FINAL-TENDER-BID-DOCUMENT

FACULTY OF CHEMICAL & ENVIRONMENTAL ENGINEERING

J13 PRM (Project Management)

Module Convenor:

Prof. Chong Mei Fong

Group No:6

Names Student Id

Adnaan Abbas Malak 012117

Deeksha Kundun 011479

Shreyasi Hait 011582

Monalisa Roy 011736

Amran Khalfan Al Kitani 10261

Hasan Saeed Jasim Mohamed Jawad Alsalman 009996

1. Summary

The aim of this document is to deliver a proposal for the production of a Sunscreen chemical plant in

Malaysia with a cost of 326757 RM .The following proposal summarizes the five main cycles in any project.

The process starts with process selection in which a list of 20 ideas was brainstormed. These ideas were

then filtered to three candidates. The candidates are plastic; paint and sunscreen .They were then assessed

based on Benefit to cost ratio and scoring model. It was believed that Sunscreen was the best candidate to

satisfy the investor needs. The project was then initiated by identifying the possible stakeholders and their

expected responses to the product. The ultimate output from the initiation process was the process charter.

It includes the project objective statement, product statement, Major Deliverables, team rules and the

responsible team. The Six major deliverables are then granulated to Work packages (WPs). Each work

packages was assigned to a team member. The WPs Sequencing was then performed and the Critical path

was identified. The program evaluation and Review techniques (PERT) was then used to analyse the duration

of the critical path analysis. It was found that the project is having an estimated value of 536 days with 32

days standard deviation. This proves that the project cycle can be done in less than two year. Activity

scheduling was the last tool for planning the project. Cost baseline and scope baselines were used as

monitoring tools to control the project. The last phase is this document is the project closure where the

problem analysis was chosen to represent it.

2. Introduction

Malaysia is an equatorial country. It is one of Asia’s top tourist destinations complete with culture and

heritage and beautiful islands and sea beaches. The scorching heat and yearlong sunshine is one of

Malaysia’s special traits. This leads to the need and demand for sunscreen. So far in the market there is no

locally produced sunscreen. All the brands of sunscreen that are available are imported into the country and

so are naturally quite pricy. Also, of the sunscreens that are imported, majority of them are not herbal based

and are typically animal tested. As a result of this, there is a huge market for locally produced sunscreen

that is herbal and not tested on animals. Thus, the proposed idea to manufacture sunscreen locally in

Malaysia was heavily supported. It is therefore believed that the sunscreen product will bring a new income

to the country. Hence, a sunscreen production plant is to be set up to supply sunscreen to the market at a

rate of 1200 packages/day. This is expected to bring income into the country. Beside the new source of

income, the chemical product is believed to bring advancement in the technology. Lots of technologies are

currently under researches to further enhance the chemical structure of the sunscreen. The project is also

having a life cycle which is less than two years which satisfies the investor needs.

Certain requirements are needed to be met by the sunscreen product. It should be photo stable and have a

board range of UV protection. It should be also water resistance. In addition to that, it should not contain

toxic substances or highly hazardous ingredients. The product will be delivered to the market in various

types (i.e. spray, cream).different types will target different ages. This will maximize the Product usage.

These products will be supplied to the market by different means.

