 5 14 6 4I 5 8 17 9 4J 2 5 8 5 1K 17 29 45 30 22

0 A 7

0 Draft using templates

0 7 7

0 B 4

3 ResearchClientFirm

3 4 7

7 C 12

0 Due Diligance

7 5 12

38 J 43

0 Check, approve and print

38 5 43

30 I 39

4 Line up Sources

34 9 43

32 H 38

0 Integrate Draft

32 6 38

23 F 30

2 Draft Future Plan

25 7 32

12 G 24

8 Legal Document

20 12 32

12 E 23

2 Future Demand and cash flow

14 11 25

12 D 32

0 Need Proposal

12 20 32

43 K 73

0 Sign Contract

43 30 73

0Chance of average (70) with initial plan (73)0Z = (TS – TE) / Sq. root of sum of variance

0 Critical path is A,C,D,H,J,K0Z = (70 – 73) / Sq. root of 33 = -3 / 5.7 = -0.520 The probability is 31 percent.0 This does not meet the 95% criteria

Q.1 How does this project stack up with the average projects?

0Getting to the average of 70 days and increasing the chance of making it would require compressing the project.

0Z = (TS – TE) / Sq. root of sum of variance

0 1.7 = 70-Te Sqr. Root of 33 = 60.31 days0This would require compression down to 60 days from

the current plan of 73 days. 0Compressing to 60 days will improve the chance of

meeting the 95% confidence level but probably increase the risk.

Q.2 What would the average have to be to ensure a 95 % chance of completion the project

in 70 workdays?