You work for an automobile industry. The organization has initiated a project to upgrade the cars. The sponsor has appointed you as the Project Manager. For this project, one of the requirements is to have special electronic auto parts. Your organization has the capability to produce these auto parts. However, during the planning phase some stakeholders suggest that the production of the auto parts can be outsourced. But you feel that that there is a risk associated associated with it. it. Hence you decide decide to use the decision decision tree tool to figure out whether it is worth outsourcing or doing it yourself. After brainstorming along with the team, you identify the following values and the risk associated. Decision
Outcome
Probability In-house investment is $100
Impact Probability Impact
70% Gain is $120K 30% Loss is $30K
Probability Outsourcing investment is $40K
Impact Probability Impact
50% Gain is $100K 50% Loss is $10K
A. Use the Decision Tree tool and decide which option is better? Producing in-house or outsourcing—15 Minutes Irrespective of the Decision Tree outcome, you decide to outsource the electronic parts production. For this you need to Plan the procurement. With this process you can come up with a subsidiary plan. Many sellers in the market can produce these electronic parts. You need to evaluate and select a seller. To make this happen, you decide to develop Source Selection Criteria. B. Develop the relevant subsidiary plan and also the possible source election criteria list.—30 Minutes C. After the planning is done, you select the seller and give the contract. This process can be termed as an agreement. Develop a sample agreement which have these key elements. —20 minutes
As part of the control procurement process, you get the work performance data and report from the seller. The data says that 40% of work is completed whereas the seller is supposed to complete 50% of the work. It calls for a change request to bring the project on track. D. Briefly explain work performance data, work performance information, and work performance report. Develop a possible work performance data and work performance report documents for this scenario. Also explain the techniques which are used in this process to address the change.—15 minutes E. Once the procurement related activities are done, you use the close procurement process. List the techniques used under close procurements and write down a few lines about these techniques.—30 Minutes Total duration is 110 Minutes
