Scenario 1 (length as needed)You are considering auctioning a L.docx
- 1. Scenario 1 (length: as needed) You are considering auctioning a Leonardo Da Vinci original sketch. You entice four bidders to come to your auction. The bidders’ valuations of the sketch in decreasing order are $3.0, $2.2, $2.0, and $1.5 (in millions). · If you used a second-price sealed bid auction, who would win and what would the winning price be? · If you used a first-price sealed bid auction and the optimal strategy for the participants was to shade their bid by 20% and the participants used this strategy, who would win and what would the winning price be? · Which auction should you choose to maximize your profit? Answer the above questions if the valuations of the sketch are $3.0, $2.7, $2.0 and $1.5. Scenario 2 (length: 0.5 page) In the auction described above, suppose that you could entice additional bidders to attend your auction. However, none of the new bidders would have a valuation greater than $3.0 million. Despite that fact, you expect the amount that the winning bidder must pay to increase regardless of the type of auction you use (first- or second-price sealed bid). For each auction, explain why you would expect the auction price to increase. If you want, you may assume the valuations of the original four participants are $3.0, $2.2, $2.0 and $1.5 million. Scenario 3 (length: 0.5 page) Some recent Super Bowl advertisements have spent very little time mentioning anything about their product--or even the name of the company. In particular, the two-minute long Ram Trucks "Farmer" commercial had only a few brief and almost unidentifiable views of their product until the last ten seconds of the commercial. Further, the name of the company was only mentioned in the last five seconds of that commercial. Explain why this commercial demonstrated the concept of signaling described in the textbook. In other words, why should
- 2. consumers be convinced that a Ram truck is of high quality because of the airing of that commercial? Scenario 4 (length: as needed) Suppose there are two types of people who need health insurance; high-risk and low-risk consumers. High-risk consumers have a relatively high probability of needing expensive medical care and on average incur $2,000 of medical expenses per year. The high-risk consumers would be willing to pay up to $2,500 for insurance that covers all their medical bills. Low-risk consumers would be willing to pay up to $1,500 for full-coverage insurance and on average would incur on average $1,200 in medical bills. Assume 1/3 of all consumers are high-risk and the remaining 2/3 of consumers are low-risk. Consumers know whether they are high-risk or low-risk. The insurance company knows 2/3 of all consumers are low-risk but cannot identify which consumers are low-risk. 1. If all consumers bought insurance, what price must the insurance company charge to break even in expectation? That is, what price must the insurance company charge so that the expected payments equals the premium? 2. Which consumers would purchase insurance at that price? 3. Are there wealth-creating transactions that are not consummated because of the information asymmetry? Scenario 5 (length: 0.5 – 1 page) A struggling company currently has a net worth of $700,000. It owes $500,000 from debt financing (assume these are loans from the bank if you wish). The value of the company to the owners is the difference between the net worth and the amount owed to the debt holders. What is the current value of the firm to the owners? Now assume that a project is presented to the owners that results in a loss of the entire worth of the company with a probability of 50% and results in a gain of $500,000 with probability 50% (resulting in a net worth of $1,200,000). Show that this in expectation decreases the firm’s value, and explain why, in spite of that, the owners of the company would want to
- 3. undertake the project. Writing Requirements · Length: as needed (Show your calculations where appropriate.) · 1-inch margins · Double spaced · 12-point Times New Roman font General Information Project Title: Galaxy Industries-Project Management Office Implementation Project Working Title: Galaxy PMO Proponent Secretariat: Mr. Smith, CEO Proponent Agency: Galaxy Industries Points of Contact Project Sponsor: Mr. Smith, CEO Galaxy Ind (916)555-5554 Program Manager: Mr. Brown, CIO Galaxy Ind (916)554-4532 Project Manager: Mr. Beausoleil, PMP PMC (916)443-4434 Customer User: Mrs. White Galaxy Ind. (916)442- 9876Executive Summary A Project Management Office (PMO) is a group or department within an enterprise that defines and maintains standards for project management. The PMO main objective is to standardize and introduce economies of repetition in the execution of projects. The PMO is the source of documentation, guidance and metrics on the practice of project management and execution. Project purpose: The purpose of this project is to establish a PMO for Galaxy. Currently the company is not being very proficient in the current projects they have established and most importantly the project managers on staff are not properly trained or certified. Therefore they do not have the skills to make sure all the areas required to start, manage, and complete the projects are being taken care of. Also the project managers are not centrally located so they can collaborate on issues. The Aim of this project is to:
- 4. · Relocate the 3 project managers so they are centrally located. · Have the three project managers become PMP certified · Install a software suite to manage projects. · Install an IS Intranet so that members of Galaxy Industries will have access to project reports. · Change the project management methodologies so that they are in line with PMI Global standards (http://www.pmi.org/PMBOK-Guide-and-Standards.aspx · Transition the company from legacy Project management methodologies to the Project Management Office.Project Purpose Business Problem Galaxy Industries has grown because of the recent increase in International sales instead of only US Sales as in the past. The growth rate and subsequent staffing has led to performance problems in several areas of the business process: · Inability to process orders within 24 hours. · Rising transportation costs because of increasing cost of fuel. · Inadequate employee training. · Greater demand for internal IT services related to the website, sales, financial reporting, and warehousing/shipping. · Inability to keep up with changing IT trends. · Excessive staff turnover in IT, marketing, and sales. Project Business Objectives Commonwealth or Agency Strategic Plan – Initiative or Critical Issue Project Business Objectives Development of PMO Methodic approach to identifying and resolving problems in business processes as identified in the Business Problem statement. Project Management Intranet Site Provide a means for employees to stay well informed regarding the status of project information. Intranet will include:
- 5. Progress, Problems, Risks and any Outstanding Issues. Assumptions · Scope changes must go through a formal review. · Galaxy industries is willing to change all of its legacy systems to the new system. · Galaxy industries will freeze any new projects from going online till the PMO is implemented. · Current live Projects will continue on the old system till completion. · The old system will remain live till the new system is live and certified and all pre-PMO projects are complete (system will be implemented side-by-side). · Galaxies 3 project managers will pass the PMP certification. · The Project Team has authority to make business decisions. · There will be available functional resources provided by Galaxy industries to the project team. · Executive support will continue through the project. · The project sponsors will make timely decisions in order to facilitate a smooth transition. · Plan to go live in 90 days from project start.Project Description The Implementation of a Project Management Office is a strategic challenge considering its uses in internal and ongoing projects. The approach utilized must be very straightforward, evolving and favorable. It should utilize the required tools and methods to implement a Project Management Office that helps the firm order mobility, manage employees and their training requirements by way of assessments and is helpful in time and budget management. As pointed out by the CEO, Mr. Smith, the PMP Certification should be required to start with the project and the involvement of each of the three Galaxy’s Project Managers along with PMC’s Project Manager must be initiated. Each of these must create a combined strategic framework to complete the project and achieve the desired results. The top down approach seems to be favorable here. Implementing the work-management and
- 6. informational system integrated with the PMO would help the firm to track the projects employee records. This will manage the issue of order mobility, save time & money and will also help in minimizing the employee (IT) personnel turnover. This easy and user friendly interface based PMO will help the firm to capitalize on increasing sales and manage the IT services in an improved and effortless manner. The website for Project Management will help in tracking the performance of projects which will assist in better assessment, implementation and analyzing the factors for improvement. The inclusion of informational and tracking system in the PMO will also help the firm complete a daily/weekly basis report of progress on projects. The location has to be decided with required infrastructure made available quickly to implement the PMO soon. This way, the firm will be more responsive to its customers, able to track delivery faster, provide efficient operations that lead to cost management. The inclusive training package (anytime training with videos) will also be able to manage the training related issues for the firm and help employee management in efficient methods. The inclusive marketing module of PMO will also boost the firm’s marketing capacity and planning with analytics. Therefore including PMO in Galaxy Industries’ Project Management processes will help the firm to expand and grow.Project Scope This project has been established to provide an effective project management office space, trained individuals and an Information Technology (IT) solution for our client, Galaxy. In this project there will be specific objectives tied to strict resources to ensure we meet the goal of both our organization and provide a quality product to our client. This project is essential for Galaxy to move forward with automating their business and providing a more efficient overall organizational reliability and effectiveness. Our project has the following objectives and requirements: · Training and test vouchers for three project managers to achieve their Project Management Professional (PMP)
- 7. certification · PMP boot camp location, times and costs · Testing location, times and costs · Analyze available options for office space and requirements to convert the space for functionality, co-locating three project manager · Acquire and provide logistics for the new office space (phones, computer equipment, office furniture, power, utilities, etc.) · Ensure functionality to support the sales, marketing, accounting and warehouse components · Obtain or create Information Technology (IT) solutions for project management functions · Develop or acquire project management software (i.e. MS Project) · Develop a Project Management intranet site (i.e. MS SharePoint, etc.) allowing centralized data and information collaboration and retention · Create formal project management methodology that outlines policies and procedures · Create a schedule and prioritize the objectives outlining clear deliverables for the client · Establish conservative compensation packages for the project managers Project considerations and restrictions · Ensure the project maintains effective levels of progress · Avoid project stalls and pitfalls · Ensure the project remains within the budgeted allotment Create a consistent schedule for meetings to keep projects on task and effectiveProject Authority Authorization Galaxy CEO: Mr. John Smith Galaxy CIO: Mr. Joe Brown Galaxy COO: Ms. Sue White Project Manager Matthew Beausoliel, PMP. His role is to develop a plan for the