3. Project Selection: It is the first Criteria in Group management group processes.

A. Project Selection process:

Project A Project B Project C

Sunscreen Paints Plastics

B. Numerical Method

Discounted rate 8%

Project A Year 0 Year 1 Year 2 Total Comments

Discounted Costs 190000 4624856 4282274 9097129 NPBCR=2.2

Discounted Benefits 0 10544444 9763374 20307819

Cumulative benefits-cost -190000 5729589 11210690 11210690

Project B Year 0 Year 1 Year 2 Total NPBCR=1.8

Discounted Cost 190000 1174630 1087620 2452250


Cumulative benefits-cost -190000 886203.7 1882689 1882689

Project C Year 0 Year 1 Year 2 Total NPBCR=1.6

Discounted Cost 190000 5335152 4939956 10465108


Cumulative benefits-cost -190000 2991514 5937361 5937361

C. Non-Numerical method

Criteria Weight (%) Project A Project B Project C

Market attraction 30 90 60 75

Product can be readily improved 5 90 85 80

Can have a life cycle of 2 years 15 88 95 92

Realistic level of technology 5 85 80 83

Provide Positive NPV 20 80 80 80

Low risk in meeting scope, time and cost goals. 10 80 70 85

Meets environmental, health, safety and legal policies

15 70 60 30

Weighted Project Scores 100 83.45 72.5 73.45

Therefore, the project selection was based on the highest Net Present Benefit-cost ratio (NPBCR) and the highest

score. Sunscreen is the candidate that satisfies these two conditions

Brainstorming

(20 ideas)

Numerical

method

Non-Numerical

method

Ideas filtration Choose three

products

Common Sense

Feasibility

NBCR

Final decision

Scoring matrix

3. Project initiation

A. Stakeholders Analysis :

S1 S2 S3 S4 S5 S6 S7

Customers Accreditation

Bodies

Government

legislation bodies

Animal Rights

Organisations

Investors Suppliers Team Members

Questions for the Stakeholders:

Q1. What specific type of product is required?

Q2. What is the budget for the project?

Q3. What is the time constraints (schedule, payback period, ROI etc) associated with the project?

Q4. What is the quality grade for the sunscreen?

Q5. What is the testing procedure for the sunscreen? (Animal testing allowed? If yes to what degree?)

Q6. What is the technology to be used in production process?

Q7. Are the raw materials available?

Q8. What are the target group of customers? (monetary terms/ age groups)

Q9. What accreditations are to be obtained?

Predicted Answers from the stakeholders

S1 Q1. Herbal, No side-effects, long

lasting, good smell, non-greasy

Q2. NONE

Q3. None

Q4. Good Quality

Q5. Should not be on animals

(certain groups)

Q6. None

Q7. None

Q8. Age group of 15-55, reasonably

priced

Q9. Accredited by reputed acc.

Bodies

S2 Q1. Product that meets specified

requirements

Q2. None

Q3. None

Q4. Must meet quality standards

Q5. Lab conditions should meet

standards

Q6. None

Q7. None

Q8. None

Q9. Meets specified requirements

S3 Q1. Product that meets

government,

environmental & health

regulations

Q2. None

Q3. None

Q4. None

Q5. Within environmental &

health regulations

Q6. None

Q7. None

Q8. None

Q9. None

S4 Q10. None

Q11. None

Q12. None

Q13. None

Q14. Should not be tested on

animals. If tested, should be

ethical and humane

Q15. None

Q16. Not from animal origins

Q17. None

Q18. None

S5 Q1. Product that has market

demand in Malaysia and is

profitable

Q2. Less than 50M RM

Q3. Less than 2 years

Q4. Max. quality within budget

Q5. None

Q6. Efficient, cheap

Q7. Available in abundance and

close proximity to plant

Q8. Largest target; all consumer

Q9. groups

S6 Q1. None

Q2. None

Q3. None

Q4. None

Q5. None

Q6. Available, up-to-date but

not outdated

Q7. Within production &

selling capacity

Q8. None

Q9. None

S7 Q1. Product that is related to their field of expertise

Q2. None

Q3. None

Q4. Accreditation quality must be met

Q5. Done in a certified laboratory and within budget.

