Discussion:
Problems and Exercises
1. What are some sources of risk in a systems analysis and design project, and how does a projectmanager cope with risk during the stages of project management?
2. Suppose that you have been contracted by ajewelry store to manage a project to create anew inventory tracking system. Describe your initial approach to the project. Whatshould your first activity be? What informationwould you need? To whom might you need tospeak?
3. The economic analysis carried out during project identification and selection is rather superficial. Why is this? Consequently, what factorsdo you think tend to be most important for a potential project to survive this first phase of thelife cycle?
4. Assuming monetary benefits of an informationsystem at $85,000 per year, one-time costs of$75,000, recurring costs of $35,000 per year, adiscount rate of 12 percent, and a five-yeartime horizon, calculate the net present value ofthese costs and benefits of an information system. Also calculate the overall return on investment of the project and then present abreak-even analysis. At what point does breakeven occur?