Last year the Mobile Tech strategic management group set a goal of having a colour mini tablet available for the consumer and small business market for less than $200. A few months later the senior management met off-site to discuss the new product. The results of this meeting were a set of general technical specifications along with major deliverables, a product launch date and a cost estimate based on past experience. Shortly afterwards, a meeting was arranged for middle management explaining the project goals, major responsibilities, the project start date the importance of meeting the product launch date within the cost estimates. Members of all departments involved attended the meeting. Excitement was high. Although everyone saw the risks as high, the promised rewards for the company and the personnel were emblazoned in their minds. A few participants questioned the legitimacy of the project duration and cost estimates. A couple of R&D people were worried about the technology required to produce the high-quality product for less than $200. But given the excitement of the moment, everyone agreed the project was worth doing and was doable. The colour mini tablet project was to have the highest project priority in the company. Lauren was selected to be the project manager. She had 15 years of experience in tablet design and manufacture, which included successful management of several projects related to tablets for commercial markets. Since she was one of those uncomfortable with the project time and cost estimates, she felt getting good bottom-up time and cost estimates for the deliverables was her first concern. She quickly had a meeting with the significant stakeholders to create a WBS identifying the work packages and organisational units responsible for implementing the work packages. Lauren stressed that she wanted time and cost estimates from those who would do the work or were the most knowledgeable, if possible. Getting estimates from more than one source was encouraged. Estimates were due in two weeks. The compiled estimates were placed in the WBS/OBS. The cost estimate seemed to be in error. It was $1,250,000 over the senior management estimate; this represented about a 20 per cent overrun! The time estimate from the developed project network was only four months over the top management time estimate. Another meeting was scheduled with the significant stakeholders to check the estimates and then to brainstorm for alternative solutions. The cost and time estimates made by Lauren's team seemed to be reasonable. Some of the suggestions for the brainstorming session were: Change scope Outsource the technology design Use the priority matrix to get top management to clarify their priorities Partner with another organisation or build a research consortium to share costs and to share the newly developed technology and production methods Cancel the project Commission a break-even study for the mini tablet. Very little in the way of concrete savings was identified, although there was consensus that time could be compressed to the market launch date, but at additional cost. Lauren met with the marketing (Connor), production (Kim) and design (Sarah) managers, who provided some ideas for cutting costs, but nothing significant enough to have a large impact. Sarah remarked, 'I wouldn't want to be the one to deliver the message to top management that their cost estimate is $1,250,000 off! Good luck, Lauren.' Discussion: 1. At this point, what would you do if you were the project manager? 2. Was top management acting correctly in developing an estimate? 3. What estimating techniques should be used for a mission-critical project such as this