Q6. Feasible, cheap, available

Q7. Available in abundance and close proximity to

plant

Q8. All consumer groups

Q9. Product to meet accreditation requirements

B. Project Objective statement

C. Product Scope statements

D. Major Deliverables

E. PM and Core team

F. Team Rules

Create a project plan covering the manufacture of Sunscreen packages at a

rate of 1,200 packages per day within a budget of RM50 millions by

27/4/2017

MD1 MD2 MD3 MD4 MD5 MD6

Estimate Pre-Production Estimate Post-Production Manage the Production

Satisfy HSE(Health, safety and environment) requirements

Conduct Market Survey

Conduct Marketing tasks

IS IS NOT IS IS NOT IS IS NOT IS IS NOT IS IS NOT IS IS NOT

After site selection expensive

After production Before demand analysis

After production

Cover the process

Cover the process The most important part

External team task

Critical

An option

urgent When designing the product

More flexible and innovative Crucial for profit making.

Dependent on production pre and post costs

Features: SPF≥ 50/ Volume of Package: 75 mL / Application mode: Cream

Description: a specialized cream to protect the skin from UV radiation from the sun and enhances tanning IS IS /DOES NOT

Moisturizing Long-lasting effect ( about 8

hrs) Water resistance Suitable for all skin types Fragrant Liquid

Suitable for kids leave stains have side effects toxic Tested on animals Greasy

MD ID

Team member Core or extended Role

1 Adnan Core Engineer

2 Hasan Core PM(Project manager)+

3 Monalisa Roy Core Engineer

4 Deekshaa Extended Researcher

5 Amran Core Scientist( Researcher)

6 Shreyasi Hait Extended Promoter

1 All information is to be kept confidential

2 Compulsory weekly meetings are to be held.

3 All employees are to dress in a semi-formal manner.

4 Appraisals are to be conducted bi-annually.

5 Paid overtime is allowed provided it has been approved by manager.

6 A maximum of 3 month salary bonus annually will be given to employees depending on their performance.

7 All employees are to have a responsible and ethical behaviour.

4. Project planning

A. Work Breakout Structure (WBS)

B. WBS Dictionary

MD Code WP Name Responsible person

Completion criteria Output Precedence

1 1.1 Land and Construction cost ADNAN Get a legal clearance and calculate the construction details. Sign contract with the landlord and Cost report

4.3

1.2 Equipment cost and purchasing

ADNAN Estimate the equipment costs from process design. Cost report 3.1

1.3 Construction ADNAN Construction of the chemical plant Chemical plant 1.1,1.2

2 2.1 Product Testing Cost HASAN A full cost analysis for in-vivo an in-vetro testing. Cost report 5.1

2.2 Product packaging HASAN Estimate the packaging cost. Cost report 5.1

3 3.1 Product specification and process design

Monalisa Ensure that it meets the demand requirements. Finalize the Design that meet product specification

Specification sheet and PFD 4.1

3.2 Production Monalisa Manufacturing the product Product 1.3

4 4.1 Demand analysis Deekshaa Research on local and international demand Demand survey

4.2 Competition analysis Deekshaa Research on all possible competition locally and internationally Competition survey 4.1

4.3 Site selection Deekshaa Finding the best site available for the product with budget Site selection report. 4.1

5 5.1 Product Testing (quality) Amran Ensure that the product has desired quality and that the quality is maintained(quality control)

Chemicals used must be approved by the authorities.

3.2

5.2 Environment effect Amran Ensure the satisfaction of environmental indices. Environmental analysis report 3.2

6.1 Advertisement Planning and Costing

Shreyasi Strategise promotional and advertising agenda; estimate budget Detailed advertisement and promotion cost report

2.2,4.2

6 6.2 Advertisement and promotion Shreyasi Advertisement on all term of media and billboards. Market survey and sales report 6.1

