I recently posted a problem much like the following one on the LinkedIn discussion group, Planners & Schedulers & Project Control Professional. It is the sort of problem or exercise I would give halfway through an undergraduate project management course. (By the end of the course, I'd expect even undergraduates to be able to handle much tougher questions.)

I would not expect a planner I'm interviewing (and who has not been through my course) to know certain terms, but I would expect them to be able to compute the values. So I would provide the following definitions:

1. The expected monetary value (EMV) of a project is what its expected to be worth if finished on a certain date.
2. The expected project profit (EPP) of a project is what its expected to be worth above cost if finished on a certain date.
3. A delay cost is the reduction in EMV if the project finishes later and an acceleration premium is the increase in EMV if it finishes earlier.
4. Critical path drag is the amount of time an activity or constraint is adding to the project duration.
5. Drag cost is the amount by which a project's EMV is lowered due to an activity's drag.
6. The true cost (TC) of an activity is the sum of its drag cost and resource cost.

Any planner who cannot answer the vast majority of these questions correctly in 30-45 minutes, given a pen and paper, is likely to generate a LOT of unnecessary pain for your projects!

****

The following is a list of eight project activities, with their durations in days and their budgets adding to $150,000 for the whole project. All logic relationships are FS with zero lag.

If the project finishes precisely at the end of Day 35, the expected monetary value (EMV) of the project will be $300,000. For every day later than Day 35 that the project finishes, the delay cost will be $25,000. For every day earlier than Day 35, the acceleration premium will be $10,000.

ACT., DUR, PREDS., BUDGET
A: 10D, None, $15,000
B: 10D, A, $30,000
C: 5D, A, $10,000
D: 5D, A, $25,000
E: 4D, B&C, $15,000
F: 15D, C, $20,000
G: 6D, C&D, $25,000
H: 7D, E&F&G, $10,000
 

1. What is the expected monetary value of the project if performed on this schedule?
2. What will be its expected project profit?
3. What are the total floats of each activity?
4. What are the drags of each critical path activity?
5. What is the drag cost of each critical path activity?
6. What is the true cost of each activity?
7. If the duration of Activity F could be reduced to 10D by tripling its budget, how much more or less would its true cost become? How much more or less would the expected project profit become?
8. The project starts on time with the original plan (i.e., F's duration = 15 days). At the end of Day 20, Activities B, C and D are all finished and no other activity has started yet. A and B finished on budget, but C finished $8,000 over budget and D finished $12,000 over budget. What is the current CPI? What is the projected cost estimate-at-completion based on the CPI? What is the projected cost estimate-to-complete based on the CPI?
9. If Activities E, F and G all start tomorrow morning (Day 21) and go exactly as originally planned, what will be the project's duration? What will be its EMV? What will be its EPP?
10. If the only possibilities are to either complete the project as planned or to terminate it now (with zero opportunity costs, termination costs or salvage value), what would you recommend to the project owner? Why?

If anyone wants to try posting their answers to these questions, I'll respond.

Fraternally in project management,

Steve the Bajan