Wireless network implementation for vehicle-mounted PDAs at airports

Project Management

Scenario

A global consumer electronics company is interested in expanding its business by developing vehicle-mounted PDAs (Personal Digital Assistant). The vehicle-mounted PDA is the compact computer terminals that can be used to be mounted on field service vehicles, forklifts, transport vehicle and construction truck. Organizations also use Vehicle-mounted PDAs for many purpose including logistics, industrial monitoring and control, warehouse vehicles and for roadside assistance. Employees also use the PDA communicates progress of business transaction with the information systems as well as recording organizational business transactions. Meanwhile, PDA serves double purpose for assessing databases for services and for the application purpose by which a field's service engineer uses PDA for fixing equipment at the customer site. For effective application purpose, Vehicle-mounted PDAs may possess wireless connectivity such as a wireless LAN interface, Bluetooth, and mobile or cellular connectivity.

Project Objective

The objective of the project is to plan the development and installation of a wireless network to support PDA operation for an airport application -- (John Kennedy Airport application).

To enhance greater understanding of the proposed PDA, the project defines the wireless and the proposed PDA to be used at an airport.

Proposed PDA and Wireless Network

The proposed PDA for the airport wireless application will be Cisco Aironet 3600 Cisco. The Cisco Aironet 3600 Series Access is designed to provide the best performances. By allowing the optimal network performances, Cisco Aironet 3600 provides multiple-input multiple-output (MIMO) designed with four transceiver 802.11n. The Cisco Aironet 3600 Series offers high capacity, versatility and enterprises-class features that are adapted with wireless LAN as well as supporting 802.11n wireless standard.

A unit priced for a Cisco Aironet 3600 is £1,100. The price is proposed for £1,100 because the Cisco 3600 series boost performances at the range 802.11n and 802.11a/g devices. Typically, the Cisco Aironet 3600 assists PDA to scan airport baggage via the wireless LAN. The technology offers network infrastructure with switching technology and network routing which assist airport to offer passengers with business speed.

The proposal provides the project feasibility and management to identify the stakeholders for the airport-based project.

"Part a -- Project Feasibility and Management (Q1). Identify the various stakeholders for the airport-based project and examine their likely viewpoints and concerns by conducting a Force-field analysis."

The stakeholders for the airport-based project are management of a global consumer electronic company, airport management, airport employee, airport customers, PDA producer, and project manager. Using a Force-field analysis, the proposal examines the likely viewpoint and concern of the stakeholders.

Fig 1: Force-Field Analysis for the Stakeholders

The Force-Field analysis has been able to determine the viability of the project. With the identification of the stakeholders, it is revealed that the management of the Global Consumer Electronic Company believes that the new project is likely to improve the productivity of the sales of the company as well as increasing the company revenue. Employee of the Global Consumer also believes that the new technology will increase the company productivity and this make the company to increase their salary. However, the new technology will make employees of the airport to be frighten on the ground that the new technology might lead to the laid off on non-it workers or non-technical workers. On the other had the project manager and the PDA producer will like the project to start because they are likely derive financial benefits from the project. Based on the project analysis using Force-Field analysis, it is revealed that the project is likely to viable because only a stakeholder is likely to oppose the project.

Q2). "The firm will invest £5 Million in Year 0 to develop the product and expect Sales

during Years 1 -- 4. Fixed costs are to be £7 Million annually (not negotiable) and the items comprising the variable costs should be identified and discussed. Assumptions are to be clearly stated."

Meanwhile, the sale forecast and the project cash flow are critical to determine the feasibility of the project. Thus, the project cash flow is provided in Table 1.

Table 1: Project Cash Flow

Pro Forma Cash Flow

Year 0

Year 1

Year 2

Year 3

Year 4

Cash Received

Cash from Operations

Cash Sales

£2,700,000

£2,975,750

£4,036,250

£5,923,063

£6,923,063

Cash from Receivables

£2.300,000

£2,745,583

£3,786,092

£3,713,875

£4,813,875

Subtotal Cash from Operations

£5,000,000

£6,721,333

$7,822,342

£9,636,938

£11,736,938

Additional Cash Received

Sales Tax, VAT, HST/GST Received

£0

£0

£0

£0

£0

New Current Borrowing

£0

£0

£0

£0

£0

New Other Liabilities (interest-free)