6.3 Website service Shreyasi Creating and running the website. Commission Online website 2.2

C. Linear responsibility chart

D. Activity Sequencing

E. PERT analysis

Legend for linear responsibility chart

∆ Responsible for

Sign of authorisation Keep informed

MD WP Core Team Extended team

Hasan Adnan Monalisa Amran Sheryasi Deekshaa

1. 1.1 ∆

1.2 ∆

1.3 ∆

2 2.1 ∆

2.2 ∆

3 3.1 ∆

3.2 ∆

4 4.1 ∆

4.2 ∆

4.3 ∆

5 5.1 ∆

5.2 ∆

6 6.1 ∆

6.2 ∆

6.3 ∆

WP ID Optimistic Pessimistic Most likely

EV SD

1.1 50 80 70 68.33 5.00

1.2 30 90 60 60.00 10.00

1.3 200 365 240 254.17 27.50

2.1 20 50 30 31.67 5.00

2.2 30 35 40 37.50 0.83

3.1 30 80 50 51.67 8.33

3.2 1 2 1 1.17 0.17

4.1 30 60 45 45.00 5.00

4.2 15 30 20 20.83 2.50

4.3 30 45 35 35.83 2.50

5.1 15 30 20 20.83 2.50

5.2 30 90 75 70.00 10.00

6.1 7 21 14 14.00 2.33

6.2 30 80 50 51.67 8.33

6.3 8 20 15 14.67 2.00

4.1 3.1

4.2

4.3

1.2 1.3 3.2 5.1 2.2

1.1

2.1 5.2 6.3

6.1 6.2

20

45 50

35

60

70

30 75

240 40 20 1

14

15

50

F. Critical Path Analysis

G. Grant Chart for Activity scheduling

WP ID Optimistic Pessimistic Most likely

EV SD Variance CP EV’s CP Variance’s

4.1 30 60 45 45.0 5.0 25.0 45.0 25.0

3.1 30 80 50 51.7 8.3 69.4 51.7 69.4

1.2 30 90 60 60.0 10.0 100.0 60.0 100.0

1.3 200 365 240 254.2 27.5 756.3 254.2 756.3

3.2 1 2 1 1.2 0.2 0.0 1.2 0.0

5.1 15 30 20 20.8 2.5 6.3 20.8 6.3

2.2 30 35 40 37.5 0.8 0.7 37.5 0.7

6.1 7 21 14 14.0 2.3 5.4 14.0 5.4

6.2 30 80 50 51.7 8.3 69.4 51.7 69.4

What is the Expected Value(EV) of the Project 536

The Duration of the project with 95.5% confidence 32

H. Milestone definition

Milestone Number

WB Milestone Description Due Date Responsible person

1 1.1 Obtain land clearance 19/11/2015 Adnan

2 1.2 Procure all equipments 26/11/2015 Adnan

3 1.3 Complete plant construction 27/10/2016 Adnan

4 2.1 Cost report approval 6/1/2017 Hasan

5 2.2 Cost report approval 20/1/2017 Hasan

6 3.1 PFD Approval 3/9/2015 Monalisa

7 3.2 First batch of product 28/10/2016 Monalisa

8 4.1 Demand survey reviewed by stakeholders 25/6/2015 Deekshaa

9 4.2 Competition survey reviewed by stakeholders 23/7/2015 Deekshaa

10 4.3 Site selection approval report 13/8/2015 Deekshaa

11 5.1 Quality accreditation achieved 25/11/2016 Amran

12 5.2 Obtain manufacture permission 10/2/2017 Amran

13 6.1 Advertisement cost report is approved 9/2/2017 shreyasi

14 6.2 Profit is shown in sales report 20/4/2017 shreyasi

15 6.3 Website commissioning 10/2/2017 shreyasi

5. Project Monitoring and Control

A. Project Scope Baseline

B. Project Cost Baseline

6. Project Closure

A. Problem Analysis

WB Problem issue When occurred Root causes Resolution

1.1 Clearance to build is not obtained

Land procurement/lease

Protected land/agricultural land

Select industrial land

1.2 Under-estimation of cost Equipment pre-cost analysis

Wrong equipment design

Re-design the equipment

3.1 PFD was not approved Designing the process

Wrong design Re-design

3.2 Demand not met(Quantity) During Production Raw materials shortage

Find alternative suppliers

4.1 No demand of the product During Survey Existing product Change the product

4.2 No data Market survey Confidentiality issues Conduct field survey

4.3 Isolated site Site selection Non-availability of desired site

Look for other place

5.1 Product with low quality Testing the product Bad ingredients Procure top quality ingredients

5.2 Effect the marine life During testing Toxic Substance in ingredients.

Screen ingredients for toxic substances

6.3 Crashed website During operation Server problem Regular maintenance

7. Appendix

A. Sunscreen: The following information shows the costs of the sunscreen that are used to calculate the BCR and NPV of the

