unit#10 Rewrite

Part 1

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?

To decide whether the vendor's bid is sensible I would check for the following steps:

• The bid ought to be in accordance with the project estimate cost and ought to comply with it

• The temporary worker presenting the bid ought to be genuine and have great reputation

• The bid ought to pursue all the legitimate prerequisites

• The bid ought to be legitimate for the project and should fulfill all of the segments

• The bid should also pursue every one of the terms and conditions referenced for the venture

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

Parametric estimation: It is an estimation of cost, time or risk that is based on a calculation or algorithm. As the name suggests, parametric estimates are based on parameters that define the complexity, risk and costs of a program, project, service, process or activity.

E.g.

 1. A moving company estimates the price of an office move using a base cost and variable cost based on the number of employees and distance. Unique complexities such as moving an air conditioning system is added as a separate cost. This base cost is multiplied by surcharges for moving to a multi-floor premise and working on a weekend.

2. The expense to construct a current shopping complex can be referred and we can add the resources to decrease the time dependent on past information and scientific estimations.

Analogous Estimation: This type of estimation depends on the past historical data as well as the performance of the project team

E.g.

1. In the event that an organization has undertaken advancement of an application and delivered it effectively, this can be utilized for estimation if similar application needs be created

2. For example, if it cost $7,100 to develop a website a few months ago and you are responsible for developing a new similar website, you estimate it to cost $7,100.

Bottom-up Estimation: This type of estimation can be done by breaking the entire project into modules and considering them individually.

E.g.

1. Individual managers must first create their own budgets, referencing past budgets and spending patterns while incorporating cost projections for the upcoming fiscal year. Upper-level managers and executives must then review all the budgets that managers submit, combining them to determine totals.

2.A project which requires high amount of detail and accuracy

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

Cost management is the way toward assessing, allotting, and controlling the expenses in a project. It enables a business to anticipate coming costs so as to diminish its odds going over spending plan. It is one of the most important and essential part of the project planning phase and it also effectively serves as a baseline that guarantees that the project cost is kept within the limits of the budget.

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.

AGGREGATION OF PROJECT BUDGET

Duration in Days	Resource	D1	D2	D3	D4	D5	D6	D7	D8	D9	D10
2	Alcides	270	270
6	Joan	200	200	200	200	200	200
2	Alcides			270	270
3	Alcides							270	270	270
10	Joan										200
2	Alcides
5	Joan
4	Joan
2	Alcides
	Total for the day	470	470	470	470	200	200	270	270	270	200
	Cumulative	470	940	1410	1880	2080	2280	2550	2820	3090	3290

Duration in Days	Resource	D11	D12	D13	D14	D15	D16	D17	D18	D19	D20
2	Alcides
6	Joan
2	Alcides
3	Alcides
10	Joan	200	200	200	200	200	200	200	200	200
2	Alcides										270
5	Joan										200
4	Joan										200
2	Alcides
	Total for the day	200	200	200	200	200	200	200	200	200	670
	Cumulative	3490	3690	3890	4090	4290	4490	4690	4890	5090	5760

Duration in Days	Resource	D21	D22	D23	D24	D25	D26
2	Alcides
6	Joan
2	Alcides
3	Alcides
10	Joan
2	Alcides	270
5	Joan	200	200	200	200
4	Joan	200	200	200
2	Alcides					270	270
	Total for the day	670	670	400	200	270	270
	Cumulative	6430	6830	7230	7430	7700	7970

TIME PHASE SCHEDULE

Activity	Time	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21	22	23	24	25	26
A	2	X	X
B	6	X	X	X	X	X	X
C	2	X	X
D	3							X	X	X
E	10										X	X	X	X	X	X	X	X	X	X
F	2																				X	X
G	5																				X	X	X	X	X
H	4																				X	X	X	X
I	2																									X	X

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.

AGGREGATION OF PROJECT BUDGET

Activity	Duration In weeks	Resource	Week1	Week2	Week3	Week4	Week5	Week6	Week7
1.1.1	3	Becky	1050	1050	1050
1.1.2	1	Ann				1800
1.1.3	2	Clive					1000	1000
1.2.1	2	Ann	1800	1800
1.2.2	2	Becky				1050	1050
1.2.3	1	Ann						1800
1.2.4	1	Clive							1000
1.3.1	2	Clive	1000	1000
1.3.2	4	Ann							1800
1.3.3	3	Becky
1.3.4	3	Becky						1050	1050
1.4.1	2	Becky
1.4.2	2	Clive
1.4.3	2	Ann
1.4.4	2	Clive
1.4.5	2	Clive
		Cost per week	3850	3850	1050	2850	2050	3850	3850
		Cumulative Cost	3850	7700	8750	11600	13650	17500	21350

Activity	Duration In weeks	Resource	Week8	Week9	Week 10	Week 11	Week 12	Week 13	Week 14
1.1.1	3	Becky
1.1.2	1	Ann
1.1.3	2	Clive
1.2.1	2	Ann
1.2.2	2	Becky
1.2.3	1	Ann
1.2.4	1	Clive
1.3.1	2	Clive
1.3.2	4	Ann	1800	1800	1800
1.3.3	3	Becky				1050	1050	1050
1.3.4	3	Becky	1050
1.4.1	2	Becky		1050	1050
1.4.2	2	Clive				1000	1000
1.4.3	2	Ann						1800	1800
1.4.4	2	Clive
1.4.5	2	Clive
		Cost per week	2850	2850	2850	2050	2050	2850	1800
		Cumulative Cost	24200	27050	29900	31950	34000	36850	38650

Activity	Duration In weeks	Resource	Week15	Week16	Week 17	Week 18
1.1.1	3	Becky
1.1.2	1	Ann
1.1.3	2	Clive
1.2.1	2	Ann
1.2.2	2	Becky
1.2.3	1	Ann
1.2.4	1	Clive
1.3.1	2	Clive
1.3.2	4	Ann
1.3.3	3	Becky
1.3.4	3	Becky
1.4.1	2	Becky
1.4.2	2	Clive
1.4.3	2	Ann
1.4.4	2	Clive	1000	1000
1.4.5	2	Clive			1000	1000
		Cost per week	1000	1000	1000	1000
		Cumulative Cost	39650	40650	41650	42650

TIME PHASE SCHEDULE

Activity	Time	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18
1.1.1	3	X	X	X
1.1.2	1				X
1.1.3	2					X	X
1.2.1	2	X	X
1.2.2	2				X	X
1.2.3	1						X
1.2.4	1							X
1.3.1	2	X	X
1.3.2	4							X	X	X	X
1.3.3	3											X	X	X
1.3.4	3						X	X	X
1.4.1	2									X	X
1.4.2	2											X	X
1.4.3	2													X	X
1.4.4	2															X	X
1.4.5	2																	X	X