Project Management A Managerial Approach 9th Edition Meredith Solutions Manual

Project Management A Managerial Approach 9th
Edition Meredith Solutions Manual download pdf
https://testbankfan.com/product/project-management-a-managerial-
approach-9th-edition-meredith-solutions-manual/
Visit testbankfan.com to explore and download the complete
collection of test banks or solution manuals!

We believe these products will be a great fit for you. Click
the link to download now, or visit testbankfan.com
to discover even more!
Project Management A Managerial Approach 9th Edition
Meredith Test Bank
approach-9th-edition-meredith-test-bank/
Meredith Solutions Manual
approach-8th-edition-meredith-solutions-manual/
Meredith Test Bank
approach-10th-edition-meredith-test-bank/
Marketing Canadian 3rd Edition Grewal Test Bank
https://testbankfan.com/product/marketing-canadian-3rd-edition-grewal-
test-bank/

Operations Management 11th Edition Stevenson Test Bank
https://testbankfan.com/product/operations-management-11th-edition-
stevenson-test-bank-2/
Financial Accounting Information for Decisions 6th Edition
Wild Test Bank
https://testbankfan.com/product/financial-accounting-information-for-
decisions-6th-edition-wild-test-bank/
Argumentation The Art of Civil Advocacy 1st Edition
Underberg Test Bank
https://testbankfan.com/product/argumentation-the-art-of-civil-
advocacy-1st-edition-underberg-test-bank/
Principles of Macroeconomics 8th Edition Mankiw Solutions
Manual
https://testbankfan.com/product/principles-of-macroeconomics-8th-
edition-mankiw-solutions-manual/
Economics 11th Edition Arnold Solutions Manual
https://testbankfan.com/product/economics-11th-edition-arnold-
solutions-manual/

Physics An Algebra Based Approach 1st Edition Mcfarland
Test Bank
https://testbankfan.com/product/physics-an-algebra-based-approach-1st-
edition-mcfarland-test-bank/

Project Management: A Managerial Approach, 9th
edition Instructor’s Resource Guide
Copyright ©2015 John Wiley & Sons, Inc. Chapter 7 - 1
Chapter 7
Budgeting: Estimating Costs and Risks
CHAPTER OVERVIEW
Overview – This chapter describes the process of estimating and then assembling the
project budget. The budget is an important part of the planning process as it describes
the plan for allocating project resources. Once the budget is set, it is used as part of the
project control mechanism during execution.
7.1 Estimating Project Budgets – The budgeting process involves the forecasting of the
level and type of resources needed to complete the project. Many organizations will
have well worn (and reasonably accurate) methods for creating the initial project
estimate based on past experience. It is important to remember, however, that
because every project is unique the estimating process always has some level of
uncertainty associate with it. The PM must understand the organization’s accounting
practices to the extent that they are imposed on the project budgeting and control
process.
• Top-Down Budgeting – This is the technique of developing a budget by
comparing this project to past ones using the judgment and experience of top
and middle management. Typically an overall budget is assigned to the project to
be distributed to the individual tasks. If the projects being used for comparison
are similar enough, this process can result in a fairly accurate total number. The
process of distributing the total can create a lot of conflict among the
management team.
• Bottom-Up Budgeting – This is the process of developing budgets by asking the
people who will perform the individual tasks for their estimates. These individual
numbers are then rolled up to a summary for presentation to management. It’s
important in this process to follow a good WBS to ensure that no tasks are
overlooked. Unfortunately, this process can lead to game playing when
individuals pad their estimates in anticipation of management cuts.
• Work Element Costing – Using the bottom-up estimates, costs can be applied t o
each WBS element. These are typically calculated by taking the labor hour
estimate and “dollarizing” it using appropriate labor and overhead rates. To be
accurate, the estimator needs to understand the relationship between the labor
estimate and the actual number of hours that will be charged to the project
because of personal time and inefficiencies. A similar process must be used if
machine time or other resources are charged to the project.
• An Iterative Budgeting Process – Negotiation-in-Action – Typically the budgeting
process requires some negotiation between the subordinate, who develops the
WBS plans for the tasks for which he is responsible, and the supervisor who
reviews these plans. This is a time-consuming process. At the same time the PM

is negotiating with the several subordinates responsible for the pieces of the
PM’s WBS. It is worth emphasizing that ethics is just as important in negotiations
within an organization as in negotiations between an organization and an outside
party.
• Comments on the Budget Request Process – The bottom-up process differs from
the departmental budgeting process many organizations use. The primary
difference is that the departmental process typically comes with guidelines (either
formal or informal) on how much budget change is considerably acceptable.
• Cost Category Budgeting vs. Project/Activity Budgeting – Organizations may
budget and collect cost by functional activity. This makes it very difficult to
monitor project costs when they are distributed among a variety of different
organizational units. Project budgeting on the other hand collects project cost
using the WBS. This allows the PM to monitor cost in a manner that supports
overall project objectives.
7.2 Improving the Process of Cost Estimation – Estimates by nature are always wrong.
It’s important to build contingencies into the process or to account for uncertainty in
some other way. One way to do this is to use the PERT process of developing likely,
optimistic, and pessimistic estimates. In addition, the PM must understand whether
overhead cost is part of the estimate or not.
• Learning Curves – Studies and common sense have shown that as people
repeat a task they get better at it. This idea is formalized in the concept of the
learning curve, which states that each time the output doubles the worker hours
per unit decrease to a fixed percentage of their previous value. This effect is
important because the estimator must determine the impact learning had on past
projects (and their rates) and predict its impact on the one being estimated.
• A Special Case of Learning – Technological Shock – Projects that involve new
technologies or processes are very difficult to estimate because past
performance is not a useful guide. This is true not only because the rates are not
applicable, but because there is typically a lengthy startup process before steady
state performance is achieved.
• Other Factors – A number of other factors influence the project budget:
i) Changes in resource costs due to factors like inflation
ii) Waste and spoilage
iii) The fact that people, as resources are not freely interchangeable with each
other. The project may require five people, but if they are not the right people,
the number available is irrelevant.
iv) Projects cannot be put back on schedule by adding an infinite number of
resources. For intellectual projects like software development, the addition of
more people may actually slow the project down. Even for more mundane
tasks like painting a building there is a limit as to how many people can be
added to the project with benefit.
• On Making Better Estimates – Data can be collected on the quality of project
estimates by using statistical techniques. The estimate is compared to the actual,

and statistics like the Mean Absolute Ratio (MAR) and the Tracking Signal can
be calculated. These are all used to detect bias or nonrandom error in the
estimate.
7.3 Risk Estimation – Project aspects such as duration of activities, amount of resources
to utilize, value estimation etc., are very uncertain in a typical project. It is important
to manage this ambiguity to allow the project manager to make better decisions
when the situation arises. This is done through risk estimation and analysis, a
technique that describes uncertainty in a way, that it becomes possible, although
with a few reasonable assumptions, to make project activity decisions in an insightful
manner.
• General Simulation Analysis – A very useful tool to evaluate projects in
conceptual stage is simulation combined with sensitivity analysis. A through
estimation of the various tasks is made and the uncertainty associated with each
task is included. Simulation runs then show the likelihood of realizing various
levels of costs and benefits. Investigation of the model may also expose the
major sources of uncertainty.
TEACHING TIPS
Estimating and budgeting are dry subjects. Students who actually have to perform this
process on real projects, however, will be very interested in practical guidance beyond
the scope of this chapter. Here are some tips based on my experience.
The estimating process has to be defined in writing in advance of preparing the estimate.
The definition needs to include:
• Key project parameters and assumptions.
• Rules for how to allocate cost among different categories to ensure everything is
covered and nothing is duplicated. This is necessary even if there is a WBS, as
different people will interpret it differently.
• A sound method for identifying each “official” version of the estimate. It will
change and it’s easy to get confused as to what the current issued version is
versus the current working version.
• An airtight method of documenting the data and assumptions that serves as a
backup for each element of the estimate. The sound logic used during
development will quickly be forgotten. A year later someone will ask about a
number and nobody will know.
The estimating process for the next project must be considered in the collection of actual
data from the current project. This is particularly true if any kind of rate-based estimate is
used. As silly as it sounds, people discover that during a project they did not collect the
data necessary to develop or update rates. This discovery is usually made during the
estimating process for the next project when it is too late.

An excellent source of very practical advice on the estimating process is the NASA Cost
Estimating Handbook, available on the web at: http://ceh.nasa.gov/
PROJECT MANAGEMENT IN PRACTICE
Pathfinder Mission to Mars—on a Shoestring
Question 1: How did a change in philosophy make such a drastic difference in
project cost?
In 1976, cost was not a constraint, performance was. In the subsequent project,
performance was subordinated to the project’s cost goals.
Question 2: Why was the mission scope so limited? Why even spend the money
to go to Mars with such limited objectives?
Due to economic considerations and political realities, the mission was expected to hold
costs down to a minimum level while still achieving a level of performance that would be
a public relations success with at least some science accomplished. This project serves
as an example of why projects sometimes are selected for nonfinancial reasons. A low-
cost project was viewed as having the potential to demonstrate to the political
stakeholders that NASA could launch cost-effective space missions.
Question 3: Describe their “de-scope,” “lien list,” and “cash reserve” approaches.
1) De-scope: Performance objectives were ranked and could be cut from the
bottom, if necessary, to meet the cost objectives set for the project.
2) Lien list: This was a list of potential changes to the project that were anticipated
or discovered along the way. By recognizing these as potentially costly changes,
and managing the list, cost growth could be controlled.
3) Cash reserve: Costs would be squeezed at the start of the project. The intention
was to release funds, only if they could not be squeezed out of the project.
Question 4: Recent design-to-cost interplanetary projects have also had some
spectacular failures. Is this the natural result of this new philosophy?
NASA has done considerable soul searching on this subject after the loss of the Mars
Climate Orbiter. The excellent white paper (available at
ftp://ftp.hq.nasa.gov/pub/pao/reports/1999/MCO_report.pdf) concluded that the drive to
reduce cost was definitely a contributing factor in the incident. The danger is (and was)
that scope vital to the success of the mission could be ignored in the name of cost
cutting. This is not the result of underhanded scheming, but a natural consequence of
overworked people believing that, what they can’t get to will probably come out okay just
the same.
Convention Security: Project Success through Budget Recovery
Question 1: How is a project for an event like a multi-day convention different
from a project like building a house?
Managing a convention is different from managing the construction of a house, since
there are fewer chances of changes in the architecture of a house than in the

requirements of a convention. Managing a convention usually requires ad-hoc changes
in the plans, since there is no primary decision maker and there had to be compromises
and disagreements. This is unlike building a house which is much simpler to manage in
comparison to a multi-day convention.
Question 2: Does 72 different risk factors seem like a lot to plan for? How
important was CSP’s contingency planning for this project?
Planning for 72 different risk factors is indeed a humungous task. It usually happens that
managing one risk factor changes the risk level of some other factor. Managing so many
factors to an acceptable level at the same time requires a lot of careful attention,
exercise, and experience. CSP’s contingency planning was very important in this case
since it was not the primary decision maker. The team knew in advance that they will
have to work with other agencies and they planned accordingly to take care of any
changes. If they wouldn’t have planned for this, the convention was surely at risk.
Question 3: How does not being in control of decisions and plans affect the
project manager?
It is very difficult for a manager to not be in control of decisions and plans, since that is
what the task of manager is. He is used to taking actions and decisions based on his
experience, but certain situations demand more control of oneself than that of the
situation. When there are multiple parties and stakeholders, one person is not
responsible for everything and the manager is aware of this. He carefully makes his
plans and modifies his activities to be able to meld his decisions with others, if the need
arrives. A project manager not only manages a project but also manages a team and
knows what decisions are to be taken in different circumstances.
Question 4: Does being off by 150% in the estimate for human resources required
for a project surprise you? What do you think happened? How do you think they
managed to accommodate this change without exceeding the budget?
It is definitely surprising to being off by 150% in the estimate. I believe that CSP under-
estimated the number of troopers that were required or was not aware of the level of
security required. However, they did think of multiple plans with alternate contingencies
to account for different types of changes in their plan of action. When the need arrived,
they were able to make these changes by careful use of project management tools and
practices to avoid any budget increases. Indeed, one of the major reasons for not
exceeding the project budget was the development of multiple plans with alternate
arrangements for different situations.
Managing Costs at Massachusetts’ Neighborhood Health Plan
Question 1: Wouldn’t higher eligibility requirements for subscribers cut NHP’s
health care costs? Why did this exacerbate NHP’s situation?
Reducing the patient load did not reduce the providers’ fixed cost for insurance and
facilities. Therefore, fewer patients had to absorb the same costs, but the revenues were
reduced. Profit therefore is dependent on changes in volume of demand. This made it
difficult for them as volume decreased.
Question 2: Explain the trade-off between hospital utilization and contract rates.

This scenario can be a complex one to evaluate financially. Visualize a scenario where a
patient’s stay generates sufficient revenue to cover the variable costs associated with
the stay. Once variable costs have been met, the remaining revenue can be used to
offset fixed costs. Once the level of utilization has covered the fixed costs, the hospital
begins to make a profit. However, suppose that the patient does not pay enough
revenue to cover the variable costs associated with the treatment received, any level of
hospital utilization will create a loss of profit.
Question 3: How did changing from a line item pay plan to an episode plan allow
comparisons and save costs?
The pay-per-episode plan establishes a standard cost that can be easily audited. In a
pay-by-line-item plan, it is much more difficult to detect and disallow inappropriate
additions to the bill being issued by the hospital. The hospital has an incentive to add
line items to help offset its fixed expenditures, so that it can recognize an operating
profit.
Habitat for Humanity Wins a Big One
Question 1: Did LHH seem to have a “de-scope” plan?
LHH did not seem to have a plan to de-scope, or reduce the scope of the plan. They
seemed to only consider that they would get all of the money from the LCHTC that was
proposed or nothing at all.
Question 2: Did LHH seem to understand the County Committee’s budget
allocation process?
It seems apparent that LHH did not understand the time issue with the County
Committee’s budget allocation process. LHH appeared to do everything else correctly,
but as shown by their strategy to contact the committee members individually when they
didn’t hear a response soon, they may not have understood how long budget allocations
take.
Question 3: How did the concept of partnering (Chapter 4) apply in this example?
Why do you think the Committee was insensitive to this opportunity?
LHH should have considered partnering with the County, which would have provided the
County with more incentive to approve the request.
The Emanon Aircraft Corporation
Question 1: How did inflating the material costs solve purchasing’s “lateness”
problem?
By inflating the estimated cost of the materials, the purchasing official may be ordering
extra material in the inventory to avoid any scarcity. This didn’t actually solve the
purchasing lateness problem, but increased the working capital requirements and the
financing costs associated with sustaining the extra capital as raw materials inventory.
The working capital appears to be chargeable to the project as an indirect cost (bulk
purchase allocated over the period’s units of output). In reality, the project is only seeing
a portion of the net impact to net free cashflow.
Question 2: What alternatives were available to Emanon besides demoting the
purchasing manager?

Rather than demoting the manager, Emanon could have issued warnings to the
purchasing official to avoid such issues in the future. Also, they could have penalized the
official monetarily in proportion to the penalty paid by the corporation. Another option
could have been to affect his yearly appraisal.
Question 3: What should Emanon do now?
Emanon now knows that the reason behind losing the competition was the increased
expected material costs. It should now work with its purchasing department to bring the
cost down to what is required and ensure that multiple checks are performed at different
levels of the purchasing department, so that the costs estimated are as close to actual
costs as possible with a minimal overhead for unexpected circumstances.
Simulating the Failure of California’s Levees
Question 1: What would be involved in changing the simulation threat from
hurricanes to earthquakes?
In order to change the simulation threat from hurricanes to earthquakes, the simulation
model would have to be modified by the scientists to account for the movement of the
ground in addition to the influx of water. The base model from New Orleans would be a
good start for the simulation, but additional parameters would need to be included.
Question 2: What process do you think would be used to analyze the simulation
results?
Hopefully the engineers could take historical data to run through the simulation to see
how accurately the simulation output matched historical results. Students may come up
with a variety of answers.
MATERIAL REVIEW QUESTIONS
Question 1: What are the advantages of top-down budgeting? Of bottom-up
budgeting? What is the most important task for top management to do in bottom-
up budgeting?
Refer to Section 7.1 in the text.
1) Advantages of top-down budgeting include:
a) Management can develop aggregated budgets that are reasonably accurate if
they are based on comparable projects.
b) It is not necessary to know about each task in order to develop a top-down
estimate.
2) Advantages of bottom-up budgeting include:
a) Individuals closer to the work are apt to have a more accurate idea of resource
requirements than their superiors or others not personally involved.
b) The resource requirements needed to complete tasks within work packages will
be more accurate than when other budgeting techniques are used.
c) Active participation of the stakeholders will tend to increase the acceptance and
support for the budget. The act of participating in bottom-up budget preparation

can help increase the emotional investment of stakeholders for adhering to the
cost baseline.
d) Bottom-up budgeting can help train managers to understand important
dimensions of project success. For example, junior managers will learn more
about how resource consumption will affect profitability and future cash flows.
3) Senior management should check to ensure that all major cost elements have been
included in the bottom-up budget.
Question 2: In preparing a budget, what indirect costs should be considered?
Refer to Section 7.2 in the text. An indirect cost is a cost that cannot be directly traced
back to the production of an output. For accounting purposes, two rules of thumb are
often used when classifying a cost as direct or indirect. In order to fall into the direct cost
category, the cost must be physically observable (it can be seen and measured when an
output is made) and it must be economically feasible to track the cost during production
of each output. If this is not true, then the cost will usually be captured in bulk as an
indirect cost and allocated back to the units of output that were created during a fixed
period of time (accounting period, for example). Examples of indirect costs that a project
manager should consider include:
1) Sales, general, and administrative expenses (SG&A)
2) Contract penalties
3) Contingency allowances
4) Waste and reduction to fair market value (defects, spoilage, and obsolescence)
5) Turnover costs (replacement and training of personnel)
Question 3: Describe the purpose and use of a tracking signal.
Refer to Section 7.2 in the text. The tracking signal is used to measure an estimator’s
relative (to the MAD or MAR) bias. Bias is detected as patterns of variation that are not
random. The textbook provides two examples of a tracking signal (TS).
Question 4: Describe the top-down budgeting process.
Refer to Section 7.1 in the text. Initially, few details may exist regarding how the work
should be accomplished. In such cases, senior management sets a top-down budget by
comparing the new project with similar ones done in the past. Then the budgets can be
cascaded to and validated by the lower levels of management. During this process of
cascading, the decomposition of required outputs into families of related work packages
should help to confirm the feasibility of the initial estimate.
Question 5: What is a variance?
Refer to Section 7.2 in the text, Table 7-1, and the glossary. There are many potential
perspectives that can be used to explain the concept of variance. At the most basic
level, a variance is the difference between a planned value and an actual value.
Because variances measure the uncertainties that are present in a management system
such as a project plan, variances may be random or nonrandom. If the project manager
observes random variation, the variance may be acceptable. If the project manager

observes nonrandom variation, it should be treated as an exception and investigated to
see if corrective action is required to restore stability to the performance levels observed
while executing the project plan.
Question 6: Describe the learning curve phenomenon.
Refer to Section 7.2 in the text. There is a cliché that “practice makes perfect.” In the
basic learning curve, each time the number of repetitions for a task is doubled, a
predictable percentage of improvement in productivity will be observed. If 100 hours
were required to complete task “A” on the first cycle, a 90% learning curve would mean
that only 90 hours would be necessary on the second cycle. On the fourth cycle, only 81
hours would be needed to complete that repetition of task “A.”
Question 7: How might you determine if cost estimates are biased?
Refer to Section 7.2 in the text. With respect to a cost estimate, it is not desirable to
either over or underestimate costs. When a distribution of estimates is unbiased, the
over estimates and the underestimates will tend to cancel each other out, resulting in
little bias. The text provides a very good explanation of mean absolute ratio (MAR) and
mean absolute deviation (MAD). A tracking signal (TS) is used to detect if estimates are
biased, and how much relative are the estimates to the natural variation (or error), that
is, the MAD.
Question 8: What is “program budgeting”?
Refer to Section 7.1 in the text. Program budgeting describes the process of developing
and maintaining budgets that are broken down by actual task in a specific project. A
variant is to show budgets for a series of projects that are related to a specific program.
Question 9: What is the difference between project and category oriented
budgets?
This question is meant to make the students understand the distinction between
“categories” and “activities.” Categories are generic groups of activities such as
“transporting materials,” while activities are specific tasks in a project/program such as
“move steel rods from location A to location B on Sept. 3.”
Refer to Section 7.1 in the text. In category-oriented budgets, expenses are categorized
into cost sub-accounts such as supplies, labor, electricity, gas, and telephone, and
grouped for the organizational level being reported, even sometimes a specific project.
In project-oriented budgets, expenses are categorized into the project tasks that
consume various types of resources.
Question 10: How does a risk analysis operate? How does a manager interpret the
results?
To perform risk analysis, a manager makes certain assumptions about the parameters
and variables associated with a project decision. This is then checked with the risk
profile or the uncertainty that is present with these variables. This helps in the estimation
of risk profiles or probability distributions of the outcomes of the decisions. Generally a

project involves multiple parameters and variables and thus simulation is preferred over
tedious analytical methods. This simulation/analytical process reveals the distribution of
various outcomes and this risk profile is used to assess the value of the decision along
with various other factors.
CLASS DISCUSSION QUESTIONS
Question 11: Discuss ways in which to keep budget planning from becoming a
game.
Refer to Section 7.1 in the text. This is a tough issue which should be able to generate
an interesting class discussion. The process is a “game” when the participants perceive
it as a zero sum game with management decisions made in an arbitrary and capricious
manner. Management can try a few things to defuse the situation such as:
1) Use open and honest discussions about resource allocation decisions that are
based upon principles of shared interest and collegial management.
2) Refrain from mandating across-the-board budget cuts when faced with cost
containment problems.
3) Use the four dimensions of project success to foster rational and consistent
resource allocation decisions in a manner that links project management
strategies to overall business success.
Question 12: List some of the pitfalls in cost estimating. What steps can a
manager take to correct cost overruns?
Refer to Sections 7.1 and 7.2 in the text.
1) Uncertainty: By nature projects are unique; therefore, any estimate made beforehand
about project outcomes is uncertain. Estimates are just that; they are always wrong.
2) Assumptions: An assumption is the answer to a question that is otherwise unknown
or too expensive to get a timely answer. There is nothing wrong with assumptions;
they are a part of the game in creating estimates in the face of uncertainty. One
danger with assumptions is that they present an opportunity for biases to be
embedded in the project. One particularly dangerous assumption is that the data
from past projects can be blindly applied to the estimates for new projects. If the new
project is different enough in process or product, old data can only be used with a
grain of salt. It’s important to keep in mind that using old data uncritically can make
the estimate too high as well as too low.
3) Learning Curves: Experience can influence productivity. The estimator may need to
consider the effects of experience using techniques such as the learning curve.
4) Bad Data: Data about past performance may have been captured incorrectly and/or
reported inaccurately. The estimator should validate the accuracy of historical data
with respect to representing what the data should represent.
5) Missing Scope: The most accurate estimate will be fatally flawed, if it does not
account for all the work the project has to do. This could be due to a poor estimating
process or uncertainty about the actual work scope.

Before managers can correct cost overruns, they must detect them. This means that
there has to be a detailed plan that is measured on a regular basis. When overruns are
detected, the manager needs to evaluate the root cause with the help of the team.
Corrective action may include reducing staff, reducing scope, or increasing the budget.
Question 13: Why do consulting firms frequently subsidize some projects? Is this
ethical?
Refer to Section 7.2 in the text. It’s ethical for companies to take a deliberate loss on a
project for several reasons:
• The company is investing in a new business area.
• The company is sharing costs with a partner in support of a future big win-win
situation. For example this might be undercharging on a project supporting
another company’s proposal preparation.
• The project represents a charitable donation.
• The company would otherwise have no work at all, but wishes to retain its staff.
It is unethical for a company to knowingly underbid a contract with the intent of making
the money back through later changes. The U.S Government has named this practice as
“defective pricing” and goes to great length to prevent it and punish the perpetrators.
Question 14: What steps can be taken to make controlling costs easier? Can these
steps also be used to control other project parameters, such as scope?
In order to control costs, it is essential to have a project plan that is organized according
to the way the project actually will be managed. To develop such a plan, use the WBS to
decompose project deliverables from the scope statement into sets of deliverable-
oriented work packages linked to cost centers in the project’s budget. By linking the
control mechanisms to the work packages, the manager will have a much better chance
of detecting overruns when something can still be done about them. This is also true for
other parameters such as schedule and progress (performance). As painful as it sounds,
it is better to measure cost, schedule, and progress more frequently than less. The
longer it takes to detect a variance, the bigger it will be and the harder to correct.
Question 15: Which budgeting method is likely to be used with which type of
organizational structure?
Refer to Section 7.1 in the text. Functional organizations will tend to prefer activity-
oriented budgets. Project based organizations would prefer to have program-oriented
budgets. In these two forms, the vertical hierarchy is the driving factor behind budgeting
tendencies. However, the matrix form may exhibit tendencies toward using both types of
budgets. The weak matrix form would be expected to exhibit functional preferences,
while the strong matrix (project matrix) would tend to exhibit project preferences more
predominately.
Question 16: What are some potential problems with the top-down and bottom-up
budgeting processes? What are some ways of dealing with these potential
problems?

Refer to Section 7.1 in the text.
1) Top-Down Budget Problems: Top-down budgets are often developed from
analogies, parametric models, and/or business intuition. Budgets based on
analogies are only useful, if the new project is similar enough to the old ones. If
parametric models are used, the estimator may neglect to include important cost
elements and/or the parameters in the model may not reflect the current process.
If the model is derived from business intuition, the estimates will tend to be overly
optimistic. In all cases, the use of bottom-up estimating techniques to confirm the
top-down estimate is recommended.
2) Bottom-up Budget Problems: Bottom-up budgets should be developed using the
WBS to organize estimates by cost center. However, the WBS format may make
it difficult to capture indirect costs in a manner that will be credible to members of
the various functions actually doing the work. Moreover, the bottom-up estimate
is even more likely than a top-down estimate to leave out some important cost
elements. This could be because the estimating process is poorly organized or
because the project is different enough that the scope is “unknown” to the
estimators. Bottom-up budgets should be compared with top-down budgets as a
sanity check.
Question 17: How is the budget planning process like a game?
There are natural differences between management and workers. Managers are often
measured by cost performance, which may be tied to bonuses. Workers on the other
hand do not like their performance to be monitored, particularly in a direct and frequent
manner. When asked how long it will take to do something, they will typically give a
“comfortable” answer, especially if they are experienced. Workers who have been
around the track a few times become firm believers in Murphy’s Law and give estimates
based on the worst case. One other factor that I have observed is technical folk’s
reluctance to accept the realities of the capitalist system. They will insist till the cows
come home that a project will take so many hours, regardless of whether anybody can
afford the deliverable at the resulting price. The game part comes in when the two
parties begin to anticipate each other’s actions. The workers inflate their estimates in
anticipation of management cutting them. Managers cut the estimates because they
know that (surprise!) they have been inflated, and the vicious circle starts.
Question 18: Would any of the conflict resolution methods described in the
previous chapter be useful in the budget planning process? Which?
Refer to the answer of Question 16 in this book and to Chapter 6 in the textbook. The
technique used during conflict resolution (budget planning process) will be contingent
upon the situation. Confrontation (interdisciplinary problem-solving) would be the
preferred approach for this author. However, compromises may be appropriate in
scenarios where both parties have equal power and an acceptable outcome can be
attained. The other conflict resolution strategies should see infrequent use during
budgeting processes. For example:

1) Avoidance: The project is an operating necessity and the process being fixed
produces benefits that far exceed the execution costs of the project. Failure is not
an option. Consider the project initiated when the Apollo 13 astronauts had to
abort the planned lunar landing and return to Earth.
2) Withdrawal: The budget issue is unimportant to one of the stakeholders. For
example, a contractor, as a conscious strategy to invest in maintaining a client
relationship, may absorb a minor scope change. Such decisions would be based
on the total lifecycle value of the relationship rather than the costs associated
with a single scope change transaction.
3) Forcing: In cases where cost constraints (market pressures) could jeopardize
business survival, unless preferred approaches of the performing organization
are modified, forcing budgets on a single project may be an appropriate albeit
risky response necessary to get the job done.
Question 19: How does the fact that capital costs vary with different factors
complicate the budgeting process?
Refer to Section 7.1 in the text. Cash flows for capital costs are managed differently than
the cash flows for operating costs. Each industry may use different assumptions and
procedures as to how capital costs should be treated in budgets. Moreover, since capital
costs are associated with future business capacity, they have a greater degree of
uncertainty than the operating expenses consumed in a single business period. To end
this discussion, since capital costs are accumulated in bulk, the allocation of their usage
to activities in a budget may be significantly influenced by external variables such as
changes in market supply and demand.
Question 20: Why is learning curve analysis important to project management?
Refer to Section 7.2 in the text. For projects of a similar nature, repetition should improve
productivity. It’s important for the estimators to understand and carefully apply
assumptions about the learning curve. For example, if the learning factor embedded in
historic data is ignored, a project could be underestimated, because it will start out with
no learning at all.
Question 21: Why is it “ethically necessary to be honest” in negotiations between
a superior and subordinate?
Depending on the situation, bosses may not even need to negotiate. There are times
when it is appropriate for a boss to direct (think of the captain of a warship during battle),
but they aren’t that frequent in most project management situations. In most cases, there
is some level of negotiation that takes place. If the boss wants the enlightened support of
his/her subordinates, then she needs to be honest in her dealings with them. If not,
upset subordinates can “sandbag” the project making it look like they are doing the work
when in fact, they are not. In all but the smallest project, it will be impossible for the boss
to make up personally the lost work when it is discovered. Bosses do have power, but
they need to use it ethically for the long-term good of the organization.

It is also ethically necessary for subordinates to be honest as well. They should be
truthful in their communication with the supervisor. For instance, they should let the
supervisors know when they may need time away from work, what type of work they
prefer, etc. By communicating these types of things, it is more likely the subordinate will
be happy and the project completed is closer to on time.
Question 22: The chapter describes the problems of budgeting for S-shaped and
J-shaped life-cycle projects. What might be the budgeting characteristics of a
project with a straight line life cycle?
The chapter emphasizes the danger of simple across the board budget cuts for projects
with exponential or right half of a U-shaped life cycle. If the budget is cut by 10%, a
major portion of the benefit is lost. For these life cycle curves, however, further cuts have
less impact than the first. With an S-shaped curve the loss of benefit increases with each
cut. For a linear curve, a 10% cut in budget would cause a 10% loss in benefit, and each
subsequent cut would have proportionately the same amount of benefit loss.
Question 23: Interpret the columns of data in Figure 7-11. Does the $14,744 value
mean that the project is expected to return only this amount of discounted
money?
The columns in Figure 7-11 summarizes the results of the simulation data based on
these trial runs performed. The $14,744 value doesn’t indicate the exact value of the
project. Rather, it indicates the mean value based on the simulations runs in this
analysis.
Question 24: How would you find the probability in Figure 7-10 of an NPV of over
$25,000?
To find the probability of an NPV greater than $25,000 (in Figure 7-10), you would enter
“25,000” in the box in the lower left corner of the screen. The probability would then be
displayed in the “Certainty” box situated in the middle of the screen.
Question 25: Does the spread of the data in Table 7-4 appear realistic? Reconsider
Table 7-4 to explain why the simulated outcome in Figure 7-11 is so much less
than the value originally obtained in Table 7-3.
The spread of data in Table 7-4 is realistic given the nature of the PERT estimates
(pessimistic, most likely, and optimistic). This method provides a range of likelihoods
based on different scenarios. The simulated outcome in Figure 7-11 is lesser than the
value originally obtained in Table 7-3 because of the inclusion of the lower “minimum
inflow” column in Table 7-4. This reduces the overall values because it decreases the
estimates.

PROBLEMS
Problem 1: Using the cost estimation template and Actuals in Figure 7-5, compare
the model in the figure with the following estimates derived from a multiplicative
model. Base your comparison on the mean bias, the MAR, and the tracking signal.
Comment.
Period: 1 2 3 4 5 6 7 8
Estimated:179 217 91 51 76 438 64 170
Tracking
Period Estimate Actual (A(t)/F(t))-1|(A(t)/F(t))-1| MAR Signal
1 179 163 -0.08939 0.08939
2 217 240 0.105991 0.105991 0.10 0.17
3 91 67 -0.26374 0.26374 0.15 -1.61
4 51 78 0.529412 0.529412 0.25 1.14
5 76 71 -0.06579 0.06579 0.21 1.03
6 438 423 -0.03425 0.03425 0.18 1.00
7 64 49 -0.23438 0.23438 0.19 -0.28
8 170 157 -0.07647 0.07647 0.17 -0.74
Total -0.129
Again, the bias has reduced considerably and changed sign but the MAR is somewhat
greater. Hence, the Tracking Signal is substantially smaller and shows an acceptable
level of bias on the part of this estimator.
Problem 2: Conduct a discounted cash flow calculation to determine the NPV of
the following project, assuming a required rate of return of 0.2. The project will
cost $75,000 but will result in cash inflows of $20,000, $25,000, $30,000, and
$50,000 in each of the next four years.
Year Cash Flow PVIF PV$
0 $(75,000) 1 $(75,000)
1 $20,000 1.200 $16,667
2 $25,000 1.44 $17,361
3 $30,000 1.728 $17,361
4 $50,000 2.0736 $24,113
Rate 20% NPV $502
Problem 3: In Problem 2, assume that the inflows are uncertain but normally
distributed with standard deviations of $1000, $1500, $2000, and $3500,
respectively. Find the mean forecast NPV using Crystal Ball®. What is the
probability the actual NPV will be positive?
To convert this spreadsheet to a Monte Carlo simulation, Crystal Ball®
will be assigned
to generate cash flow values following a normal distribution.

The setup for the inflow during year one looks like this:
In a similar manner, normal distributions with the given standard deviations are setup for
the inflows in years one through four. The NPV is assigned as the forecast value. Then
after trials are run, a typical result looks like this:
For this distribution, the mean value is about $549 dollars and the chance that the NPV
is positive is determined by sliding the left hand slider until it is over zero ($0.00): The
resulting display from Crystal Ball®
looks like this:

The histogram generated by this trial did not have any values at zero, so the lowest
positive value of $4.00 is chosen. The area between this point and infinity gives the
probability of the NPV being positive, 58.6%.
Problem 4: A production lot of 25 units required 103.6 hours of effort. Accounting
records show that the first unit took 7 hours. What was the learning rate?
The learning rate can only be determined in reality by trial and error.
For this problem a simple spreadsheet will be used. The learning curve factor reduces
the time spent producing the lots, from the base time of 7 hours. We also know that the
total production hours for 25 units are 103.6 hours. A spreadsheet calculating the cycle
time for each lot based on a learning curve would look like this:
Unit
Base
Time Multiplier
Adjusted
Time
Trial
Rate
1 7 1.00 7.00 0.90
2 7 0.90 6.30
3 7 0.85 5.92
4 7 0.81 5.67
5 7 0.78 5.48
6 7 0.76 5.33
7 7 0.74 5.21
8 7 0.73 5.10
9 7 0.72 5.01
10 7 0.70 4.93
11 7 0.69 4.86
12 7 0.69 4.80
13 7 0.68 4.74
14 7 0.67 4.69
15 7 0.66 4.64
16 7 0.66 4.59
17 7 0.65 4.55
18 7 0.64 4.51

19 7 0.64 4.47
20 7 0.63 4.44
21 7 0.63 4.41
22 7 0.63 4.38
23 7 0.62 4.35
24 7 0.62 4.32
25 7 0.61 4.29
Total 124.0
Note that for this example, the multiplier for year two is calculated as:
2 (log(0.90)/log(2))
or 2 (-0.045/0.301)
or 2 (-0.149)
= 0.9
Each multiplier is calculated in turn based on the unit number it represents. In each case
the multiplier is used to modify the base cycle time of 7 hours and then totaled at the
bottom.
The total in this example does not equal 103.6 hours because the learning rate is
incorrect. One could insert different values and find the correct value by trial and error, or
use the Solver feature of Microsoft®
Excel. To use Solver, the total hours are set as the
“Target Cell” and the “Trial Rate” is designated as the cell to be changed subject to the
limitation that it may not exceed 1.0 using this technique, the spreadsheet with the
correct learning rate would be:
Unit
Base
Time Multiplier
Adjusted
Time
Trial
Rate
1 7 1.00 7.00 0.85
2 7 0.85 5.95
3 7 0.77 5.41
4 7 0.72 5.06
5 7 0.69 4.80
6 7 0.66 4.60
7 7 0.63 4.44
8 7 0.61 4.30
9 7 0.60 4.18
10 7 0.58 4.08
11 7 0.57 3.99
12 7 0.56 3.91
13 7 0.55 3.84
14 7 0.54 3.77
15 7 0.53 3.71
16 7 0.52 3.65
17 7 0.51 3.60
18 7 0.51 3.55
19 7 0.50 3.51

20 7 0.50 3.47
21 7 0.49 3.43
22 7 0.48 3.39
23 7 0.48 3.36
24 7 0.47 3.32
25 7 0.47 3.29
Total 103.6
Problem 5: If unit 1 requires 200 hours to produce and the labor records for an Air
Force contract of 50 units indicates an average labor content of 63.1 hours per
unit, what was the learning rate? What total additional number of labor-hours
would be required for a follow-on Air Force contract of 50 units? What would be
the average labor content of this second contract? Of both contracts combined? If
labor costs the vendor $10/hour on this second contract and the price to the Air
Force is fixed at $550 each, what can you say about the profitability of the first and
second contracts, and hence the bidding process in general?
A spreadsheet similar to the one used in problem 5 can be used for this problem as well.
Here the total hours for the first 50 units can be calculated based on the given average,
specifically 50  63.1 = 3,155 hrs. The spreadsheet with the correct learning rate would
look like this:
Unit
Base
Time Multiplier
Adjusted
Time Unit
Base
TimeMultiplier
Adjusted
Time
Trial
Rate
1 200 1.00 200.00 26 200 0.26 51.73 0.75
2 200 0.75 150.00 27 200 0.25 50.92
3 200 0.63 126.76 28 200 0.25 50.16
4 200 0.56 112.50 29 200 0.25 49.44
5 200 0.51 102.54 30 200 0.24 48.74
6 200 0.48 95.07 31 200 0.24 48.09
7 200 0.45 89.18 32 200 0.24 47.46
8 200 0.42 84.37 33 200 0.23 46.85
9 200 0.40 80.34 34 200 0.23 46.28
10 200 0.38 76.91 35 200 0.23 45.72
11 200 0.37 73.92 36 200 0.23 45.19
12 200 0.36 71.30 37 200 0.22 44.68
13 200 0.34 68.97 38 200 0.22 44.19
14 200 0.33 66.88 39 200 0.22 43.72
15 200 0.32 64.99 40 200 0.22 43.26
16 200 0.32 63.28 41 200 0.21 42.82
17 200 0.31 61.70 42 200 0.21 42.39
18 200 0.30 60.26 43 200 0.21 41.98
19 200 0.29 58.92 44 200 0.21 41.58
20 200 0.29 57.68 45 200 0.21 41.19
21 200 0.28 56.52 46 200 0.20 40.82

22 200 0.28 55.44 47 200 0.20 40.46
23 200 0.27 54.43 48 200 0.20 40.11
24 200 0.27 53.48 49 200 0.20 39.76
25 200 0.26 52.58 50 200 0.20 39.43
Sub-Total 2038.0 Total 3155.0
To answer the second part of the question, the spreadsheet is extended to 100 units.
The portion of the spreadsheet for units 51-100 is shown here:
Unit
Base
Time Multiplier
Adjusted
Time Unit
Base
Time Multiplier
Adjusted
Time
Trial
Rate
51 200 0.20 39.11 76 200 0.17 33.15 0.75
52 200 0.19 38.80 77 200 0.16 32.97
53 200 0.19 38.49 78 200 0.16 32.79
54 200 0.19 38.20 79 200 0.16 32.62
55 200 0.19 37.91 80 200 0.16 32.45
56 200 0.19 37.62 81 200 0.16 32.28
57 200 0.19 37.35 82 200 0.16 32.12
58 200 0.19 37.08 83 200 0.16 31.96
59 200 0.18 36.82 84 200 0.16 31.80
60 200 0.18 36.56 85 200 0.16 31.64
61 200 0.18 36.31 86 200 0.16 31.49
62 200 0.18 36.07 87 200 0.16 31.34
63 200 0.18 35.83 88 200 0.16 31.19
64 200 0.18 35.60 89 200 0.16 31.04
65 200 0.18 35.37 90 200 0.15 30.90
66 200 0.18 35.14 91 200 0.15 30.76
67 200 0.17 34.93 92 200 0.15 30.62
68 200 0.17 34.71 93 200 0.15 30.48
69 200 0.17 34.50 94 200 0.15 30.35
70 200 0.17 34.30 95 200 0.15 30.21
71 200 0.17 34.09 96 200 0.15 30.08
72 200 0.17 33.90 97 200 0.15 29.95
73 200 0.17 33.70 98 200 0.15 29.83
74 200 0.17 33.51 99 200 0.15 29.70
75 200 0.17 33.33 100 200 0.15 29.58
Sub-Total 4054.4 Total 4835.7
Note that both the sub-total and the total include the hours for the first 50 units.
Therefore, the hours to produce the second fifty units are 4,835.7 – 3,155 = 1,680 hrs.
The average labor content would be 1680hrs/50units = 33.6 hrs/unit. The combined
average is found by 4835.7hrs/100 units = 48.4 hrs/unit. If labor were $10/hr then the
first 50 cost, $10  63.1 = $631 each, so the firm lost money. However, the second 50
cost $336 each, so the firm made a profit of $550 – $336 = $214 each. Overall the total
labor cost would be 4835.7 hrs  $10/hr or $48,357 and the revenue would be $550/unit

 100 units or $55,000. Assuming no other costs, this would give a net profit of $55,000
– $48,357 = $6643. This suggests that the company underbid the first contract with the
expectation of winning a more profitable follow-on contract. [In practice, contractors
developing the price for repetitive products, even with a short a run as two ships, use a
learning curve when bidding on government contracts.] This manufacturer takes on
considerable risk since the contract may be cancelled in the middle or no follow on
contract may ever be offered.
Problem 6: Your firm designs PowerPoint slides for computer training classes,
and you have just received a request to bid on a contract to produce the slides for
an eight-session class. From previous experience, you know that your firm
follows an 85 percent learning rate. For this contract it appears the effort will be
substantial, running 50 hours for the first session. Your firm bills at the rate of
$100/hour and the overhead is expected to run a fixed $600 per session. The
customer will pay you a flat fixed rate per session. If your nominal profit margin is
20 percent, what will be the total bid price, the per session price, and at what
session will you break even?
The total bid price will be $41,351.87 and the breakeven point will be in the 7th
session.
Problem 7: A light manufacturing firm has set up a project for developing a new
machine for one of its production lines. The most likely estimated cost of the
project itself is $1,000,000, but the most optimistic estimate is $900,000 while the
pessimists predict a project cost of $1,200,000. The real problem is that even if the
project costs are within those limits, if the project itself plus its implementation
costs exceed $1,425,000, the project will not meet the firm’s NPV hurdle. There are
four cost categories involved in adding the prospective new machine to the
production line: (1) engineering labor cost, (2) nonengineering labor cost, (3)
assorted material cost, and (4) production line downtime cost.
The engineering labor requirement has been estimated to be 600 hours, plus or
minus 15 percent at a cost of $80 per hour. The nonengineering labor requirement
is estimated to be 1500 hours, but could be as low as 1200 hours or as high as
2200 hours at a cost of $35 per hour. Assorted material may run as high as
$155,000 or as low as $100,000, but is most likely to be about $135,000. The best

guess of time lost on the production line is 110 hours, possibly as low as 105
hours and as high as 120 hours. The line contributes about $500 per hour to the
firm’s profit and overhead. What is the probability that the new machine project
will meet the firm’s NPV hurdle?
In the spreadsheet shown below the project cost, nonengineering labor hours, material
cost, and downtime hours were all modeled using a triangular distribution. The
engineering labor hours were modeled using a uniform distribution over the range of 510
to 690 hours. As shown in the spreadsheet below, the project has a 92.37% chance of
meeting the firm’s NPV hurdle.
Problem 8: A four-year financial project has estimates of net cash flows shown in
the following table. It will cost $65,000 to implement the project, all of which must
be invested at the beginning of the project. After the fourth year, the project will
have no residual value. Assume that the cash flow estimates for each year are
best represented by a triangular distribution and that the hurdle rate is 20 percent.
(a) Use Crystal Ball®
to find the expected NPV of the project.
(b) What is the probability that the project will yield a return greater than the 20
percent hurdle rate?
Year PessimisticMost Likely Optimistic
1 $14,000 $20,000 $22,000
2 19,000 25,000 30,000
3 27,000 30,000 36,000
4 32,000 35,000 39,000
Year Pessimistic
Most
Likely Optimistic Used PVIF PV$
0 $ (65,000) $ (65,000) $ (65,000) $(65,000) 1 $(65,000)
1 $ 14,000 $ 20,000 $ 22,000 $ 20,000 1.200 $ 16,667

2 $ 19,000 $ 25,000 $ 30,000 $ 25,000 1.44 $ 17,361
3 $ 27,000 $ 30,000 $ 36,000 $ 30,000 1.728 $ 17,361
4 $ 32,000 $ 35,000 $ 39,000 $ 35,000 2.0736 $ 16,879
Rate 20% NPV $ 3,268
Now the green (or shaded) cells in the column labeled “Used” (with the exception of the
initial investment of $65,000) are calculated by Crystal Ball® using a triangular
distribution with the end points selected based on the pessimistic and optimistic values
given. The setup for year one looks like this:
The net present value is then calculated for each of 1000 trials and results are displayed
by designating the NPV cell as a forecast. Typical results look like this:
By adjusting the triangular sliders it can be seen that the chance of the NPV exceeding
$0 (and the hurdle rate) is about 87%. The mean value for this distribution is $2770.
Problem 9: If an inflation rate of 2 percent, normally distributed with a standard
deviation of .333 percent, is assumed, what is the expected NPV of the project in
Problem 8, and what is the probability that it will qualify?

Year Pessimistic
Most
Likely Optimistic Inflation Used PVIF PV$
0 $ (65,000) $ (65,000) $ (65,000) - $(65,000) 1 $(65,000)
1 $ 14,000 $ 20,000 $ 22,000 2% $ 20,000 1.220 $ 16,393
2 $ 19,000 $ 25,000 $ 30,000 2% $ 25,000 1.4884 $ 16,797
3 $ 27,000 $ 30,000 $ 36,000 2% $ 30,000 1.8158 $ 16,521
4 $ 32,000 $ 35,000 $ 39,000 2% $ 35,000 2.2153 $ 15,799
Rate 20% NPV $ 510
Now the column labeled “Inflation” has been added. Each of these cells is individually
calculated by Crystal Ball® with a normal distribution using a standard deviation of
0.33% to allow different inflation values for each year. The result is added to the “PVIF”
calculation used to determine the individual PV results.
Now the forecast values for NPV look like this:
The probability that the NPV exceeds $0 is about 50%. The mean value for this
distribution is -$85. This analysis indicates that there is only a 50-50 chance that the
project will qualify (meet the hurdle rate).
Problem 10: A cloud storage startup has decided to upgrade its server computers.
It is also contemplating a shift from its Unix-based platform to a Windows-based
platform. Three major cost items will be affected whichever platform they choose:
hardware costs, software conversion costs, and employee training costs. The
firm’s technical group has studied the matter and has made the following
estimates for the cost changes in $000s.
Using Crystal Ball®
and assuming that the costs may all be represented by
BetaPERT distributions, simulate the problem 1000 times. Given the information
resulting from the simulation, discuss the decision problem.
Low Likeliest High Low Likeliest High
Hardware 100 125 200 80 110 210

Software 275 300 500 250 300 525
Training 9 10 15 8 10 17.5
Windows
Unix
INCIDENTS FOR DISCUSSION
Preferred Sensor Company
Questions: Under these circumstances, would Sean be wise to pursue a top-down
or a bottom-up budgeting approach? Why? What factors are most relevant here?

This incident is a good opportunity to let students reach a conclusion that two processes
are better than one. Ask a student who favors each position to state their reasoning. The
leading question is: “Which advantage of each process option applies to which part of
the estimate?” The students should reach the conclusion that a combination of both is
the best choice.
Both budgeting approaches may prove useful to Sean in this scenario. Initially, a top-
down estimate should be considered because 50% of the costs are stable and
predictable based upon prior history and business intuition. Since 50% of the costs are
predictable, the remaining 50% should be explained by the new work being done. Thus,
Sean should proceed to develop a bottom-up estimate for the new work to verify that the
planned approaches and assumptions are realistic.
General Ship Company
Question: How would you monitor the costs of this project?
This incident is an opportunity to foreshadow the key concepts of the Earned Value
method. In Earned Value the progress of the project must be estimated during execution
to compare to cost and schedule actuals. Without knowing progress, there is no way to
know if cost and schedule actuals represent too much or too little. The question to ask
the class would be: “Suppose half of the estimated scrap occurred in the first six months
of the project, is that over or under the estimate?” Similarly, the controller would work
with the project manager and estimators to come up with a time phased scrap and
wastage profile associated with expected progress on the project. Then as the project
unfolds she could discover if her fears were justified or not.
CASE: CONCRETE MASONRY CORPORATION
Question 1: Do you think dividing CMC’s business into two groups will solve their
problem? Why or why not?
Student answers will vary. One opinion could be that dividing CMC’s business into two
groups could help, but that is still dependent upon so many factors. With two groups,
each could focus on their separate tasks at hand and become much more effective with
those.
Question 2: Do you agree that marketing and selling CMC’s business services is a
continuing task that should be done in a functional group?
Student answers will vary
Question 3: Were there any signals that CMC’s market was in the process of
changing that management could have acted upon? If so, what were they?
There were some signals that the market was changing. These include the prestressed
concrete gaining wide industry acceptance and technical schools and societies
beginning to offer courses in the techniques for utilizing this process. With relative wide-
spread acceptance, they should have known that more companies would soon be in the
market.

Question 4: Did CMC use bottom-up or top-down cost estimating? Do you think
CMC developed project budgets for each of their projects?
The estimates were based on top-down costing. The estimator input the span and cubic
feet needed and the rest of the estimate was calculated by the computer system.
CMC did create budgets for each project.
Question 5: Would a risk analysis of the 2500-car parking garage example have
helped CMC win the bid? If so, which techniques would have been most useful? If
not, what was wrong with CMC’s perspective?
CMC could have performed a risk analysis which should have identified loss of corporate
information as a significant risk. If that would have happened, they might not have
shared so much information with the potential client who then used that information to go
to other providers. They should have kept most of the proprietary information to
themselves so that other companies couldn’t use it to bid against them.
Question 6: Describe how you think CMC’s computer system estimated projects’
costs.
Their computer system was probably based on historical data. After inputting the span
and cubic feet required, the bid was put together based on the ratio of those two inputs
to former project costs.
READING: THREE PERCEPTIONS OF PROJECT COST
Question 1: What is the major point of the article?
Project managers need to understand the different ways costs are measured at their
organization, so that they can take actions that will favorably influence the project’s
contribution to a company’s financial plan.
Question 2: How does the accountant view project costs?
The specific answer to this question will depend upon the type of accountant that you
are dealing with. Usually, an accountant concerned with project results will fall under the
category of managerial accountant. These accountants like to understand cashflows in
order to properly book expenses and recognize revenues to determine net profit from
operations. A subset of accountants will be concerned with “plant accounting”. The plant
accountants are responsible for tracking the location and expiration of assets as the
assets are used and consumed during business operations. The plant accountant may
be concerned about tax incentives for assets such as equipment and inventories. A
financial accountant would be more concerned with financial metrics used by investors
to evaluate business performance (the profitability measures of project performance).
Some accountants will be internal auditors. They will be concerned with ensuring that
corporate policies and generally accepted accounting practices are properly and
consistently applied when reporting business results.
Question 3: How does the controller view project costs?
In general, the controller is concerned with ensuring that adequate cashflow exists to
sustain ongoing business operations. The controller will be interested in the timing and
amount of cash inflows and outflows.

Question 4: How does the project manager view project costs?
Project managers generally view costs as they are accrued against WBS elements in the
unit of measure designated by management. For example, many defense contractors
using the Earned Value method require PM’s to manage project cost by man-hours. The
dollar denominated version of the plan may be completely invisible to the PM, since it
contains overhead rates and other financial data that the company considers sensitive.
Question 5: What other costs does the project manager need to be cognizant of?
What actions should the PM take concerning these other costs?
Cost of Goods Sold (COGS) will reflect many direct costs of producing deliverables in a
project. There are many methods used by accountants to determine the expense
categories attributed to COGS, so the project manager should seek accounting’s
assistance to establish COGS for a specific project. In addition to COGS, the project
manager should follow the basic structure of the income statement used to derive
NOPAT (Net Operating Profit after Taxes). This would include SG&A expenses, interest
expenses, and taxes.
The project manager should also recognize that NOPAT is not the same concept as
cashflow from operations. The project manager should generally seek to create wealth
by managing future cashflows of the project in a manner where the amount, timing, and
risks are adequate to create free cashflows that can be returned to investors.

Exploring the Variety of Random
Documents with Different Content

only dwelt in retrospect on the happy weeks they had spent
together. Many injunctions followed. They would be sure to write to
each other every day, and think of each other all the while.
I found it easier to catch his grave, reassuring replies. The tone of
his voice baffled me. Here was Frémont, the retiring little man, with
shy manners, who liked to keep in the background and always asked
advice, appearing in the rôle of comforter! His protecting fondness
enfolded his beloved.
I continued to lean out above them, my elbows on the stone
window-sill, my hands joined. My malevolence gradually subsided.
That this was merely the repetition of a scene which had been
enacted all through the ages, no longer seemed to me a sufficient
reason to smile at it. On the contrary, I was stirred by the thought of
the eternal chain of loves and partings.
Night had fallen. The trees in the orchard seemed so many
phantoms. Not a light to be seen. Some birds flew silently across the
night air. I could hardly distinguish the two lovers now, but it
seemed to me that their lips had sought and found each other. There
was silence for a short space. Then a sentence was breathed softly.
A voice trembled into tears. I gathered from certain allusions that
she was afraid, though she did not say so, that he might never see
their little child.
Sitting there motionless, I dedicated my pitying sympathy to them
and thought how few men there were among all the thousands I
had seen marching past this afternoon, who were not leaving some
woman at home, wife or lover, and some child of their flesh.... Poor
souls! How terrible their grief must be! I ought to have
congratulated myself on the fact that I was leaving nothing behind
me. Why did I now so poignantly regret my solitude; did I envy the
farewells uttered amid tears and the sealing of vows?
There was a noise behind me: Guillaumin. I left the window, an
instinctive delicacy of feeling prevented me from drawing his
attention to the presence of the couple in the garden.

We went down into the yard again. My companion was in
tremendous form. He held forth on a hundred and one subjects, and
I agreed with him absent-mindedly. My thoughts were wandering
capriciously. I thought of my brother Victor for whose safe return
someone was praying.... A strange insistent idea kept recurring to
my mind, of writing to the girl who had thought of me yesterday.
CHAPTER XVIII
A RETURN OF EGOISM
The last distribution of stores had just taken place—biscuits,
haversack rations, and iron rations. Cartridges too, fifteen packets a
head; a pretty tough load, in addition to everything else. A lot of
men were grousing about where they should put them.
The worst of it was that there was some surplus. The company
commander who was passing said:
"You're not going to leave those behind, mind!"
I took two extra packets, and Guillaumin four. He remarked:
"This is the most necessary part of your equipment, you chaps, don't
you make any mistake about that!"
He had few imitators. Playoust, who was prowling round, jeered.
"For the Bosches? But my dear fellow you won't see any for six
weeks!"
It was not at all encouraging. Lamalou happened to turn up, and as
an old stager, at once exclaimed:
"Shove one along, and let's 'ave a look!"
He had formerly been in one of the flying columns in Morocco where
the replenishment of ammunition was a difficulty. Guillaumin threw
him a packet.

"Catch!"
The other caught it in mid air, then another, and another, five, ten,
fifteen. That doubled his load and he went on shouting.
"Another! And another! Just to make 'em dance!"
His example was decisive. Five minutes later there was nothing left
of the heap.
"The creature knows how to make himself useful!" I thought. It was
a pity he drank so much! He had just got into new and serious
trouble. A scandal in a pub, as usual—the officer on rounds had
reported him—he had been imprisoned—and the company sergeant-
major was innocently congratulating himself upon having got rid of
him!
But the captain got him out, and made a point of having a heart-to-
heart talk with him. What could he have threatened him with? With
leaving him at the depôt I think. The other had to promise to be
good, he reappeared triumphant.
"A regular brick, the Captain."
Ravelli could not get over it.
At two o'clock I began to get ready; we were to start at four. I was
fully equipped; nothing was missing. My pockets were stuffed with
the endless little necessaries for which there was no room
elsewhere: tooth-brush, medicine-case, string, pocket-knife, lighter,
electric torch. Bouillon had conscientiously tidied me up and cleaned
my equipment. In consideration of what I owed him, I had tipped
him ten francs. He hesitated. It was a large sum! I insisted upon his
taking it. I did not like being indebted to people.
I was alone in our room. I had just slipped my swollen pack over my
shoulder. My water-bottle was lying on a shelf above me. I reached

out my hand to take it. Ugh! it slipped out of my hand, and fell on to
the tiles.
Damn—oh, damn. Supposing it leaked!
I ran to a tap and began to fill it.
Yes, there was no doubt about it. It was done for!
I was in despair. Nothing worse could have happened to me. I knew
the incomparable value of a few drops of moisture at critical
moments. When you are exhausted and choked by the sun and the
dust, there is nothing like a drop of water on a piece of sugar, or a
thimbleful of rum to revive you. And on a route march too you are
sustained by the mere thought that you are carrying with you this
source of refreshment. And I who had taken such care, and was so
pleased at having this clean well-corked water-bottle.... What
odiously bad luck! My whole campaign seemed to me to be poisoned
by it....
Bouillon arrived on the scene. Directly I had told him, distractedly, of
my misfortune.
"Good heavens!" he said, "that it should 'appen just now! It's far too
late to get it soldered!"
I sighed. He looked round the room.
"W'y not sneak one?"
As I shrugged my shoulders. He continued:
"I'll undertake the job if yer like?"
"But how?"
"Oh, I'll get one from someone or other."
"You mustn't touch Guillaumin's things, mind."
"No, 'e's in the section. Wot abaht this one?"
"De Valpic's?"
"All right! Wait a minute!"

"But I say, he...?"
I hesitated.
"He would notice it! The cases are marked, look...."
"Don't you go an' worry yerself abaht that now! You've only got to
change them! You go an' keep an eye on the door...."
I went and watched the corridor. I was consumed by a lively
remorse. But what did it matter! Each one must fend for himself! He
would have to get out of the difficulty as best he could. After all
there was nothing more usual in the regiment than these sly thefts.
Why, someone had relieved me of one of my brushes only the day
before yesterday! I blamed myself for my horrible selfishness, but I
had practised it for so long. The opportunity was too tempting!
Anything rather than to suffer, hour after hour, from thirst or the fear
of thirst! And did I not promise myself—hypocrite that I was—to
share my ration of water with the comrade I had despoiled?
In the twinkling of an eye Bouillon had dexterously drawn the two
bottles out of their cloth cases, and effected the exchange.
"Nobody will ever be any the wiser!"
De Valpic came in soon after and noticed nothing.
I can hear the whistle. Quick march! We shook ourselves.... That
was a never-to-be-forgotten moment.
I was in the rear of the section. I considered our column;
expressions and attitudes at that moment imprinted themselves on
my memory. Fifteen yards in front at the head of the section
Guillaumin was marching along with his usual swing. I ran an eye
over my half-sections. Here were Gaudéreaux and Trichet; there was
Judsi, the buffoon, giving an imitation of the goose step; Lamalou
with his képi à la Knut. Loriot, the man with the rupture, gloomy and
already dragging his leg along affectedly; my corporals, Donnadieu,

a little pale, sandy-haired man gripping the butt of his rifle
convulsively. Bouguet, extremely fit, turning round to see that all his
men were there.
It gave one the impression of a holiday parade. I have mentioned
the windows decorated with bunting, the men's rifles and packs too
were ornamented with little flags. And the flowers! In one section,
Trichet, who was a gardener by trade, had procured great bundles of
them. They had been distributed among the different half-sections.
The other sergeants had been given roses or dahlias by their men. I
had been forgotten, and when Bouillon, who was annoyed about it,
had brought me some geraniums just as we were starting, I refused
them with thanks! Quite unnecessary! I alone was clear-headed. You
would have thought that I alone knew to what a sinister revel we
were hastening.
Left! Right! We were all marching at the same pace, towards our
mysterious destiny. For how many of us had Fate signed the order of
arrest! I tried to pick out the first victims. Was it that block-head—
Henry, I think, they called him—who would be picked up in a
fortnight's time, with his leg or head torn off? A big dark fellow was
laughing, showing his teeth in a huge guffaw. I mentally put him
down as not being one of those who would come back. This ghastly
game fascinated me.
On getting to the main street we halted for a time and waited to
take our place in the regiment. The bugles passed by.
Sol mi: Sol do!
La classe s'en va!
Then we followed the stream.
A line had formed three-deep along each pavement. All F——, all the
neighbouring country was crowded there. Our departure effected the
country even more than that of the regulars. These men from
twenty-five to thirty years old were the married youth, who had
taken root and founded a family. Drawn up in the doorways, or

leaning from the windows, women and children, with all their heart,
were shouting:
"Long live the 3rd...!"
A territorial called out:
"Halloa boys? We're coming on the day after to-morrow!"
"Hm! At a safe distance!" Judsi retorted gaily.
The men waved and smiled at their relations and friends who had
come up, but nothing further; there was no chance of hanging
behind, or falling out. Even Judsi soon gave up his tomfoolery; each
one felt instinctively that a brave bearing would influence the
people's confidence.
The clamour round us continued to increase:
"Long live France! Long live the 3rd...."
The distant voice of the bugles only reached us in snatches now, but
we marched in step all the same. The collective excitement went to
my head. I marched with my eye fixed in front of me, my rifle glued
to my shoulder, a soldier among these soldiers.
When we got into the Avenue de la Gare, I caught sight of De
Valpic, guide to the 2nd section. He had half-turned round, and was
leaning to one side, with an anxious expression. I suddenly thought
of his water-bottle, filled just as we were leaving. Drops must be
trickling from it now at every step.
I was ashamed of myself. I despised myself. If I did not go quite as
far as to vow to make amends for this villainy—and how I should
have set about it I do not know—at least I swore that it should be
my last; yes, the very last.
I was going to be born anew, and quite different. My heart was
beating more warmly. Carried away by the rapidity of the pace,
uplifted by the untiring acclamations of the crowd, it seemed to me
that I was out-distancing the man I had been.

PART II
BOOK IV
August 9th-12th
CHAPTER I
UNDER WAY
The bugle sounded. We might get out.
Versailles. How these platforms swarmed! Ten convoys, like ours,
with their carriages decorated in the same way with flags and
branches of green leaves, scribbled over with harmless inscriptions
and caricatures, had turned out, topsyturvy, this crowd of soldiers in
chequered uniforms. The hubbub was tremendous. Everyone
seemed in the best of spirits. There were flowers in every cap. We
were forbidden to go far. As a matter of fact, no one thought of such
a thing, we had to take care not to lose our company, and section.
We hardly ventured as far as the fountains of drinking water. Having
awaited my turn for it, I went up just after Judsi. I actually felt
inclined to smack him on the back, he was so tantalising with his
trick of drinking with his lips glued to the tap.
Guillaumin told me when I joined him that the halt was to last for an
hour. We might take a turn! We amused ourselves for a moment, by
watching some horses being entrained—by no means an easy job.
They were hoisting them in with slings. Their place of export was
marked "Remount depôt Saint-Lô." Guillaumin nudged me with his
elbow.
"Some concentration, what!"

It was true. All the Brittany lines, most of those from Normandy and
Atlantic coast, converged there, bringing with them the blood of a
third, or almost a third, of France.
We got back into the train. Evening was coming on. Guillaumin and I
were to keep order in the truck; forty men in our charge. To begin
with everyone had submitted to the restrictions concerning the
arrangement of packs and rifles. Now the confusion began. A lot of
them had got hold of their packs again to make a pillow, and most
of them began to shed their equipment.
Lamalou set about moving the seats. I interfered. He began to argue
about it. Guillaumin had to join in, and Bouillon too.
We started off again. Were we going to skirt Paris on the north or
the south? We soon found out. The train approached the gradient at
Buc. We watched in vain for some aeroplanes. Judsi exclaimed:
"Wot are you thinkin' of! They've all gone orf to Berlin!"
There were brief stops at small stations. The same scene was
repeated every time: idlers crowding up to the railings to cheer us
and we replying with shouts of "Death to the Bosches!" "Down with
the Kaiser!" solely out of politeness, in order not to disappoint all
these people who had waited so long. There was no longer the frank
enthusiasm there had been just now on leaving F——. The men
were getting tired. The Red Cross members who distributed
chocolate, fruit, and post-cards in profusion were no longer hailed
with the same delight. Loriot and Lamalou ended by grumbling
because they were so stingy with the wine.
The night fell, and with it what was left of cheerfulness. Judsi was
the last to give in. He picked out well-known airs and set new words
to them, ineffable drivel, beyond all description, and probably of his
own composition. The coarsest sallies still raised a few laughs. These
echoes of an inane merriment were becoming quite unbearable.
I thought of shutting the men up altogether. Guillaumin dissuaded
me from doing so:

"Take care you don't get yourself disliked!"
It was getting dark. Corporal Donnadieu lit the section lantern.
Where was it to be hung? To that hook in the middle of the ceiling.
It swung backwards and forwards giving a flickering light.
Everyone was making preparations now, for going to sleep. A small
number occupied the seats, the rest were stretched on the floor.
They formed tangled groups in the shadows. Good-humoured elbow
digs and expostulations were exchanged.
Guillaumin had lain down beside me, with his own head on his pack,
and that of one of his corporals fitted between his knees. He became
expansive and exclaimed:
"How's this for up-to-date comfort!"
It was a stifling evening. I was hot and uncomfortable, as I had not
even had the courage to undo my belt. We had had a cold supper.
The smell of cheese and sausage still hung about. It was the first
taste of the promiscuousness. As long as the two doors were open,
the atmosphere was breathable. But here was Bouguet, who had
just lain down, shouting:
"What do you say to shutting the door. There's a beastly draught."
Some coarse aside of Judsi's raised roars of merriment.
Lamalou sat up.
"Let's shut the door."
I shouted from the end of the carriage:
"Steady on! You must leave room for a little air to get in!"
Lamalou took no notice.
"Didn't you hear?" asked Bouillon. "The sergeant's orders were to
leave it open!"
Bouguet objected.

"Do you want us all to catch our death of cold, sergeant? Besides it's
the rule that doors must be kept shut at night."
Guillaumin raised himself, and whispered to me:
"The chap's quite right, you know!"
"How's that?"
"The poilus will roll off into the scenery when they go to sleep."
This prospect was disquieting. I said no more, but let them do as
they liked. A minute afterwards I complained of the stuffiness.
"Why not have the ventilator opened?" Guillaumin suggested.
"What ventilator?"
He was obliging enough to get up and feel about to find the bolt.
The shutter slid along in the groove. A scrap of sky showed through,
and some fleecy clouds shining in the moonlight. I announced that I
should like to spend my night at the window.
"Are you quite off your chump? Try to have a snooze!"
"I'm not sleepy."
I groped along avoiding the slumberers and reached the seat near
the wall. I succeeded in pulling myself up, and leaning my elbows on
the opening, I breathed in the delicious night air.
Our convoy was crawling along at a monotonous pace, through the
darkness. It seemed of an immoderate length, dark from end to end,
except in the centre, where the light from the officer's saloon shone
on the ballast. By leaning out while we went round the curves I
could make out the fire in the engine, a curtain of purple, with
fantastic shadows moving against it. Our whistle often blew, and
others answered stridently from the distance. The regular clank of
the wheels on the rails was audible, and a minute red dot could
sometimes be seen at the end of a straight piece of line—the tail
light of the train ahead of us.

There were thousands of fleecy clouds scattered over the sky, all lit
up on the same side by the pale rays of the moon. We were leaving
the Vallée de la Bièvre. The surrounding country was growing flat. A
far-spreading horizon soon became visible beyond the open fields.
Then the radiance of Paris rose into sight.
It was impossible to mistake it for the translucent band of a
mysterious, tender blue which still lingered in the west. It resembled
rather the afterglow of a sunrise or of a huge fire. The silhouettes of
houses and trees stood out in the foreground like Chinese shadows
against the glowing distance.
The City of Light! I revelled in the vision and the symbol, both
equally imposing. What a part this city had played in history! How
feverishly she throbbed to-day. I blamed myself for having failed to
take advantage of the magnificent opportunity which had been
within my reach the other day. Ought I not, with more fellow-feeling
and enthusiasm, to have mixed with the crowd, and roamed day and
night in search of the secret of Paris, which was also the secret of
France! I remembered the boulevards brilliant in their multi-coloured
lights, the crowd crushing against the windows of the big daily
papers....
Fresh news would be appearing on the tapes at this hour. What
would it be? We had not been able to get a paper all day, but a
persistent rumour had reached us: "Mulhouse!" ...
Was it a prelude to victory? Was Paris illuminated? Perhaps.... But
what if it were one of those ephemeral successes? What evil
presentiment enslaved me? Was I still under Fortin's influence?
(Fortin who was never mentioned now except in a whisper. We knew
he was confined to his cell: awaiting trial by Court Martial.)
Paris! Why should I dream of defeat? Paris, our head and our heart!
Paris as hostage! As martyr perhaps! I pictured the horde of
Barbarians pitching their tents in the country we were slipping
through, turning their guns on to the glittering capital. Where would
their fury end? What would be left of these buildings, this glory,

which seemed destined for immortality? These were gloomy visions.
Sick at heart, I longed with more ardour than I had lately longed for
anything on earth, for the miraculous miscarriage of this probability.
If there was one thing at which I was astonished, it was at not
finding most of my companions at the ventilators like myself. To
send Paris a last greeting! They must all, or nearly all, be feeling
that all they counted dear, was shut up within those walls. I who had
no one there—nor anywhere else either for that matter—this thought
shook me. Nobody. My father? Was a stranger, as I have already
said. I thought nevertheless of his farewell, of his fugitive
tenderness, due to obscure ties of the blood. Who else was there?
Laquarrière? If he thought of me it would certainly be to
congratulate himself on being safely in shelter, while I was risking....
Nobody. There really was nobody!
And yet my eyes probed the darkness, my glance was unconsciously
drawn in a certain direction.... In that suburb, I could imagine a
street, a house, ... in that house someone ... someone who had
written!—"We think of you a great deal...."
An idle dream and one which passed.
There was a metallic rattle. We were crossing the Seine. Still a few
more miles to go, through the dark countryside. An important station
was coming soon. Myriad lamps lit up countless railway lines.
Our speed slackened, till we slowed down to a walking pace. We
slowly skirted endless pavements. I could distinguish retreating
uniforms and piles of arms. An artillery sentry gave me a friendly
wave.
"What station do you come from?" I shouted to him.
"Marseilles!" he replied.

His warm Southern accent had made me start. How many convoys
had he seen rolling past in the same direction during the few hours
he had been there with his battery. The concentration! The idea of
this gigantic operation made one think: these trains whose time-
tables had been arranged months, no years, in advance, these
hundreds upon hundreds of trains flashing across the country in
every direction; skirting gulfs and mountains, crossing the rivers,
flowing in from every extremity of France, carrying the immense
masses of war material, and the harvest of young men. Caught up in
this huge mechanism, this invisible unity, what a small thing I was,
for all my pride of intellect!
A new tack soon threw us off the main lines. I occasionally turned
round to look into the interior of the carriage, where the men were
sleeping, livid beneath the swinging lantern, like corpses, I thought,
at the bottom of a sunken submarine.
I stayed like this for a long time, half-awake and half-dreaming. In
what direction were we going? To Maubeuge? Or Châlons? I
remember a long stop in the middle of the night on a siding on the
outskirts of Noisy-le-Sec.
Some of the men were awake, eating bread and cheese. I felt a tap
on my shoulder.
"Well, are you going to make up your mind to it?" Guillaumin asked
me.
"To what?"
I yawned.
"To take a nap. Why you're so sleepy you can hardly stand up! Come
along and lie down!"
"Where? There's no room!"
"What about my place?"