£0

£0

£0

£0

£0

New Long-term Liabilities

£0

£0

£0

£0

£0

Sales of Other Current Assets

£0

£0

£0

£0

£0

Sales of Long-term Assets

£0

£0

£0

£0

£0

New Investment Received

£0

£0

£0

£0

Subtotal Cash Received

£5,000,000

£6,721,333

£7,822,342

£9,636,938

£11,736,938

Expenditures

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending

£125,000

£215,000

£570,000

£755,000

Bill Payments

£850,000

£1,648,592

£3,071,925

£4,134,180

Subtotal Spent on Operations

£957,000

£1,863,592

£3,641,925

£4,889,180

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

£0

£0

$0

£0

Principal Repayment of Current Borrowing

£0

£0

£0

£0

Other Liabilities Principal Repayment

£0

£0

£0

£0

Long-term Liabilities Principal Repayment

£0

£0

£0

£0

Purchase Other Current Assets

£0

£0

£0

£0

Purchase Long-term Assets

£0

£0

£0

£0

Dividends

£35,000

£50,000

£75,000

£225,000

£350,000

Subtotal Cash Spent

£992,000

£1,913,592

£3,716,925

£5,114,180

£6,114,180

Net Cash Flow

£550,000

(£692,259)

£705,417

£922,758

£1,522,758

Cash Balance

£125,021

£157,041

£262,458

£785,216

£1, 585,216

The sales forecast for the project is as follows.

Table 2: Sales Forecast

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales

£1,951,500

£4,072,500

£5,846,125

Direct Cost of Sales

£975,750

£1,995,525

£2,747,679

Other Costs of Goods

$0

$0

$0

Total Cost of Sales

£975,750

£1,995,525

£2,747,679

Gross Margin

£975,750

£2,076,975

£3,098,446

Gross Margin %

50.00%

51.00%

53.00%

Expenses

Payroll

£215,000

£570,000

£755,000

Sales and Marketing and Other Expenses

£216,000

£200,000

£250,000

Depreciation

$0

$0

$0

Advertising & Marketing Collateral

£295,000

£350,000

£425,000

Industrial Design

£64,284

£75,000

£80,000

Rent

£22,800

£26,000

£30,000

Telephone

£7,500

£10,000

£15,000

Utilities

$14,400

$18,000

£20,000

Insurance

£6,000

£7,500

£7,500

Payroll Taxes

£50,200

£85,500

£113,250

Company Vehicles and related expenses

£16,800

£18,000

£19,000

Trade Shows & Events

£30,000

£0

£0

Total Operating Expenses

£937,984

£1,360,000

£1,714,750

Profit Before Interest and Taxes

£37,766

£716,975

£1,383,696

EBITDA

£37,766

£716,975

£1,383,696

Interest Expense

£0

£0

£0

Taxes Incurred

£11,330

£215,093

£415,109

Net Profit

£26,436

£501,883

£968,587

Net Profit/Sales

1.35%

12.32%

16.57%

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

Assets

Current Assets

Cash

£157,041

£262,458

£785,216

Accounts Receivable

£230,167

£480,325

£689,512

Inventory

£130,900

£267,706

£368,610

Other Current Assets

£0

£0

£0

Total Current Assets

£518,108

£1,010,489

£1,843,338

Long-term Assets

Long-term Assets

£0

£0

£0

Accumulated Depreciation

£0

£0

£0

Total Long-term Assets

£0

£0

£0

Total Assets

£518,108

£1,010,489

£1,843,338

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities

Accounts Payable

£192,371

£257,870

£347,132

Current Borrowing

£0

£0

£0

Other Current Liabilities

£0

£0

£0

Subtotal Current Liabilities

£192,371

£257,870

£347,132

Long-term Liabilities

$0

$0

$0

Total Liabilities

£192,371

£257,870

£347,132

Paid-in Capital

£450,000

£450,000

£450,000

Retained Earnings

(£150,700)

(£199,264)

£77,619

Earnings

£26,436

£501,883

£968,587

Total Capital

£325,736

£752,619

£1,496,206

Total Liabilities and Capital

£518,108

£1,010,489

£1,843,338

Net Worth

£325,736

£752,619

£1,496,206

By calculating the payback period for the project, the proposal divide the initial investment by the annual cash flow. In the PDA Investment, the global electronic company will have a payback as follows:

Formula for Payback period: Initial Investment / Annual cash flow

Initial investment= £5,000,000

Annual cash flow = £3,716,925

Payback period is 1.35 years

Based on the calculation the payback period for the PDA project is 1.35 years. Based on the cash flow for the project, the project is likely to be acceptable by senior management on the ground that the payback period is 1.35 years.

Q3). Evaluation of the two forecasts prepared is as follows:

b. To calculate the potential value of the project using Net Present Value (NPV) and the Internal Rate of Returns. The proposal uses the project cost of capital, which is 7%. Typically, NPV calculates the present value of the project cash inflows and the project cash outflows. The basic principle of NPV is to calculate whether the present value of the project inflows is greater than the present value of project cash outflows.

