PROJ6002 Project Planning And Budgeting 2 : Essay Fountain

Question:

Project Description

As a project manager, you are to construct a Gantt chart and complete project scheduling as well as to develop the cost management planning components of your Cost Management Plan. Table 1 identifies the activities within a small project where all dependencies are presented.

Project Document

Your project document should involve the following aspects:

Create a WBS and a complete project schedule using a manual or software method of your choice and critically analyse the developed schedule.

Table 1- The dependency table and the estimated cost of activities

 

 

 

Expected

Estimated

Activity

Activity

Predecessor

Duration

Cost

 

 

 

(weeks)

($)

A

Excavate the Site

1

2800

B

Lay the Foundation

A (FS)

2

4200

C

Put up the Rough Wall

B (FS+1)

7

8600

D

Put up the Roof

C (FS)

4

3400

E

Install the Exterior Plumbing

C (FF-1)

3

5700

F

Install the Interior Plumbing

E (FS)

3

2600

G

Put up the Exterior Siding

D (FS)

4

10200

H

Do the Exterior Painting

E(FS),G(SS+3)

6

3800

I

Do the Electrical Work

C (FS)

5

2700

J

Put up the Wallboard

F(FS),I(FS)

6

4900

K

Install the Flooring

J (FS)

3

2000

L

Do the Interior Painting

J (FS)

3

3500

M

Install the Exterior Fixtures

H (FF+1)

1

2000

N

Install the Interior Fixtures

K(FS),L(FS)

3

5100

O

Project Closure

M(FS),N(FS)

1

1700

Estimate the cost of each activity using various tools and techniques. Critically discuss the appropriateness of tools and techniques used for your cost estimation and their applications. Your cost estimate must incorporate at least one resource given in Table 2 for each given activity. You also need to demonstrate different elements of cost within your cost estimation and the detailed budget.

Table 2- The available resources for the project

 

 

Name

Resource Type

Title

Hours

Rate ($)

 

 

 

Carol Johnson

Safety

Safety Engineer

50

Bob Hoskins

Engineering

Industrial Engineer

45

Sheila Thomas

Management

Project Manager

70

Randy Egan

Management

Site Manager

55

Stu Hall

Industrial

Foreman

40

Susan Berg

Accounting

Cost Accountant

50

Marty Green

Industrial

Shop Supervisor

53

John Pittman

Quality

Quality Engineer

55

Sally Reid

Quality

Jr. Quality Engineer

38

Lanny Adams

Sales

Marketing Manager

52

Kristin Abele

Purchasing

Purchasing Agent

42

 

Develop and aggregate the cost of resources needed to complete each activity and determine the detailed budget of the project.

In addition to your cost estimates and budget, describe the processes, and tools and techniques you are using in your cost control. Further, clearly explain how your budgetary plan will be managed . You can use the templates found in this module’s Learning Resources or a format of your own.

 

Answer:

Project Schedule

 

Figure 1: Gantt chart

(Source: Created by Ms Project)

Work Breakdown Structure

 

Figure 2: Work Breakdown Structure

(Source: Created by author)

Cost Estimating Worksheet

 

Cost Management Plan

Rules for Performance Measurement:

The performance of the cost is controlled by means of a cost controlling method known as Earned value management (EVM). This method allows the project manager to calculate the amount of work performed beyond the review of the cost. It is measured by achievement of the progress means the work performed percentage of each project task. In respect to measure the cost, EVM method used to measure the cost variance (Heldman, 2013). Formula used to estimate the cost variance (CV) = Earned value (EV) besides actual cost (AC). It is determined that if value of CV is zero, then it is going as planned, if greater than zero, then it means the project is under budget, whether less than zero means the project cost is over budgeted.

Cost performance index (CPI) is measured to analyze the performance of money. It is concluded that if: CPI = 0.1-0.2, the manager accounts to get an aim for its exclusion. CPI= >0.2, the manager accounts for elimination details, and the manager also provides remedial events to bring the plan back to its earlier stage,  and then plan is acceptable (Project Management Institute, 2013).