I declined it with thanks. He insisted. Oh, come along! It was his
turn to take the air!
Very well. I gave in. We started off again. The outlook was no longer
so attractive. The glow of Paris had faded into the distance, and the
moon had just sunk behind the deep blue horizon.
CHAPTER II
HARASSED, ALREADY
When I woke, dawn was stealing in by the door which was once
more open. Judsi had installed himself at it, his legs dangling
outside. We all looked the worse for wear and had puffy faces.
Where were we? It was dreary, barren country, an indefinite
switchback of bald ridges. The rocky part of Champagne apparently.
Exactly. A few minutes later our train drew up at Rheims.
The weather was dull and drizzly. We felt cold when we got out: the
men began to stamp their feet. We N.C.O.'s joined up together.
Descroix and Humel complained bitterly of stiffness. The filthy
carriages! Must have been made on purpose for us! Everyone was
sighing for his coffee. Guillaumin preached patience. Frémont had
wandered off to scribble a letter. De Valpic was pale and silent and
heavy-eyed.
I left them and went in search of some clean water. When I came
back, tidied up and much refreshed, coffee had been brought. The
tin drinking cups were plunged at will into the "dixeys." It was
scalding! A real treat! There was "rooty" too. And the sun came out:
we were reviving.
Soon, a circle formed round Lieutenant Henriot. In order to make
himself pleasant Playoust had put certain questions to him
concerning the strategical situation. The other at once owned that

he had had certain hints from the colonel—oh, it was official then!—
certain indications....
I drew near. He spread out a map on a seat, and began to speak
with great fluency.... I tried for a moment to follow him, but
disobliging shoulders got in the way. He was pointing out certain
landmarks and routes, and giving the names of towns and villages.
It was all a closed book to me! I got tired of it and went off; I was
inclined to mistrust these perorations by a subaltern.
Our train was shunted back, and we started again.
I was tired and peevish, and fumed at the length of our journey.
Eighteen hours already, and we were nowhere near the end!
Our destination still remained a mystery, a problem which disquieted
us.
Guillaumin plumped for Sedan, and worried me to tell him what I
thought.
"What on earth does it matter to me?"
"Do you think they'll come back as far as that?"
To annoy him, I said:
"Sure to!"
He exclaimed:
"Well, to be going on with, you know we're at Mulhouse! Absolutely
official!"
On the outskirts of Ste.-Menehould, there was a prolonged halt,
without permission to get out. Another convoy was standing on a
side line. There were some poilus on the platform. Bouillon drew
attention to their regimental numbers. They belonged to our
division. The men at once called to each other, and asked them to

join in a drink. Everyone was delighted. It seemed little short of
marvellous to find neighbours from their part of the world,
Beaucerons, so far from home!
A new start. The country was becoming hilly and picturesque. There
were some gorges and then a long tunnel. There was no more doubt
about the direction we were taking! Corporal Bouguet, who had
served his term with the 4th, was most emphatic: we were taking a
bee-line to Verdun!
Good! the idea of fighting under the shelter of a powerful fortress
was not displeasing.
Two hours more. The valley of the Meuse was reached, Verdun
attained, and then left behind.... The deuce! Were they going to
detrain us at the frontier in the first line...?
No, a few miles farther on, the train stopped in the depths of the
country. There was a bugle call, and Henriot shouted:
"Here we are!"
"Where?"
"At Charny, the terminus. Out you get! And no disorder, you
understand!"
In three minutes we were on the ground, arms and baggage and all.
The captain passed by.
"You're not over-tired?"
Lamalou thumped his chest.
"In the pink, sir!"
"So much the better, because you've got a nice little walk before
you!"
Some long faces were pulled. It was nearly midday. We had had
nothing to eat and the heat was killing.
"Now we return to business!" said Judsi.

We went into the neighbouring field through a gap in the hedge.
Gaudéreaux bent down and picked up a clod of earth. He sniffed at
it.
"Pooh!" he said. "It ain't up to ours!"
The lieutenant heard him, and reproved him for it.
"It's the same thing, it's French soil. It's what we are going to be
killed for."
Did he count on producing an effect? The other gazed at him,
dumbfounded!
A little walk indeed! I chewed the word with rage during the seven
hours that this march lasted. Did they think it was the right way...?
The right way to discourage the men!
No respite except the hourly halts, and they managed to cheat over
them, by not whistling until the hour, or an hour and five minutes
was up, or cutting them short by two minutes!
If there was one thing that astonished me it was the goodwill and
endurance, which I saw manifested all round me. "Grouse," the first
day? Oh no, that was out of the question! A praiseworthy resolution!
When going through the villages, the men found a way, even when
absolutely done up, of putting on a spurt, and making eyes at all the
pretty girls!
Judsi sang snatches of very doubtful songs, which made some of
them laugh, while others, their more flighty sisters, blew us kisses.
Corporal Bouguet all at once started a marching song: the men
joined in the chorus: the captain did not interfere, but the
commanding officer came rushing up, a pot-bellied puppet, perched
up on his big horse. Oh, come along! What was all this? Would they
shut up? Would they never think of the war as something to be
taken seriously?

This rating was upsetting. Another incident helped to damp their
spirits. The distracted group we passed on the roadside ... a
lieutenant, a corporal, the cyclist, and an auxiliary medical officer,
surrounding a man stretched on the ground, a reservist who had
just fallen out. I caught sight of a violet face and glassy eyes.
The rumour spread that it was a fit.
The name of the man was soon discovered; he belonged to the 21st
company, and was named Gaspard Métairie, a coppersmith from F
——. Dead? Oh, yes! lying there like a log! I listened to the men's
remarks. Poor wretch! It made one's heart bleed. So soon. And so
stupidly. If it had been some of the Bosches' work there would have
been nothing to be said. But like that! Simply tired out! Fathers of
families, just think! Carrying the full weight!... But what was the
good of fussing? The war would not be over this evening!
"Oh, a lot they care wot becomes of us," Loriot said. "I'm done, I
am!"
He retired on to the footpath.
"What's the matter now?" I shouted to him.
"No good. Can't go on!"
"What can't go on?"
"I can't. I'm an old trooper, I am!"
He stopped and tried to sit down. The whole column slowed down,
much interested and amused.
"March up, confound you!"
The captain overtook us.
"What's up?"
My nerves were on edge. I don't know what put the whim into my
head, but I gave a dry description of the scene at which I had
assisted, the verdict given by the Medical Officer, and the man's

recriminations, swearing that he would make a point of falling at the
first shot.
Loriot was hugging himself and pretending to be in awful pain.
The captain did not pronounce an opinion.
"Stay with him, Sergeant; you will report him to the Medical Officer."
So we waited. Loriot sulking and livid with rage. I irritated at the
thought that this task ought to have fallen to Playoust, the sergeant
of the day.
The companies, as they marched past included us in the same
glance of ironical pity.
Surgeon-Major Bouchut recognised his "client," as he called him, at
the first glance.
"Ah! It's hurting you, is it? Easy enough to say so! I can't examine
you here. Come along, jump in there! We shall soon see!"
Under my very eyes, Loriot hoisted himself up into the ambulance,
settled himself down comfortably, and began to chat with the
orderlies.
Infuriated by my own stupidity and the delay it had cost me, I
hurried on.
The road went up and up. I began to experience the smothered
sensation in the shoulders and chest caused by having to carry a
pack. Every hundred yards—and what a bore it was—the buckle of
my sling came undone, as the point was blunted and did not catch
properly, and the rifle slipped. An inconvenience which could not be
remedied, and which seemed likely to pursue me throughout the
campaign. It was about four o'clock; the sun was still blazing, drops
of perspiration gathered inside the men's caps and occasionally
trickled on to the ground. To think that this march was nothing:
mere child's play.
The worst of it was that just as I was about to catch the others up,
my right foot began to feel sore. I remembered that the evening

they had delivered these boots.... At the first halt I quickly took off
both boot and putties.
The inspection filled me with consternation. I had hoped my stocking
alone was responsible for it.... Not at all, there was no irksome fold.
It was the counter right enough. What was to be done? The fatal
blister was gathering. The prospect of hours of atrocious pain stared
me in the face. The little courage I had oozed away.
I was dying of thirst; I poured out a cupful. The water was warm,
but it refreshed me all the same. Catching sight of De Valpic, lying
down with sunken cheeks, I went up to him.
"De Valpic?"
He opened his eyes.
"Will you have ... a drink?"
"But you...?"
"I've got plenty, don't you worry. I noticed ... your water-bottle is
leaking, isn't it?"
"Yes, I don't know how it happened. It's very troublesome."
"Hand me your drinking cup. There now. Wait a minute!" I half-filled
it for him, added a few drops of Ricqles, and pulling my mess-tin out
of my haversack offered him some sugar. He took two pieces, but
greedily drank a mouthful without waiting for it to melt.
"Thanks; my throat was so terribly parched."
A wave of red flooded his cheeks.
"You're a good sort, Dreher."
I sat down beside him and asked him in a friendly way whether he
was not awfully tired?
"I look it, don't I?"
"Oh! Just like everyone else!"
The whistle blew! I left him.

"Cheer up!"
But at the next pause I avoided looking in his direction. There was
only enough water for me.
A few more miles. The men were grumbling quite openly now. From
time to time one would fall out, and all at once, or little by little lose
ground, and get left behind by the platoon. What was there to be
said? I interfered no more. These fellows had not had a bite since
five o'clock that morning.
Were we to leave these stragglers their rifles, or not?
The subaltern said they were to be taken away.
The result was that those who remained threatened to give up in
their turn. Two rifles to drag about, not much! They were quite
willing to do their bit, but they were not going to be put upon, not
them!
Lieutenant Henriot changed his mind.
"Each man will keep his own rifle!"
"Too late now. How are we to find the owners of them all?"
He got scared.
"I was wrong. I made a mistake!" he repeated.
Guillaumin reassured him by saying all the poilus were sure to turn
up.
One would have thought that it all amused him, the long day's
march, the hunger and thirst,—everything. He kept on joking—
rather too familiarly perhaps—with Lamalou and Judsi and those of
our men who still held out. He even took it into his head to talk
theatres to me! I soon sent him off with a flea in his ear, as may be
imagined. He did not notice for some time that I was limping.
"Foot hurting you?"
"Yes."

He offered to carry my pack. I was on the point of allowing him to,
but Lamalou, who was watching me furtively, jeered.
"Halloa, Sergeant! You following poor Loriot's example?"
"No. I've got a sore foot," I said; "but I am going to stick to it all
right."
On my refusal Guillaumin took on another lame dog's pack. Lamalou
soon followed his example.
I only kept on automatically. My heel must be quite raw. Perhaps I
was risking the fate of my whole campaign. It couldn't be helped. In
my heart of hearts I almost congratulated myself on this opportunity
of escape.
We ended by breaking all ranks. Sections, platoons, and companies
were all mixed up. We were just a herd, and at the entrance to a
little hamlet when the order was passed down to shoulder arms no
one budged. Not much! We're not so green as all that! Give us a bite
o' some'at first!
But it was not to be so lightly disregarded! The captain rode down
what remained of our column, and repeated the order, brandishing
his whip furiously. The men made up their minds to obey it. We
found out the reason for it afterwards.... A general surrounded by
his staff, was watching us march past ... someone whispered that it
was the general in command of the division.
It was unfortunate that this should be his first experience of us. He
took stock of us superciliously; his forehead puckered in a frown of
disillusionment. The men growled.
"Like to see you in our place, old chap, with an empty stomach, and
a pack on your back!"
Oh, that arrival at our billets in Orne, a village of five hundred
inhabitants, already overflowing with troops of all kinds. Oh, how
depressed we were, both physically and morally. I was especially
exhausted. There was a complete lack of any spirit of organisation

among the authorities, and the troops were totally out of hand. We
were obviously worth nothing at all!
Where and how did the men get food? Guillaumin luckily took charge
of the whole section. I believe he bustled about, got hold of the
mess-corporal, and was the first to arrive with a fatigue party, at the
issue of rations which took place in the market-square towards
midnight.
I had sacrificed my "posse," but I still had some bread and hard-
boiled eggs left that I had brought with me from F——. I took off my
accoutrements and boots and installed myself in the best corner of
the stable reserved for our lot, and slept on the straw till five o'clock
next morning.
CHAPTER III
IN BILLETS
The weather next day was glorious. A fine rain had fallen. The men
now very clean and spruce, wandered about the village, with their
caps cocked over their ears.
No danger threatened. No one would have thought we were at war.
And as for the Bosches, let them go hang! The natives had certainly
said, shaking their heads, that they had already seen some Uhlans
on the neighbouring hills. Absurd inventions. A dragoon whom we
questioned burst out laughing in our faces. The Bosches! They had
indeed been across the frontier for twenty-four hours or so, over
there towards Longwy. They were soon sent to the right-about. We
might sleep in peace! We had the regulars in front of us, about
twenty regiments of them!
Some trenches had been dug at the approaches to the village, the
21st had spent the night in them. It was one of the regular
amusements to go and look over them during the day-time. They