Based on the previous calculation, the net cash flows for the investment is as follows

Year 0

Year 1

Year 2

Year 3

Year 4

Net Cash Flow

£550,000

£692,259

£705,417

£922,758

£1,522,758

With 7% discounted cost of capital, the NPV for the project is calculated as follows:

NPV: 550,000+(0.952 X 692,259)+ (0.890X 705,417)+(0.840 X 922.751) +(0.792XX 1,522,758).

550,000+659,021+627821+775110+1206024

Project Completion

For the project manager, allocation of limited resources is very critical in a project. Allocate of scare resource is very critical when the resource is too large to accommodate. With extreme demand for labor during the project lifecycle, there are fluctuations in the labor required to complete the project.

ABLE 10-15 Resources Required and Starting Times for a Nine Activity Project

Activity

Workers Required

Equipment Required

Earliest Start Time

Latest Start Time

Duration

A

B

C

D

E

F

G

H

I

2

2

2

2

2

2

2

2

4

0

1

1

1

1

0

1

1

1

0

0

4

4

12

12

21

21

24

0

9

4

15

13

12

22

25

24

4

3

8

7

9

12

2

5

6

100% Revised Early Start Schedule

Original Early Start Schedule

80% Revised Early Late

Schedule Original Late Early Schedule

60% Current State

40%

20%

0%

c) "What specific rules could be adopted to decide how to schedule this project and what constraints must be taken into account."

The rule to adopt to schedule the project is to efficiently allocate the resources to achieve early start schedule. Given the limited resource, the constraint to be taken into account is the resource requirement, which is required to avoid extreme fluctuation in the labor demand. The resources constraints could lead to high costs of labor training, transportation, hiring and management. Additional constraint is that there is much difficult in presenting the project network diagram, and too much information is often presented which could be high as 500 activities. The problem of displaying numerous activities is identification of activities such as number resources to be added to the diagram.

Q7). a) "Find the expected time of the project using PERT. What is the probability of completion within the expected time"?

The expected time of the project using PERT is calculated using weighted average and the results gives Time Expected (Te).

a m m

Te

A

2

4

6

4

B

4

6

8

6

C

2

3

4

3

D

0.5

1

4

1.83

E

2

3

4

3

F

1

3

5

3

G

1

2

3

1

H

2

3

4

3

I

1

2

3

2

J

0.5

1

3

1.5

K

0.5

1

3

1.5

L

1

3

5

3

The probability of completing the project within the expected time is as follows:

4+6+3+1.83+3+3+1+3+2+1.5+1.5+3/12

32.83/12=2.73

The probability of completing the expected project before the expected time is

1.46 which is greater than 1. When using probability analysis, the care than needs to be taken care of order of magnitude.

Q8). "Find the minimum cost increase to reduce the expected duration of the project by 2

Weeks."

Activity

Minimum Cost

Normal Duration

Crash Cost

Crash Duration

Change in Cost per Day

A

B

C

D

E

F

G

8

4

8

10

10

20

10

6

1

8

5

9

12

3

14

4

24

24

18

36

18

4

1

4

3

5

6

2

3

4

7

2

2.7

8

Q9). "The Company assessed the costs of the project at important milestones at the outset as shown in Table B2. After some weeks, the project manager asked the task supervisors for progress reports and the feedback shown in Table B2 was reported."

a) What is the cost variance for the project so far?

Cost Variance= Earned Value -- Actual Cost

Activity

Budget Cost (£)

Cost to Date

Cost variance

A

B

54000

57000

-3000

C

D

E

-200

F

G

2000

H

0

I

2000

J

0

K

0

L

0

b) schedule variance.

Activity

% Complete

% Planned

Schedule Variance

A

0

B

0

C

95

-5

D

0

E

25

-75

F

0

G

10

20

-10

H

0

0

0

I

50

0

-50

J

0

0

0

K

0

0

0

L

0

0

0

c) Provide your clear comments on the progress of the project.

Based on the cost variance and the schedule variance, there is significant improvement in the project. The project is ahead of schedule and over budget.

b)

y+2x = 7.45

y-x =1.75

y=1.75+x

1.75+X+2x = 7.45

1.75+3X=7.45

3X=7.45+1.75=5.70

X=1.90

y-1.90 =1.75

Y= -0.15

X=1.90X900= 1710

Y=-60

The minimum cost is 1710-(-60)

=1710+60=1770/2

Minimum cost=£885

Minimum cost corresponding to the optimal values of the decision variables is £885.