Risk Management – Module 4 1. Review the attached document related to Project Description & Customer Documentation
2. Identify 3 Risks that will have impact on the project and explain with the following details:
a) Describe the Risk using the Cause –> Risk –> Impact Syntax
b) Risk Category (Example: Cost, Schedule, Scope, Technical, Quality, Budget etc.)
c) Probability of Impact (Using a scale such as 0, 1, 2 etc. 0: Low Impact, 1: Medium Impact, 2: Highest Impact)
d) Probability of Occurrence (Using a scale such as 0, 1 etc. 0: Low Occu., 1: Medium Occu., 2: Highest Occu.)
e) Triggers that Cause the Risk
f) Strategy (Example: Transfer, Mitigate etc.)
g) Mitigation Response and Owner (Example: Engineer, Production, Project Manager etc.)
h) Risk Severity Matrix Including Graphical Representation
It is strongly recommended that you perform a qualitative risk analysis to determine the probability of occurrence and impact to the project. Once you have done that, place the risks in the risk severity matrix to see where the risks lie in the matrix.
3. Identify 3 Opportunities that will have impact on the project and explain in brief.
Submit the Assignment in a Excel format so that Risk Severity Index represent the Graph as well. Project Description & Customer Documentation
1. Start by reading the “Memo from the President”:
From: President, DesignAll Limited
To: (Add your name)
Subject: WIDGET PRO Pizza Box Folding System
The Marketing Department has completed a business case analysis on the possibility of selling a pizza
box folding system, named the WIDGET PRO. The business case analysis indicates 20% of the 3,500
independent pizza shops in New England would purchase a unit that automatically folds pizza boxes.
That represents a total of 700 independent pizza shops. An initial low-rate production of 400 units will
be manufactured to test the market.
I want a project, named the WIDGET PRO Project, started immediately that will design, test,
manufacture, and sell the WIDGET PRO system. The objective of the project is to design, build a
prototype WIDGET PRO, and test it to ensure it meets all product and project requirements through
testing. Since our manufacturing department is too small to produce 400 units without substantial
investment, the project will need to outsource the manufacturing of the WIDGET PRO to the most
qualified company at a reasonable cost.
I want the project to commence 7 January 2019, with 400 WIDGET PROs ready for sale in no more
than 18 months (30 Jun 2020). I want your planning team to develop all documentation to establish a
Scope Baseline, a Schedule Baseline, and a Cost Baseline.
My goals for this project are:
Sell 400 units within the first four months of sales, starting no later than 1 March 2020.
Invest no more than $1 million on this project through the sale of the 400 units.
I have confidence that your project management ability and skills will provide the leadership necessary
to successfully achieve my goals.
Ron Lachance, PMP
President, DesignAll Limited
2. The President had the Marketing Department perform a Business Case Analysis to determine if
the project will bring value to the company. Read the Business Case Analysis to get more
information about the WIDGET PRO Project.
BUSINESS CASE ANALYSIS
The American Pizza Community is a coalition comprised of the nation’s largest pizza companies,
regional chains, small business franchise owners, suppliers, and other entities that make up the
American pizza industry. The coalition was formed to advocate for policies affecting pizza companies
and operators of all sizes and to support programs that allow the industry to grow and create jobs.
The President of DesignAll Limited requested the Marketing Department to perform a market analysis
for all pizza shops within the New England areas on the possibility of selling units that can
automatically fold pizza boxes. The first step taken was to identify companies that currently produce
pizza box folding units. The research indicated that, to date, there are no companies that manufacture
and distribute a pizza box folder unit. There is a strong possibility that the company could corner the
marketplace for 10 years with a patent. If successful, the economic growth for the company could be
large for some time, especially if the company goes national, and further, global.
Marketing surveyed 130 pizza shops within key districts across New England. The result showed that
35% of the surveyed pizza shops indicated that manually folding pizza boxes puts a strain on time lost
making pizza or adds additional cost to have an employee solely fold pizza boxes. When asked if they
would consider purchasing a pizza box folding unit, 20% of the surveyed pizza shops indicated they
would consider it, dependent on the price of the unit.
There are 3,500 pizza shops in the New England area, according to the American Pizza Community
2016 report. Assuming 20% of all pizza shops purchased the unit, this equates to 700 shops. A pricing
analysis will be performed when initial investment and manufacturing unit costs are calculated.