were very unconvincing, casually hewn out and occupied. Orne's
defensive organisation! Who could take it seriously?
"Blowed if I don't think our good time's beginning," said Judsi.
The villagers were really delightful. These poor dwellers by the
Meuse! They did not have much of a time afterwards. Who would
not have become embittered in their place? At the outset we were
touched by their cordial, almost friendly reception. Many of us went
in search of a bed. I believe that but few were found which did not
already boast an occupant. Lamalou's experience was a case in
point. Other attachments were formed. On the other hand, Playoust
came to grief—the thing became known immediately—with the
grocer's pretty wife. He revenged himself by attributing the mishap
to the regimental sergeant-major.
The outstanding feature—which never varied throughout the
campaign—was the catering. We N.C.O.'s messed together. But
Descroix and his lot were already dissatisfied with this arrangement
and suggested that each platoon should fend for itself.
I was doubtful about this, but Guillaumin took me aside.
"Leave them alone! It will suit us much better!"
He explained that he had made a great find in the shape of a top-
hole cook, a real professional. He had been chef at Bernstein's!!!
The fellow would perhaps consent to cook for three or four, but not
a word!—or the officers would appropriate him. He made me
acquainted with the prodigy, Gaufrèteau, a smooth-skinned, cold
creature, very much on his dignity, who would not bind himself in
any way.
Our comrades had managed somehow or other to get hold of some
wine at twenty-four sous the litre, good pale Lorraine wine, on which
they feasted among themselves. You had to pay two francs
everywhere else for a much inferior quality.
Guillaumin determined he would not be outdone, and went off in
search of it. He ended by coming back triumphant, bringing the

same wine at 1 franc 20, and the wine merchant was to have the
bottles back!
He poured out several bumpers and made fun of De Valpic for
refusing to take any. I suggested adding some water to it. He ragged
me in turn.
"What are you afraid of? If we've got to be knocked out at this job,
at least let's have our money's worth first!"
This coarse tomfoolery maddened me. Was it an attitude of mind
assumed for war-time, to match that of those poor brutes of
troopers. I sarcastically twitted him with it. He was not at all
annoyed.
"Just what I'm trying for!"
Thereupon he invited his corporals and mine to empty new bottles. I
could not leave him in the lurch. All these people were drinking and
rotting with him round the table in the kitchen of our farm. The
place was filled with the smell of burning fat. What a scene, and
what a pastime! I was bored to death.
"I'll see you later!" I said, and went off making some excuse. I
should have liked to meet Fortin or someone of that calibre. A pity
they'd left him at F——, but perhaps it might be lucky for him.
I took a turn round the neighbouring billets. Nothing but men lying
about and a lot of them had spread into the fields round about, and
were taking a nap in the shade.
My foot was better. I had painted it with tincture of iodine that
morning and the day before.
I got out of the village without any difficulty. A sentry, far from
stopping me, asked me for some tobacco.
A hill near by attracted me. I hoped to get a good view of the
surrounding country from the top. My ideas on the topography of
the neighbourhood were singularly confused. I knew the distance

from Orne to Verdun, 18 km. 7., and I was inclined to think the
Valley of the Meuse must lie somewhere near to southwards.
My walk was not at all satisfying. From the summit I had aimed at, I
could see nothing but another ridge, crowned with a dark fringe of
trees. There was no outlet through which I could get a view. I came
back, tired and disappointed. Up there I had tried for a moment to
give rein to my imagination. Here is my country—Lorraine, I said to
myself, and I looked in vain for that serene melancholy, that
voluptuous calm, in the landscape.... It was obviously yet another
example of poetic exaggeration. It was not unpleasing country, but it
was more like—oh, anything you like to name, Perche, or the
country round Paris.
I went back. On the way I heard myself hailed from behind a hedge.
It was Playoust's voice. I went up and found the whole set of
sergeants from the 22nd. De Valpic alone was missing. I was
surprised to catch sight of Guillaumin, with cards in his hands.
"What! You don't mean to say you're playing?" I said.
"Yes, they're teaching me!"
He explained with great gusto that they had come to fetch him to
make up a second four (Frémont was there too). He had no gift for
it. But he was sticking to it all the same. He had already lost one and
threepence!
"And what about you, old boy? Do you know their blooming game?"
"Yes," I replied coolly, "but it doesn't appeal to me, you know!"
I did not linger. I bore him a grudge. If he was going over to that lot
he was quite at liberty to do so, of course, but he need no longer
count, as a matter of course, on my society—Oh dear, no!
I went to lie down. I yawned. I was bored to tears.
For the sake of something to do I emptied my pockets of their
miscellaneous contents.

On pulling out the packet of letter cards which I had brought quite
by chance, I thought: Hello, why shouldn't I write a letter?
But to whom should it be?
Not to my father. I had nothing to tell him.
As for my brother, I had not even got his complete address. I did not
know what company he was in. My brother Victor!... Why should I
be thinking of him particularly just now?... Where was he?...
Somewhere in the Woevre. Not very far from me, no doubt.
What spirits was he in? War was the dream of their life, their goal,
their one passion, to all these soldiers. What a bizarre idea it was.
Simply a case of suggestion! What did they hope for from it, after
all? For the space of a second I had a strikingly clear vision of him,
calm and resolute, with his cap well down over his eyes, issuing his
orders.
The idea again occurred to me of writing to someone—whom I
knew. But I counted on my fingers; it was only three days; and it
would be better to wait until I had something worth writing about.
When I went out again I found myself face to face with Henriot.
"Halloa, how are you getting on, Dreher?" he said.
"Pretty well, sir!"
"Pity we get no papers!"
I saw that he was bursting to have a talk, and, by Jove, it would be
good policy to get on good terms with my immediate chief once and
for all. I need only imitate Playoust; I asked him slyly what he
thought was happening.
He needed no persuasion! He was fully aware of the fact that I had
not been among his audience the day before, and ingenuously
expressed his regret. De Valpic and I, he said, were the two best-
read men in the company. He would so much like to exchange ideas
with us!

As for exchanging ideas, all I was aiming at was to get him to trot
his out ... to get at him in that way. At my request he went to fetch
a map of the whole of our eastern frontier.
I led him on to various subjects which I wished to explore, without
taking great pains about it: the composition of our army, the
probable figure of our effectives, our system of fortified towns.
He replied at length, furnishing information collected and classed
without much sense of criticism. He placed the ideas he had gleaned
from the special courses for officers, on the same level with those
picked up in certain technical reviews, and a great number of
commonplaces borrowed from the daily papers.
But he fancied himself particular on the questions of strategy.
The German scheme was done for! Everything was based, you see,
on the complicity or, at all events, the passivity of Belgium. They had
concentrated four army corps in their camps in advance, Trèves,
Malmédy, Atles-Lager. They would have hurled them simultaneously
on to the left bank of the Meuse, and they could have gone straight
ahead across the flat country. In five days they would have been in
the Scheldt, on the way to Valenciennes. They would have reached
the valley of the Oise, and from there have gone on to Paris. And it
might quite likely have succeeded!...
He warmed to his subject.
They came to grief. The Belgians have demolished forty thousand
men, a whole army corps. The English have had time to land, and
we to fall into line. And what do you say to our retort in Alsace the
other day? We are getting the entire control of affairs into our
hands.
His forefinger indicated Mulhouse.
Look, we're back there again and firmly based there, for good,
believe me! It's obviously ours. Take Strassburg? No, not at once.
Invest it perhaps, that's all. But push straight on across the Rhine.
It's not so easy, but we should spare nothing in order to do that!

Just think! Once past the Rhine all we should have to do would be to
go straight ahead, and cut Germany in half. Separate the Northern
Provinces under Prussia, from Bavaria, which is not nearly so
antagonistic to us really, and the Russians, after having taken
Cracow and Prague, will soon be shaking hands with us!
He stopped talking and wiped his forehead. Gazing at his map he
seemed to regret that it did not include the theatre of to-morrow's
victories.
I gazed at him with surprise and mistrust. But he seemed so sure of
his ground! I knew these theories were current in higher military
circles. These daring anticipations reminded me of those expressed
so many times in my presence by my father and brother.
How the thought of Victor pursued me! I could not restrain myself
from mentioning him.
"Oh! What is he in?" said Henriot.
"The 161st St. Mihiel."
"A crack regiment that!"
"Have they been in action yet?"
"Probably!"
"And what about us?" I said. "Do you think we shall soon be
engaged?"
"I should hardly think so. What is there ahead of us? Luxembourg.
They violated it on August 2nd. A lot of good it did them! Their
offensive turned northwards. Now they've got to defend themselves.
I don't think they'll attempt anything much against the Stenay gap. I
don't think we're much exposed!"
So much the better! I thought.
"I personally should have liked to fight in this part of the country."
"Do you come from near here?"
"Yes, from Villers-sur-Meuse, about fifty miles from here."

He added a few details. It was only his second post, and he asked
for nothing better than to stay there as long as possible. His father
had been master there before him, and was buried there.
We are Lorrains, you see, that's why I made such a point of being in
the reserves.
I asked him naïvely if he had ever thought of war.
"What! We never thought of anything else!"
I suddenly recognised in him, the obstinacy and exaltation which
had surprised me, as a child, in the inhabitants of Emberménil.
I had honestly forgotten that such rancour survived. After more than
forty years! Revenge then was not simply an abstract pretext, it
corresponded actually, to a desire, a hatred! The old furnace still
threw out sparks in the new generation capable of setting the
conflagration alight at any moment.
I could not help blaming this fury. The stupid dislike of resignation
and discretion, of that which constituted men's happiness.
Did I not, however, vaguely envy this impassioned tone and face?
Why did I announce:
"I'm a Lorrain too, you know!"
"Really?" he said; "Oh well, I had suspected it, just from your name.
What part do you come from?"
I told him. He was delighted. He had relations round about Lunéville.
"We are the only ones in the platoon. That ought to make us good
friends, what?"
I felt that he was moved. I pretended to be. But I was chilled again.
I only thought like the other evening, under my father's gaze: "I a
Lorrain! In what am I a Lorrain?" And the idea that I should have
brothers and foes, just because I was born on this side, and not on
that side of a certain line, seemed to me grotesque.

It was about time for "cookhouse door" to go. Our card-players
reappeared. I enjoyed first their surprise, then their only thin-veiled
annoyance. It was particularly aggravating for the schoolmasters.
Henriot, with his hand on my shoulder, was talking to me as to an
intimate confidant. They began to wander round, anxious to
interrupt us, but withheld from doing so by their deeply-rooted
respect for rank.
Great Heavens! if I had guessed what would put an end to our
conversation!
Henriot stopped abruptly in the middle of a sentence.
"Hsh! What's that...?"
"That dull distant rumble...."
The men scattered about in the road and in the yard, were listening
intently. Corporal Bouguet who was passing muttered:
"No, it can't be...?"
It began again, like the echo of a peal of thunder....
Then the subaltern pronounced the word I had expected:
"The guns!"
"What?"
It ran along repeated from mouth to mouth. The guns! The guns! I
shuddered with physical anguish. A battle in progress over there,
quite near by, which I felt would draw us in and swallow us up. The
guns! Were they the ones which would make a pulp of my body?
Guillaumin suddenly appeared and seized me by the arm.
"My heart's beating. How queer it is!"
I was stupid enough to swagger.
"It reminds me of the Camp of Châlons!"

Welcome to our website – the perfect destination for book lovers and
knowledge seekers. We believe that every book holds a new world,
offering opportunities for learning, discovery, and personal growth.
That’s why we are dedicated to bringing you a diverse collection of
books, ranging from classic literature and specialized publications to
self-development guides and children's books.
More than just a book-buying platform, we strive to be a bridge
connecting you with timeless cultural and intellectual values. With an
elegant, user-friendly interface and a smart search system, you can
quickly find the books that best suit your interests. Additionally,
our special promotions and home delivery services help you save time
and fully enjoy the joy of reading.
Join us on a journey of knowledge exploration, passion nurturing, and
personal growth every day!
testbankfan.com

Project Management A Managerial Approach 9th Edition Meredith Solutions Manual

More Related Content

Similar to Project Management A Managerial Approach 9th Edition Meredith Solutions Manual (20)

Recently uploaded (20)

Project Management A Managerial Approach 9th Edition Meredith Solutions Manual