Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out more
about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to the
increased marketing activities of its competitors. 10% of customers have not re-ordered in this
financial year and staff morale is poor. A number of skilled staff have left as a result and
replacement staff have not been recruited due to the reduced operation. If the project is
successful, a recruitment campaign will be required to fill the existing staff vacancies and there
may be a requirement for additional staff. Operational costs are likely to increase because skilled
staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional calendar to
our current and prospective customers would increase orders by at least 10% with a minimum of
10 further orders from the list of prospective customers within 12 months from the date of
distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would last
into a second year. She has forecast the same increase in orders for a second year and predicts
that the annual employee satisfaction survey will show a measurable improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and prospective
customers and the benefits would last into a second year
A series of television and press advertisements was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not increase
their marketing activity. Whilst the Marketing department wants a very high quality, glossy product,
the project management team must be aware of the cost this will incur.
Which 2 statements should be recorded under the Reasons heading?

Scenario
A central government department, the Ministry of Food Hygiene (MFH), faces increasing pressure
to cut costs, better manage suppliers’ performance and reduce the confusion caused by
inadequate internal controls, outdated standards and outdated technology. External consultants
were employed to conduct a feasibility study to identify options to address the problems, and the
likely costs and benefits. The following options were considered:
Do nothing.
Re-engineer selected business functions.
Outsource selected business functions
The feasibility study concluded that there was a case for outsourcing the MFH Information
Technology
Division and the Facilities Division (maintenance of buildings and grounds). The recommendations
were:
One service provider should be contracted to provide the services currently provided by the
Information Technology Division and the Facilities Division.
A 10-year service contract should be agreed with the selected service provider.
The feasibility study developed high-level designs of the current organization, processes, systems
and
operating models, plus an outline Business Case for the required project. The external consultants
also made the following recommendations for the management of the project:
Use PRINCE2.
Set up the project with 4 management stages:
Stage 1. Standard PRINCE2 initiation activities.
Stage 2. Create detailed designs (future organization, processes, systems and operating
models) and the service level agreement between MFH and the future service
provider.
Stage 3. Request and evaluate proposals, select service provider and agree contract.
Stage 4. Transfer equipment and staff, transfer responsibility for service provision and run
trial period.
Initial estimates indicated that the project would cost £2.5m and take two years to complete.
MFH senior management agreed that there was a case for outsourcing, and accepted the
recommendations as a basis for the project. There is an expected saving of £20m over 10 years.
The Outsourcing project has completed the Starting up a Project process and is now in the
initiation stage. Because of the strategic importance of the project, the MFH Chief Executive
Officer has taken the role of Executive. A PRINCE2-experienced Project Manager has been
appointed from within MFH. Staff within the business functions being outsourced will work with the
external consultants who conducted the feasibility study to define the detailed designs.
Lines 1 to 6 in the table below consist of an assertion statement and a reason statement. For each
line identify the appropriate option, from options A to E, that applies. Each option can be used
once, more than once or not at all.

Additional Information
Product Description

Quality notes from the Daily Log
The Director of Information Technology Division (DIT) has been asked to ensure that any changes
to the outsourced staff employment contracts adhere to employment law. The DIT will review
future job descriptions of the transferred staff before the final contract is signed with the selected
service provider.
The service level agreement between MFH and the selected service provider will specify the type
and quality of service required. The selected service provider must follow the industry standards
for providing outsourced services.
MFH has a quality management system which contains a document control procedure for all its
documentation, however this does not include change management.
All project documents will be subject to a quality review. Nominated products will require a formal
approval record signed-off by the quality review chair.
Extract from the draft Quality Management Strategy (may contain errors)
Introduction
1. This document defines the approach to be taken to achieve the required quality levels during
the project.
2. The Project Board will have overall responsibility for the Quality Management Strategy.
3. Project Assurance will provide assurance on the implementation of the Quality Management
Strategy.
Quality management procedure - Quality standards
4. The selected service provider will operate to industry standards for providing outsourced
services.
5. MFH document standards will be used.
Records
6. A Quality Register will be maintained to record the planned quality events and the actual results
from the quality activities.
7. Configuration Item Records will be maintained for each product to describe its status, version
and variant.
8. Approval records for products that require them will be stored in the quality database.
Roles and responsibilities
9. The DIT will check that the employment contracts for outsourced staff adhere to employment
law.
10. Team Managers will provide details of quality checks that have been carried out.
11. Team Managers will ensure that the Quality Register is updated with the names of team
members who are involved in the review process.
12. The Senior User will review the Product Descriptions of the products to be produced by the
selected service provider to ensure that they can be achieved.
Which statement applies to the Introduction section?

Which statement best explains the purpose of Tailor to suit the project environment?

Product Summary
A list of customers will be collated. This will use existing information from the Accounts department
about current customers, and existing information from the Marketing department about
prospective customers.
Using the tariff of mailing costs available from the Post Office, a production cost forecast will be
produced to allow the CEO and the Marketing Director to decide whether to continue with the
project. If they decide to continue, they will give the approval to launch the internal label design
competition. Competition rules will be required to communicate details of the competition to the
staff. The chosen label design will then be selected from the competition entries.
The photos for the calendar must be based on existing photo design ideas available from the
Marketing department. The selected photos will be chosen from these. Monthly calendar displays
will be created to show the required layout of each page.
Product Breakdown Structure (contains errors)

Using the Project Scenario and the Extract from Stage Plan for stage 3 provided as additional
intonation for this question in the Scenario Booklet, answer the following 5 questions.
The Stage Plan for stage 3 has been produced.
The Engineering Manager insists that there are to be no interruptions to operations whilst
photographs are being taken of the engineering staff performing their everyday duties and
operating machinery. Two weeks ago the professional photographer produced the photo session
schedule based on the operational staff schedule. The operational staff schedule is produced
weekly and maintained by the Engineering Manager.
None of the £500 change budget has been used to date and this is available for the stage.
Which 2 statements apply to the External dependencies section?

Which of the following statements is FALSE regarding the Continued Business Justification?

Additional Information
Product Description

Quality notes from the Daily Log
The Director of Information Technology Division (DIT) has been asked to ensure that any changes
to the outsourced staff employment contracts adhere to employment law. The DIT will review
future job descriptions of the transferred staff before the final contract is signed with the selected
service provider.
The service level agreement between MFH and the selected service provider will specify the type
and quality of service required. The selected service provider must follow the industry standards
for providing outsourced services.
MFH has a quality management system which contains a document control procedure for all its
documentation, however this does not include change management.
All project documents will be subject to a quality review. Nominated products will require a formal
approval record signed-off by the quality review chair.
Extract from the draft Quality Management Strategy (may contain errors)
Introduction
1. This document defines the approach to be taken to achieve the required quality levels during
the project.
2. The Project Board will have overall responsibility for the Quality Management Strategy.
3. Project Assurance will provide assurance on the implementation of the Quality Management
Strategy.
Quality management procedure - Quality standards
4. The selected service provider will operate to industry standards for providing outsourced
services.
5. MFH document standards will be used.
Records
6. A Quality Register will be maintained to record the planned quality events and the actual results
from the quality activities.
7. Configuration Item Records will be maintained for each product to describe its status, version
and variant.
8. Approval records for products that require them will be stored in the quality database.
Roles and responsibilities
9. The DIT will check that the employment contracts for outsourced staff adhere to employment
law.
10. Team Managers will provide details of quality checks that have been carried out.
11. Team Managers will ensure that the Quality Register is updated with the names of team
members who are involved in the review process.
12. The Senior User will review the Product Descriptions of the products to be produced by the
selected service provider to ensure that they can be achieved.
Although it is not specified in the current corporate branding standards, the MFH corporate logo
should be shown on the front page of the service level agreement.