Lecture Project management: A managerial approach – Chapter 2: Strategic management and project selection

Chapter 2 describes how to evaluate and select projects that contribute to the organization’s strategy and discusses the information needed as well as the management of risk during this process. The chapter concludes with a description of an eight-step procedure called the “project portfolio process” that aligns project selection with the strategy.

Project Initiation

Project Management

Strategic  Management and 

Project Selection

Problems With Multiple Projects

Types of Project Selection Models

 Product Line Extension

evaluated on how well the new product meshes with  the existing product line rather than on overall 

Q­Sort Method

project that can be easily compared with other projects

4 000

, 25

$

000 ,

100

$ Period

Payback 

Flow Cash 

  Annual

Cost

Project  Period

Payback 

F A

k

=

+

939,

1

$

03.015

.01

000,

25

$000

,100

$ 

(project) 

1

calculator or computer

Profitability Index

Numeric Models: Scoring

Example

Weighted Factor Model Example

Numeric Models: Discovery­Driven  Planning

 Has slipped in  desirability

Step 7: Select the Projects to be Funded  and Held in Reserve

Step 8: Implement the Process