Budget Estimating

Budget Estimating (100 points)

This assignment consists of 2 parts: questions about budget estimation and developing a budget.

Part 1 Questions (10 points)

Provide responses to the following questions

1.    You are providing a review of contractor bids for a component of your upcoming project.  What can be done to determine whether or not a vendor’s bid is reasonable?

2.    Describe the conditions for which parametric, analogous and bottom up estimation techniques work best, and provide 2 examples in support of each method.

3.    Why is a cost management plan important?  How does the plan benefit the project manager?

 

Part 2 Budget Estimating (30 points)

Using the same scenario from the previous unit on scheduling, create a time-phased budget for the following project.  Prepare a figure like Exhibit 10.9, CPT 4e, that illustrates the daily and cumulative costs for the resource-leveled project.

Assume the following hourly rates:

Alcides $45 / hr.

Joan $50 / hr.

 

Activity IDActivityImmediate PredecessorDuration in daysResourceWork Hours per Day
AEvaluate freezers 2Alcides6
BChart temperatures 6Joan4
CReview service record 2Alcides 
DConsult with HVAC engineerA, B, C3Alcides 
EDevelop construction planD10Joan 
FComplete IC assignmentE2Alcides 
GComplete ROI analysisE5Joan 
HConduct regulatory reviewE4Joan 
IObtain construction approvalF, G, H2Alcides 

 

Part 3 Budget Estimating (50 points)

You are the project manager for a process improvement project for Company XYZ.    Prepare a figure like Exhibit 10.9 that illustrates the weekly and cumulative costs for the resource-leveled project.

Hint: To accomplish this exercise, you’ll need to create a project schedule in MS Excel (or by hand), create resource assignments, assign costs to each resource, and assign the resources to each task.  Some resource leveling will be required.

In this project, you have 3 employees: Ann, Becky and Clive.  Each person is limited to the amount of time allocated to your project.  Ann and Becky are available 30 hours/week; Clive is available 20 hours/week.  There hourly rates are: Ann: $60/hour; Becky: $35/hour; and Clive: $50/hour.

 

WBSActivityImmediate PredecessorEstimated Duration in weeksResource
1 Process Improvement Project   
1.1 Operational definition   
1.1.1 Research literature 3Becky
1.1.2 Identify and define terms1.1.11Ann
1.1.3 Obtain approval of definition1.1.22Clive
1.2 Target Selection   
1.2.1 Solicit partners for pilot 2Ann
1.2.2 Hold brainstorming meeting1.2.12Becky
1.2.3 Identify characteristics of targets1.2.2, 1.3.11Ann
1.2.4 Obtain approval of partners1.2.3, 1.1.2, 1.3.41Clive
1.3 Question set   
1.3.1 Identify process group members 2Clive
1.3.2 Develop question set1.2.34Ann
1.3.3 Prototype and validate question set1.3.23Becky
1.3.4 Add partners1.3.1, 1.2.13Becky
1.4 Pilot process   
1.4.1 Schedule with target audience1.2.42Becky
1.4.2 Conduct beta test1.3.4, 1.2.42Clive
1.4.3 Process feedback from target audience1.4.22Ann
1.4.4 Conduct pilot1.4.32Clive
1.4.5 Analyze results1.4.42Clive

 

Mechanics (10 points)

Part 1 responses should be presented in a question-response format.  Use Arial font with 11 point. There is no word limit.

Your Instructor will use Turn-it-in to ensure your paper is authentic work.  To avoid plagiarism, see the course home page for more information and use the Purdue Online Writing Lab to learn how to paraphrase, summarize and cite the references you use in all academic writing assignments.

Parts 2 and 3 Use MS Excel (MS Project is not acceptable) to create the budget estimate and present it similar to Exhibit 10.9.  Show intermediate steps (schedule, resource schedule assignments, resource-leveled schedule and any other elements needed to create the time-phased budget estimate.

It is expected that each part of this assignment have excellent mechanics (presentation, grammar and spelling) and exhibit the quality of work capable of a group of graduate students and working professionals. All sections of the document submitted must be readable at 100% magnification.

Your Instructor will use Turn-it-in to ensure your paper is authentic work.  To avoid plagiarism, see the course home page for more information and use the Purdue Online Writing Lab to learn how to paraphrase, summarize and cite the references you use in all academic writing assignments.

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