Week 6 Managing Project Trade-Offs

Tutorial
Slide 1:
The project Triangle
The Interrelationship of Time, Cost, and Scope

Slide 2:
The project Triangle
Every Project has some element of a time constraint (time), has some type of budget (cost), and requires
some amount of work to be completed (scope).

• Scope – Scope will sometimes be referred to as tasks and performance

• Time – Time is often referred to as schedule, duration, deadline, etc.
• Cost – Cost is often referred to as budget and includes resources such as materials, equipment,
and employees/workers.

If you adjust any one of these elements, the other two are affected. This is known as managing project
trade-offs

Slide 3:

Managing Project Trade-offs – Decreasing Time

For example, if you adjust the project plan to shorten the schedule, you might need to increase costs
and decrease scope.

Slide 4:

Decreasing Budget
If your budget is decreased…

1. You might need more time because you can’t pay for as many resources or for resources of the
same competency or efficiency.
2. If you can’t add more time, you might need to reduce the scope because you can’t do all of the
planned work with less money in the same timeframe.
Slide 5:

Increasing Scope
If the project scope is increased...

1. You may also have to increase your project duration because you cannot complete the
additional work in the same amount of time.
2. And/or increase project budget (cost) to cover the additional work.

Slide 6:

Project Quality
What does quality have to do with the project triangle?

Quality is at the center of the project triangle. Quality affects every side of the triangle, and any changes
you make to any side of the triangle are likely to affect quality. Quality is not a factor of the triangle; it is
a result of what you do with time, money, and scope.

Slide 7:
Managing Project Quality
There are many different scenarios that can affect project quality. For Example,

• If you find you have additional time in your schedule, you might be able to increase scope by
adding tasks and duration. With this extra time and scope, you can build a higher level of quality
into the project and its deliverables.
• If you need to cut costs to meet your budget, you might have to decrease scope by cutting tasks
or reducing task durations. With decreased scope, there might be fewer opportunities to
achieve a certain level of quality, so a lower quality results from the need to cut costs.

Slide 8:

Project Priority Matrix

A graphical tool to assist in making trade-off decisions.

Example: Development of a new high-speed modem

(Graph shows Time, Performance, and Cost along the X axis. Constrain, Enhance, and Accept are shown
along the Y axis.)

• Constrain and Performance – The original parameter is fixed

 • Enhance and Time– Which criterion should be optimized? In the case of time and cost, this
usually means taking advantage of opportunities to either reduce costs or shorten the schedule.
In the case of performance, enhancing means adding value.
• Accept and Cost – For which criterion is it tolerable not to meet the original parameters?

In this project, because time to market is important to sales, the project manager must try to reduce
(enhance) completion time. In doing so, going over budget (cost) is acceptable, although not desirable.
At the same time, performance (scope) specifications cannot be comprised (constrained).

Slide 9:

Case Scenario
Build living quarters over your garage for your mother-in-law within 90 days with a budget of
$75,000.00. The space will be 659 square feet with a bedroom, bathroom, kitchen/dining area, and
small living room. You are 45days into the project, and have spent $35,000.00. The electrical work took
longer than planned, so the scheduled completion dates is in danger. What are some of your options?
Your mother-in-law will be here with her moving truck in 45 days!

• Increase Time – This could be a viable option as long as you can rearrange some the remaining
tasks so that some of the non-critical tasks can be completed after 90 days.
• Decrease Time – Time is already a concern. Therefore, decreasing time is not really an option
without also increasing costs and decreasing scope.
• Increase Costs – Pay weekend rates for the contractors who still have work scheduled so that
they complete it faster and remain on schedule.
• Decrease Costs – Decreasing cost isn’t really a viable option because it would make it that much
more difficult to complete on time, and would require reducing scope. The two combined
changes would have a negative effect on the quality.
• Increase Scope – This would not be a recommended option because it would put the scheduled
completion date in more danger than it already is. It would also probably increase cost for the
project.
• Decrease Scope – This could be a viable option. However, It could require removing some of
the special features you were going to install so that there are fewer tasks left to be completed,
and those tasks can be completed within the remaining 45 days.

Slide 10:

Self-Check
Question:
If cost is more important than time to the project, the PM will allow the project to be later rather than
incur additional costs.
Answer:
TRUE is correct. The constraint in this situation is Cost – so it cannot change. Time is flexible.

Slide 11:
Self-Check
Question:
Sometimes project costs can be reduced by using cheaper, less efficient labor or materials that extends
the duration of the project.

Answer:
TRUE is correct. In this case, the PM traded off lower costs for increased time.

Slide 12:
Self-Check
Question:
Which of the following is not one of the basic classifications of project priorities?

A. Profit
B. Cost
C. Time
D. Performance
E. All of these are basic classifications

Answer:
A. Profit is not one of the basic classifications of project priorities