Performance measure

Yellow

Red

CPI

0.9-0.8 or 1.1-1.2

Less than 0.8 or greater than 1.2

 

Percentage calculation is other method used for the activities of the project as well as measured at various aspects. The percentage completion shows if the project is 100% completed, 50% completed, or not yet started.

Cost Reporting and Format: 

In the form of monthly status report, the project manager prepares the cost reporting. It is included the cost management section where it contains the earned value metrics. In the cost management plan, there is identification of cost variance outside of thresholds and will report to corrective measures as planned (Wysocki, 2014). The cost change requests are also triggered based on overrun of the project and tracked the cost to insert the actual cost spend in the project.

Process Management:

href=”https://myassignmenthelp.com/#Estimating_costs” title=”Indicate the estimating techniques that will be used to arrive at cost estimates. Examples include analogous estimates, three-point estimates, parametric estimates, etc.” Estimating costs

There are mainly three types of cost estimation techniques used in the project as follows:

Parametric estimation: It uses relationships of the variables for calculating the cost of the project. It is determined by means of identifying unit cost plus number of units needed for the project activity (Horváthová, 2010).

Analogous estimation: This cost estimation technique uses to estimate the budget based on the past data of the project, which is similar to this current plan.

Three point estimation: This cost estimation technique uses optimistic (O), pessimistic (P) and most likely (ML) cost for determine ideal cost for each of the project activity (Snyder, 2013). This technique allows to occur recognized risks to be counted as well as shape in the economical of the project. The weighting equation used to calculate total expected cost for each activity of the project is calculated as= [(O+4*ML+P) /6]

href=”https://myassignmenthelp.com/#Developing_the_budget” title=”Document how the project baseline will be developed. Include information on how contingency and management reserve will be handled.” Developing the budget

Budget planning is required to save the money, assessed long term project goals and provided accurate besides precise project cost. It helps to highlight any deviations between budget standards in addition actual project achievement. It also provides reason behind deviation of the budget cost from its planned value. The budget planning is required for the future as it is base of the cost control in long run. The budget for the project is developed by means of allocating the financial, human resources as well as physical resources to the project activities (Wysocki, 2014). The businesses are developing budget for monitoring progress of the project goals, help in spending of the project and predicting the cash flow as well as return of investment for each project.

href=”https://myassignmenthelp.com/#Updating_monitoring_and_controlling” title=”Document the process for updating the budget, including update frequency, permissions, and version control. Indicate the guidelines for maintaining baseline integrity and for re-baselining if necessary.” Updating, monitoring and controlling

The project cost management is required to set a limit to the costs of the project plan, so that it does not exceed the limit and control over the project cost. If there is no control over the project cost, then the expenditure of project will increase and go out of control. The cost control technique should be used at commencement of the project planning and remained through entire lifecycle of the project. In order to track the project cost, at the initial stage it is required to create and enter cost values for the budget resources assigned to the project tasks. The task costs are tracked and measured against budget resources (Project Management Institute, 2013). It is calculated by difference between scheduled as well as baseline costs, providing the cost variance. There is also required to control cost by tracking the income as well as expenditure of the project cost.

 

 

References

Heldman, K. (2013). PMP Project Management Professional Exam Study Guide (7th ed.). Indianapolis, IN: Wiley.

Horváthová, P. (2010). The use of operations management procedures in order to increase organizations competitiveness under the conditions of growing pressures of globalization. Global Business & Management Research, 2(1), 33–40.

Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK Guide®) (5th ed.). Newtown Square, Pennsylvania: Project Management Institute.

Snyder, C. S. (2013). A project manager’s book of forms: A companion to the PMBOK guide (2nd ed.). Indianapolis, IN: Wiley Publishing.

Wysocki, R. K. (2014). Effective Project Management: Traditional, Agile, Extreme (7th ed.). Indianapolis, IN: Wiley.

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