Page 50 - DMGT521_PROJECT_MANAGEMENT

Unit 3: Strategic Management and Project Selection

Product Line Extension: In this case, a project to develop and distribute new products would be Notes
judged on the degree to which it fits the firm’s existing product line, fills a gap, strengthens a
weak link, or extends the line in a new, desirable direction.
Profitability Index: It is the net present value of all future expected cash flows divided by the
initial cash investment.

3.8 Review Questions

1. Describe about strategic management and project selection.
2. Explain about project selection and criteria.
3. Which method is a better model: discounted cash flow model or IRR? Explain, why?

4. Describe what Project Selection Models are?
5. What do you know about “The Sacred Cow”?
6. Explain about the product line extension.
7. Discuss about analysis under certainty.
8. List and explain the numeric models of project selection.

9. Explain the non-numeric models of project selection.

Answers: Self Assessment

1. Capital 2. Business Goals
3. Realism 4. Viable
5. Cost-Benefit 6. 2

7. Evaluating 8. Implemented
9. False 10. True
11. True 12. False

3.9 Further Readings

Books Clements/Gido, Effective Project Management, Thomson
Clifford F. Gray and Erik W. Larson, Project Management, Tata McGraw Hill

Dennis Lock, Project Management, Ninth Edition, Gower
K. Nagarajan, Project Management, Third Edition, New Age International
P.C.K. Rao, Project Management and Control, Sultan Chand & Sons
Prasanna Chandra, Projects – Planning, Selection, Financing, Implementation, and
Review, Sixth Edition, Tata McGraw Hill
Vasant Desai, Project Management, Second Revised Edition, Himalaya Publishing
House

LOVELY PROFESSIONAL UNIVERSITY 45