Page 1 of 5
MANU9M6 PROJECT MANAGEMENT ASSIGNMENT
OCHILS’ SKI CENTRE
Date issued: 1st March 2022
Submission: 4th April 2022 (noon) or earlier.
The Ochil Hills in winter
1.0 Introduction
Climate change is a complex phenomenon: Scotland has had more snow in recent winters, and some believe
that this is part of a long term trend. There could be a major business opportunity to develop new skiing
areas in Scotland. The Ochil Hills have been identified as a possible venue with good downhill skiing potential
and great scope for assisted cross-country skiing across the tops. Most importantly, the area is close to
many cities in central Scotland. Even if the skiing is not the best quality, the easy access could make the
Ochils’ Ski Centre an attractive business venture.
The Ochils’ Ski Company (OSC) has been formed and has undertaken several studies. Extracts from the
reports prepared by key personnel are provided, including: Managing Director, Finance Director, Marketing
Manager, Company Solicitor, Architect, Construction Manager, Health & Safety Officer and Human Resource
Director
2.0 Assignment tasks
Analyse the various options for the OSC project and prepare a report recommending the best course of
action. Check the report writing guidelines for detailed advice about the format. It should include the
standard sections:
• Executive summary (including key results and recommendations)
• Analysis (with sub-sections for each component of the analysis, e.g. schedule, finance)
• Conclusions (with clear interpretation for management)
• appendices (tables summarising results, e.g. milestone dates, should be included in the main body
of the report but full printouts of schedules should be placed in appendices; each should have a
distinct title and be numbered so that they can be cross referenced from the main text)
Where there are any ambiguities or a lack of data, make sensible assumptions. Record your assumptions in
full. The report should include:
• a project network plan and a schedule analysis estimating key dates for each option
• a financial appraisal of each option
• an analysis of the uncertainty in demand and its effects on your recommendations
Page 2 of 5
• the submitted report should be accompanied by an MS Project file and an Excel file to allow
appraisal of the logic and figures
Managing Director
“All the preliminary studies have now been completed. More information might be desirable, but the
financial backers are now expecting a definitive project plan. The proposals will be put to a board meeting
on 7 June 2022 and work could begin two months later if the board approves the plan. The development is
supported by the Scottish Government, and it is expected that the plans will be approved without a lengthy
public enquiry. I am keen on the full-scale development (see Figure 1 and Table 1): I think it would add to
the attractions of this area of Scotland and help the local economy. But we are a commercial company, and
we need to make sure that the finances work.”
Figure 1 The proposed OSC Development
| Key for Figure 1 | |
| Ski-lifts: 1,2,3,4,5,6,7 | |
| Shop and office: S&O at Airthrey | |
| Access roads A and B | |
| Restaurants | R1 at Airthrey |
| R2 at Lossburn | |
| R3 at Balquharn |
AssignmentTutorOnline
Finance Director
“Any project with a major capital investment has to ensure the long-term revenues can justify the initial
expenditure. This challenge is even greater when you consider the seasonality of this business. If you’re
only able to open the new ski centre in May, you must wait until December until any significant income
starts to flow. Our financial year starts on 1st April, so all of a single season’s skiing income is easily attributed
to one year. It would be great if we could open in time for December 2023. We have two main options:
Option 1 is smaller but quicker to build. I’m worried that Option 2 will just take too long, delaying the start
of our income stream. We really need any project like this to provide an IRR of at least 10%.”
5 km
Page 3 of 5
“Once the OSC is open for business it will cost about £0.9M per annum to operate Option 1 or £2.4M per
annum for Option 2, with the vast majority of these costs incurred during the skiing season.”
Table 1. Main Options
| Option | Lifts | Restaurants | Access Roads |
| 1 | 1, 2, 3 | Airthrey | A |
| 2 | 1, 2, 3, 4, 5, 6, 7 | Airthrey, Lossburn, Balquharn | A, B |
Marketing Manager
“With Option 1 the skiing will be quite limited so we cannot charge too much for the lift pass but we still
make money from the restaurant and ski hire. Experience elsewhere indicates that we should be able to get
an average income of about £60 per skier-day with the small ski centre. Given our location I would hope to
be able to attract 40000 skier-days over a skiing season (1 December – 1 April), assuming average winter
conditions. But of course, this is highly variable and depends on the snow and weather conditions. I have
managed to get some data from the Cairngorm Mountain ski centre to illustrate the problem in estimating
demand: their average is 104550 skier-days, but this has varied considerably (Table 2.).”
Table 2. Skier-days at Cairngorm Mountain
| Year | Skier-days |
| 2014/15 | 145007 |
| 2015/16 | 121420 |
| 2016/17 | 66463 |
| 2017/18 | 112430 |
| 2018/19 | 77430 |
| mean | 104550 |
“The larger Option 2 would be more attractive to skiers, offering more and longer ski runs. We could charge
a higher price and attract more skiers. I estimate that with Option 2 we could get an income of £70 per skier
with 80000 skier-days per year.”
“We will need to have a marketing campaign and develop our website before the ski centre opening. The
advertising budget can be quite small since I expect we will get a lot of media interest for free. We need to
prepare our materials (13 weeks; £70000) and establish agreements with various agents around the UK (12
weeks; £20000) before the marketing campaign is launched (15 weeks; £200000).”
Company solicitor
“There should be no real problems in completing legal and planning arrangements for the development.
The purchase of land and the planning approval should each take about 6 months from the start of the
project: both can be done at the same time since we already have draft approval. The cost of preparing the
documents and the various fees is about £100000 for Option 1 and £200000 for Option 2. No construction
can take place until the land purchase and the planning agreement is signed, though the architect can start
the design work as soon as possible.”