sunscreen product:

number of workers 50 workers

product manufacture 10 RM/unit

testing costs 14844 RM

labour cost 1000 RM/worker

selling price 26 RM/package

number of packages 50 package/hr

initial investment 190000 RM

If we assume that the project will be completed in year 0 with a discount factor of 0.08, the calculations that are

made to obtain the BCR, NPV and PBR are shown below:

Table 1: shows the BCR and NPV calculations

Year 0 Year 1 Year 2 Total

costs 190000 4994844 4994844

discount factor 1 0.925926 0.857339

discount cost 190000 4624856 4282274 9097129

Benefits 0 11388000 11388000

Discounted factor 1 0.925926 0.857339

Discounted benefits 0 10544444 9763374 20307819

Ft -190000 5919589 5481101 11210690

cumulative -190000 5729589 11210690

From the table above, the BCR, the NPV and the PBP are calculated and evaluated as follows:

B. Plastic: The following information shows the costs of the sunscreen that are used to calculate the BCR and NPV of the plastic

product:

No. of workers 50 RM

Labour costs 1500 RM

Initial investment 190000

product per unit 11 RM

Recycling equipment cost 36637 RM

Testing costs 7327.4 RM

packages produced/hr 50 packages/hr

Selling price 20 RM/package

recycled plastic profit 1 package/hr




0 1 2 TOTAL

costs 190000 5761964 5761964

discount factor 1 0.925926 0.857339

discount cost 190000 5335152 4939956 10465108

Benefits 0 9198000 9198000


Discounted benefits 0 8516667 7885802 16402469

Ft -190000 3181514 2945847 5937361

cumulative -190000 2991514 5937361

From the table above, the BCR, the NPV and the PBP are calculated and evaluated as follows:

C. Paint: The following information shows the costs of the sunscreen that are used to calculate the BCR and NPV of the plastic

product:

Furniture cost 15000 RM

Utilities cost 5000 RM

Safety equipment cost 2000 RM

Logo cost 800 RM

Website cost 3500 RM

Newspaper advertising cost 17000 RM

web developer cost 300 RM

number of workers 50 workers

labour cost 2000 RM

medical coverage and uniform cost 800 RM

initial investment cost 190000 RM

Packages produced 30 packages/hr

Selling price 9.25 RM/kg

Source 1: https://www.imoney.my/articles/the-cost-of-starting-a-business Source 2: http://www.alibaba.com/product-detail/Top-class-interior-paint_60194551582.html




0 1 2 TOTAL

costs 190000 1268600 1268600

discount factor 1 0.925925926 0.85733882

discount cost 190000 1174629.63 1087620.027 2452249.657

Benefits 0 2430900 2430900


Discounted benefits 0 2250833.333 2084104.938 4334938.272

Ft -190000 1076203.704 996484.9108 1882688.615

cumulative -190000 886203.7037 1882688.615

https://www.imoney.my/articles/the-cost-of-starting-a-business

http://www.alibaba.com/product-detail/Top-class-interior-paint_60194551582.html

D. Project Cost Baseline

WP Duration cost (RM)

1.1 70 30000

1.2 60 50000

1.3 240 80000

2.1 30 5000

2.2 40 5000

3.1 50 10000

3.2 1 900

4.1 45 3000

4.2 20 3000

4.3 35 5000

5.1 20 8000

5.2 75 6000

6.1 14 30000

6.2 50 40000

6.3 15 50000

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FINAL-TENDER-BID-DOCUMENT