- 8. project coordinate meetings with the stakeholders, provide meaningful updates, and make any changes that may be necessary. He is also responsible for tasking his support team and make sure they have a clear understanding of the assigned tasks. Oversight The Oversight Agency is Galaxy. Galaxy has control of the funding and controls the timeline in which they want the project to be complete. The company is in a solid financial situation and has partnered with CISCO, FedEx, and HP/IBM/MicrosoftProject Organization The PMO project is being implemented by the PMC organization. The PMC organization is using the standard vertical hierarchical structure for the project. This will maximize the standards strengths due to the small size of the project. The benefit of this organization is the balancing of objectives and coordination. This works because the support just report vertically to the project manager and then we can coordinate with program manager. Then vertically up to the Oversight of the whole project. Project Sponsor John Smith - CEO, Galaxy Industries Project Director Matthew Beausoleil - PMC Project Manager Matthew Beausoleil - PMC Team Members Jequetta Collier, Timothy Chatfield Customers Galaxy Industries Customer Representatives John Smith, CEO; Joe Brown, CIO; Sue White, COO Stakeholders All of the above, plus Galaxy department heads as follows:
- 9. Sales & Marketing, Shipping & Receiving, IT, HR, Accounting & Finance Resources Resources Allocation and Source Funding Source: General Fund Amount: $ 170,275.00 Source: Amount: $ Savings: $ 350,000+ Cost Avoidance Savings: $ Project Team (Full and Part Time Staff) 250 per hour, 1 PM plus two support $62,500 Galaxy 3 PM’s in training lost productivity salaries for 1 week $5200.00 Customer Support $25,000 additional support cost while Project management is changed over to new system. After deliverables (Approx. 100 hrs) Facilities $5,000 Office Equipment Equipment $50,000 IS upgrades to support Intranet construction $5,000 Phone , Fax, network services $10,000site licenses for various software products Software Tools Wrike 15 users 99/mo 1 year $1188.00
- 10. Other PMI Bootcamp to get the 3 project managers certified in 5 days 3885.00http://www.theknowledgeacademy.com/us/courses/pmp- certification/pmp-exam-prep-boot-camp/Sacramento/ Hotel located in Sacramento, CA $2502.00 for 6 nights for three rooms Signatures The goal of our project is to provide an effective project management office space, train individuals and provide an IT solution for the client, Galaxy. We’ve taken the goals and created a Work Breakdown Structure (WBS); breaking down the project into the following main areas and then subdivided them as accordingly. We have also included a chart that depicts how the project is broken down. Train Galaxies Project managers in PMP 1. Create Project Management Office (PMO) 1.1 Training and testing vouchers for three project managers to achieve their Project Management Professional (PMP) certification. 1.1.2. Train Project Manager One (PM1) 1.1.2.1. Cost out requirement 1.1.2.2 Set up and schedule time off and studying material 1.1.2.3 Set up and schedule the PMP certification boot camp 1.1.3. Train Project Manager One (PM2) 1.1.3.1. Cost out requirement 1.1.3.2 Set up and schedule time off and studying material 1.1.3.3 Set up and schedule the PMP certification boot camp 1.1.4. Train Project Manager One (PM3)
- 11. 1.1.4.1. Cost out requirement 1.1.4.2 Set up and schedule time off and studying material 1.1.4.3 Set up and schedule the PMP certification boot camp Analyze available options for office space and requirements to convert the space for functionality, co-locating three project managers. 1.2 Create Office Space at Galaxy Industries 1.2.1 Cost out office equipment and furniture 1.2.2. Order office equipment and furniture 1.2.3 Identify location at Galaxy for PM Office. 1.2.3.1 Clean out any existing fixtures/debris 1.2.3.2 Refurbish space: paint, walls, power, and network 1.2.3.4 Install new furnishings and equipment 1.2.3.4 Move PMs to new office location Create formal project management methodology that outlines policies and procedures 1.3 Create PMO Methodologies 1.3.1 Inspect Current "Legacy" Policies and Procedures 1.3.2 Test Methodologies with selected software 1.3.3 Compare performance with company requirements 1.3.4 Approve New methodologies in place of ""legacy"" policies and procedures" 1.3.5 Discontinue Legacy policies and procedures 1.3.6 Institute New PMP methodologies Develop or acquire project management software (i.e. MS Project) Develop a Project Management intranet site (i.e. MS SharePoint, etc.) allowing centralized data and information collaboration and retention 1.4 Create New Software
- 12. Solution 1.4.1 Software Requirements Decision 1.4.2 Software Requirements Approval 1.4.3 Purchase Software Obtain or create Information Technology (IT) solutions for project management functions. 1.5 Create New IS Infrastructure 1.5.1 Obtain quote for infrastructure from at least three different vendors 1.5.2 Schedule a site survey for chosen vendor 1.5.3 Schedule installation 1.5.4 Inspect Install and Test equipment 1.5.5 Install PMs IS equipment Train galaxies staff on new Project management Office Procedures and Methodologies and associate software 1.6 Train and Support Staff 1.6.1 Create roster for training 1.6.2 Create training plan 1.6.3 Create training schedule
- 13. 1.6.4 Training group 1 1.6.5 Follow-up group 1 1.6.6 Training group 2 1.6.7 Follow-up group 2 1.6.8 Training group 3 1.6.9 Follow-up group 3