“There is some local concern about the possible long term environmental effect of the development so we
have had to agree that the ski centre is a temporary feature that could be abandoned if there are any
significant environmental problems. We cannot actually buy the land: we can only get a lease until April
2038. Although the facilities would have some residual value this will probably just be enough to pay for
cleaning and restoring the site. I reckon that the land for Option 1 will cost us £6M; say £12M for Option 2.
This is a single upfront cost that has to be paid before we can start any construction work”.
Page 4 of 5
Architect
“This is a great opportunity to design modern skiing facilities for a new resort in Scotland. The biggest
challenge will be to design the hillside restaurants at Lossburn and Balquharn so that they blend into the
scenery. The design work should take six months, but I would have to employ more staff for Option 2 (cost
of Option 1 = £250000; cost of Option 2 = £500000). I would not recommend starting any construction until
the whole design is finished.”
Human Resource Director
“While I have a lot of work to do recruiting the staff needed for the construction and the operation of the
OSC, I do not envisage that this will really have any impact on the project schedule. The only activity you
might consider is the final staff training: training will take place earlier but the final training with the full
operational ski centre can only happen once the Health and Safety inspections have been completed. We
will attempt to simulate the whole centre’s operations, using volunteers as customers. This training will
require 1 week for Option 1 (cost=£20000) and 3 weeks for Option 2 (cost=£40000).
Construction manager
“Construction work cannot start until the planning permission is in place. However, every effort will be made
to start construction straight after the planning permission is granted, and the land purchase is complete.”
“The construction work can be grouped into a number of work packages:
• Developing the ski area, including constructing the access roads and building the ski-lifts and
associated ski runs/ pistes. The map of Figure 1 indicates the proposed roads and lifts.
• Building the office block and the ski shop
• Building the new restaurant(s)”
A ski lift in Scotland
Constructing access roads
“The access roads are crucial. You can’t start work on any ski-lift until you have finished the relevant access
road to move materials to the top of the lift. And of course, no construction work on the hillside restaurants
can begin until their access roads are open. There is a choice of contractors for these roads; both build good
roads in this kind of terrain but uCan is much more expensive than MacAllan – Table 3 summarises the bids.”
Table 3. Bids for access road construction
| Work | Contractor | Cost (£’000) | Time (weeks) |
| Access road A | MacAllan | 500 | 30 |
| Access road B | MacAllan | 1000 | 32 |
| Access road A | uCan | 800 | 20 |
| Access road B | uCan | 1300 | 26 |
Page 5 of 5
Building the ski-lifts and pistes
“Building a ski lift can be an unpredictable process. We have collected experience from some other similar
sites, as noted in Table 4. Hopefully this will help us estimate the likely costs and durations for the
construction of the lifts for this project.” (Data describing these durations and costs from the previous
projects are provided separately; each Project Group has their own data set).
Table 4. Previous ski-lift and associated piste constructions
| Length (km) | |
| Ski-lift a | 1.3 |
| Ski-lift b | 2.2 |
| Ski-lift c | 3.0 |
| Ski-lift d | 1.2 |
| Ski-lift e | 0.5 |
| Ski-lift f | 2.4 |
| Ski-lift g | 4.2 |
| Ski-lift h | 0.8 |
Office/ Ski Shop and restaurants
“Each of these building involves three stages: preparing the foundations and associated services (e.g. water
and electricity), erecting the structure (e.g. walls, roof) and then fitting-out (e.g. decorating and installing
equipment). We have a number of teams that can undertake this work. It is assumed that if we choose
Option 1 that two teams will be sufficient; with Option 2 we think that three teams will be needed. The
estimated costs and durations of each building activity is summarised in Table 5. It might be possible to hire
more staff to speed up the work. Although the same total amount of work would be undertaken there are
fixed costs associated with recruiting and managing each team so there would be an additional cost of about
£50000 for each extra team.”
Table 5. Building the shop and restaurants
| Foundations | Structure | Fittings | |||||||
| Duration (weeks) |
Teams required |
Cost £’000 |
Duration weeks |
Teams require d |
Cost £’000 |
Duration weeks |
Teams required |
Cost £’000 |
|
| Office/ shop |
8 | 1 | 50 | 8 | 1 | 100 | 6 | 1 | 30 |
| Airthrey restaurant |
12 | 2 | 100 | 10 | 2 | 200 | 8 | 1 | 100 |
| Lossburn restaurant |
16 | 2 | 250 | 14 | 2 | 300 | 10 | 1 | 150 |
| Balquharn restaurant |
18 | 2 | 300 | 16 | 2 | 350 | 10 | 1 | 180 |
Overheads
“In addition to the costs that can be associated with specific activities, there are more general overheads
such as the project management and communication. The overheads for Option 1 should be about £10000
per week; Option 2 is bigger so we need to allow £15000 per week.”
Health & Safety Officer
“Health and Safety inspections of all the key facilities are necessary before the OSC can open for business.
Once the restaurant(s) are completed, a Health and Safety inspection can take place, taking 2 weeks for
Option 1 (cost=£20000) and 3 weeks for Option 2 (cost=£40000). The inspections of the lifts require 6 weeks
for Option 1 (cost=£30000) and 14 weeks for Option 2 (cost=£70000); this time includes an allowance for
fixing any minor problems and the inspectors making a repeat visit to give their final approval.”
- Assignment status: Already Solved By Our Experts
- (USA, AUS, UK & CA PhD. Writers)
- CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS
