Peter Pan and Mary Bowl are in partnership running a restaurant in Stratford, London, for five years now. The business serves corporate customers from abroad and even though, the recession, Brexit and political instability in UK has not favoured that sector of business as expected, they made 1 million profit last year, raising the partner’s capital base to 2.5 million. As part of their long term strategy to be a great player in the hospitality sector they have planned to invest in a 5 star hotel and a swimming pool to serve both the local community and business customers from abroad. They have already had a chat with their bank manager who is willing to provide them with a loan of £2.5 million pounds at an interest rate of 8% (a figure that they use as their discount rate) to finance the projects.
The firm already have 31 staffs including the 2 owners who are all managers, receiving salaries based on the number of hours worked. The other departments are finance (3 staffs), Marketing (3) Kitchen and cleaning (9), human resources (3staffs), operation managers (1 staff), cooks (4) and waitresses (6).
Some of the staff have heard from the grape vine that a new project would be undertaken sooner than later and have asked the project manager to explain what project management is, why and how the discipline has become so popular of late. Others are interested in the planning, implementation and the principles guiding the discipline. With no hesitation the project manager has promised to deliver seminars on these issues.
Just as they were about to start the project, Peter met his school mate (Django) who is a management consultant specialising in hotels. He discussed the proposed project with him. Django suggested that , it was worth investing in such a project, however, they would make more money, if they sell the hotel and swimming pool after 5 years, instead of holding on to it. His believe is that they should realise returns as soon as possible so to reinvest in other good opportunities.
The cash flow estimated by the consultant for the projects if it is to last for 5 years are as stated below:
Hotel Swimming Pool
Year 0 (4,000,000 ) (2,000,000)
1 600,000 200,000
2 600 ,000 200,000
3 1,600 000 400,000
4 1,600,000 400,000
5 1,600, 000 400,000
Mary has discussed this with the finance manager who has vehemently disagreed with the analysis of the Management consultant. According to the financial manager so many internal and external factors have been overlooked by the management accountant. For instance, the company’s Information communication and technology systems has been improved recently to make it easy for customers to access their websites; their expenses on advertisement has increased by 3%, the brand has become popular nation-wide; Taxes are falling; all of which were not taken into consideration by the management consultant.
Assuming you are the operations manager,
1.1 Describe the background (History) and principles of project management.
1.2 Appraise the viability of the investment in the hotel, taking into consideration the suggestion of the consultant and develop a success and failure criteria.
1.3 Explain the principles behind project management systems and procedures.
1.4 Explain the key elements involved in terminating the above project and conducting post-project appraisals.
To achieve M1 demonstrate the ability of identifying the right solution for project management challenges through evidences of extensive research and practical applications.
To achieve D3 demonstrate that innovative and creative thoughts have been applied in developing the project management system and procedure which includes effective success and failure criteria and the review process.
AC 2.1 Identify the most appropriate organizational structure, roles and responsibilities of participants of the above-mentioned project (Hotel)
AC 2.2 Explain how one can control and co-ordinate the project taking into consideration the companies’ structure and activities.
AC 2.3 Assess the leadership style and qualities required to manage the above project successfully.
AC 2. 4 Plan and specify human resources requirements for the proposed project.
To achieve M3 demonstrate the use of right business terminology and principles in planning human resources needs and present the organizational chart professionally, coherently, and logically.
To achieve D1 demonstrate that a definite conclusion has been made in planning human resources needs through detailed analysis of roles and position to develop the organizational structures suitable in the given business context.
AC 3.1 Prepare a detailed project plan for the proposed project, clearly establishing each component in the effective organization of the project.
AC 3.2 Apply the appropriate project scheduling tools to plan the project activities to minimise the time and costs of the project.
AC 3.3 Analyse the methods used to measure project performance (You may use this case for your analysis)
AC 3.4 Explain the change control procedure for evaluating your project at its completion.
To achieve M2 demonstrate the ability to read and understand the case study and use a range of project scheduling tools.
To achieve D2 present well articulate WBS, well presented PERT or GANNT chart used to plan and manage the project activities to a successful end.
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