The sponsor of the market analysis is Mr. Ron Lachance, President, DesignAll Limited. Mr. Lachance
has requested that a project be planned to further determine if the pizza box folder unit could be
designed, tested, and 400 units produced in 18 months. Mr. Lachance has indicated the company will
invest no more than $1 million on this project. The project name will be the WIDGET PRO Pizza Box
Folding Unit (a.k.a. WIDGET PRO Project).
Since 2014 DesignAll Limited has seen either a flat or a small positive growth in engineering projects.
Sales have been from $28 million in 2014 to $28.8 million in 2016. This represents a growth of 2.8%.
The WIDGET PRO Project must design, develop, test, and contract to produce 400 units for no more
than $1 million. The unit needs to be able to fold 50 boxes in no more than four minutes. This equates
to five seconds per box.
A STRONG DEMAND could result in 20% of all pizza shops in the New England area purchasing the
WIDGET PRO. This would result in 700 units being sold. At an estimated price of $3,500, total sales
would equate to $2.45 million. With an initial investment of $1 million, this equates to a 145% return on
investment in the first year.
A WEAK DEMAND could result in 10% of the pizza shops in the New England area purchasing the
WIDGET PRO. This would result in 350 units being sold. At an estimated price of $3,500, total sales
would equate to $1.23 million, or 23% return on investment in the first year.
A good marketing and advertising campaign could achieve the strong-demand scenario. DesignAll
representatives will visit all pizza shops in New England and emphasize WIDGET PRO’s low cost,
small size, reliability, and responsive customer service.
3. The President had a few engineers who were used as consultants when the business case
analysis was performed. He asked these engineers if they could generate a statement of work so
the project team could define the project scope and the product scope WIDGET PRO.
WIDGET PRO Project
Pizza Box Folder Unit
(a.k.a. WIDGET PRO Project)
STATEMENT OF WORK
The WIDGET PRO Project will design, build, test, and contract to produce 400 units of
the WIDGET PRO.
DESIGN OF WIDGET PRO
2.1.1 The WIDGET PRO design will focus on size, speed, reliability, and ease of
2.1.2 WIDGET PRO will be no taller than 4 inches, no wider than 20 inches, and no longer than 44
inches, with 20 inches reserved for the pizza box bin and 24 inches reserved for the main housing.
2.1.3 The pizza box bin will hold up to 50 unfolded pizza boxes, and will take
no more than four minutes to fold all 50 boxes. This equates to five seconds per box.
2.1.4 The main housing of the unit will contain the motor, platform chain,
electronics, folding widgets, and the control panel that contains the
on/off switch, count button, and count display.
2.1.5 The count display will also display error messages when there are
failures to the unit. The error messages will be in plain English and easy
for the operator to understand.
2.1.6 The front of the unit will contain the pizza box platform that will hold the
folded pizza boxes, the folding arms, and the flat box stabilizer arm.
A prototype unit will be built and subjected to environmental testing and acceptance testing.
Below is the initial drawing of the WIDGET PRO.
The WIDGET PRO will go through an environmental test under high temperature, operation
with dust, crumbs, and flour in the environment, and no-load operation.
The WIDGET PRO will be subjected to an acceptance testing where the unit will operate
uninterrupted for 48 hours under normal operating environment and procedures.
NOTE: An individual will need to be present during the entire acceptance testing to load
unfolded pizza boxes into the WIDGET PRO.
A limited initial production of 400 units will be manufactured for this project.
Because DesignAll Limited has a small manufacturing department and is unable to produce the
WIDGET PRO, the WIDGET PRO Project will outsource the manufacturing to a subcontractor
currently on the DesignAll Qualified Subcontractor List.
The project will develop procurement documentation to submit to qualified subcontractors so
they can develop a responsive proposal.
The project will evaluate all responsive proposals and select the subcontractor that offers the
best value to the project.
The project manager will be responsible for performance and progress of the selected
The Marketing Department is responsible to expand the market analysis beyond the New
England area, and develop a marketing plan for the entire United States. The marketing plan will be
completed 120 days after the start of the project.
The Marketing Department will be responsible to design and launch a WIDGET PRO websi
The Marketing Department will be responsible to market the WIDGET PRO throughout the New
England area via telephone, e-mail, and site visits.
The Marketing Department will be responsible to manage the subcontractor deliveries of the
WIDGET PRO to the appropriate pizza shops within 21 days of order placement.
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