Question

1. You are the manager of a small resort in Central Queensland. The owners want to change the focus of the resort from a family destination to an eco-tourism resort. The following projects have been identified for the resort. Classify each one as compliance, strategic or operational and give your reason for each classification.                                                                        

• Test and revise cyclone response plan
• Introduce wireless Internet service in café and lounge areas
• Redecorate and update the cabins
• Change all the resort brochures to reflect the eco-tourism image

2. You are the project manager of a bathroom renovation project. You are managing a team of tradespeople. The work has commenced, but the customer has just heard about a new method for covering drains when tiling the floor that is much more aesthetically pleasing than just having an old fashioned metal drain. The customer asks if you can do this instead. How wouldyourespond to this request? Explain why you responded in this way.                     (2marks)

3. Using an example, explain what is meant by a “sunk cost” and explain why it is difficult for people to ignore sunk costs. Should they ignore sunk costs? Explain.                                                                                       

4. You have added the resource requirements to your project schedule and have decided that you should try resource levelling.
   1. What is resource levelling and how do you perform resource levelling?
   2. Why would you want to perform resource levelling (what are the circumstances)?
   3. What is the impact of resource levelling and what are the risks associated with it?

Answer 1

1Test and revise cyclone response plan- Compliance since every hotel by law must have a contingency plan for evacuation in case of emergencies.

Introduce wireless Internet service in café and lounge areas- Operational since internet is a must have now.

Redecorate and update the cabins- Operational since this is part of organizations yearly action plan.

Change all the resort brochures to reflect the eco-tourism image- A strategic shift to associate the hotel with ecosystem and sustainability tourism.

2)I would like to experiment with the new style since the bathroom drain is not a place where hotels look into. Also, the negative effects if any will be minimum since the guest wont be much concerned about that.Therefore, the probability that it will please the guest is more if succeeded than the probability that the guest will be displeased about it.

3)Sunk costs are the costs which are already spent by an organization and cannot be recovered .Therefore they are sunk. For eg. Rent paid by the hotel for a land lease is a sunk cost which cannot be recovered even if the lease does not give returns. Sunk costs should not be ignored as they are real costs and they affect the cash flow of the business since cash is gone out without any returns in immediate future.

4)Resource levelling is the process of properly allocating the reosurces in case the workload is a lot more for the current resources allocated . Resource levelling overcomes this problem of manpower constraints and provides solution to allocate manpower efficiently. Resource levelling can be done by the critical path method, crashing a project or fast tracking activities.

I would perform resource levelling if the resources provided are not adequate for the activities workload to be performed.

The impact of resource levelling are that some activities might have to be done parallely. Risks are that some activities might get delayed,resource might get caught up in other tasts, project delays might occur. it can extend the timeline of non critical activities.