Q1) At this point, what would you do if you were the project manager?
I would use the priority matrix to get the top management to make their priorities clearer
Time Performance Cost
Time – This is a really relevant factor because the color printer is a technology which a delay will cause competitors to come up with a similar low cost product, making the whole project worthless. This is Time to market.
Performance – it is critical to produce the product for reasonable quality. It is also important to provide value for money product unless it will not be successful in the long run
Cost – due to the fact that the estimate shows the cost has already increased than the senior management’s estimate where the attempts of cutting cost such as talking with design, marketing and production managers were not able to create a huge impact. So as time is crucial and performance is required, the only option we have is to accept the high cost.
Also I would schedule a meeting with senior managers to explain the priority matrix and gain the permission to increase the cost. At the same time take decisions to change the scope if necessary. Also find out whether outsourcing technology or producing within the company can reduce cost.
I’ll do the break even analysis with the new estimated cost to know whether we can get the maximum profit which we expect and would also go for one of the micro approaches “detailed estimates for the WBS work packages”. This will assess the risk associated with project time and cost, and encourage the use time phased budgets when they doing estimations
Finally, I would schedule a meeting with project team to explain the revised budget estimate and revised WBS and get their feedback. If the team is satisfied with the plan, I would continue with the project else abandon the project.
Q2). Was top management acting correctly in developing an estimate?
The top management was not correct in developing an estimate...