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Abi Case Study from Project Management

Autor:   •  March 18, 2011  •  Essay  •  403 Words (2 Pages)  •  2,636 Views

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Abi Case Study From Project Management, A Mangerial Approach

1. How did ABI handle forecast risk?

• By following their business strategy guidelines:

o Long term margins, long term technical abilities position, advanced technology, utilize project champions, keep plants under 480 employees

• Long term variability in purchased equipment.

• Investing versus non investing comparisons.

• Maximizing flexibility while minimizing exposure.

2. Were ABI's Stanhope site costs in Table 2 derived by a top-down or bottom-up process? Why?

• Top down

o The cost estimates include past data based on similar activities

o Individual elements are lacking in each task, but the overall estimates are adequately developed to account for the entire project task

3. What are the answers to Steve White's questions?

A. "Won't this investment simply dilute current ROI?"

• Yes because of the $7.1 million investment for the project that will be depreciated

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over the 8 year life. Total company ROI will be negative for the first several years because of the startup costs and working capital required for the Stanhope project.

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