Project Selection Chapter 3

1
Project SelectionChapter 3

• April 6, 2002
• Dr. Dale Masel

2
Steps in Selecting a Project

• Problem identified
• Screening
• Evaluation
• Prioritizing
• Portfolio analysis

3
Project Selection

• Project choice is affected by outside factors
• Competition
• Economy
• Politics
• Technology Repeat analysis as necessary when
  changes occur

4
Evaluation Considerations

• Cost
• Time to market
• Risk
• Effectiveness

5
Evaluation Checklist

• List important criteria
• Score each option as 1, 2, or 3
• Option with the most points wins

6
Evaluation Polar Graph

• Can see relative comparison of options

7
Evaluation Scoring Model

• Combines checklist with weighting factor
• Determining appropriate weights ? chapter 4

8
Evaluation Benefit-cost Ratio

• General formula
• Annual Benefits Cap. Recovery Op
  Maint. 
• Modified formula
• Annual Benefits Op Maint Capital
  Recovery

9
Evaluation Benefit-cost Ratio

• Types of Benefits
• Primary direct results
• Secondary marginal/hidden
• External outside scope of proj.
• Intangible Goodwill, reputation
• Often used for government projects
• Can be manipulated depending on whose point of
  view is used when making the calculations

10
Evaluation Cost Effectiveness

• Determine best use of limited
• Balance meeting the objectives of the project
  against the cost of doing so
• Score each option based on
• Efficiency
• Speed
• Availability
• Ease of use
• Reliability