HD assignment on project management

The team of Homeless Organization Named “Jay Nepal” has been working on a project for five years, the project that has the main aim of eradicating homelessness from our streets. It has achieved a lot through the past years and as stipulated below there are factors that have kept the shelter running just like any project.

Although it is a kind of homeless shelter that is considered during emergencies such as adverse weather conditions the shelter has been functional to cater to individuals. The shelter has sections such as the kitchen and the sleeping area, with 200 beds which mostly facilitates 200 people, till the last month was serving for 80 people. So, the shelter provides meals clothing and other facilities for the people that mostly comes from good wishers and government funding. It has been in operation for about five years and there is more the team has learned about the shelter for that time. The project was scheduled for 10 years so currently there are only five years remaining to establish the way forward that is it will continue its operations or it will be closed. That all depends on the stakeholders such as the federal government who are the major financiers of the project, covering costs such as salaries, security, supplies in terms of any requirements. That is of course in addition to other organizations such as the nonprofit organizations who come in to provide, extra staffs who work on a voluntary basis in helping through the activities, and at times provide grants and other requirements, basically, that’s what the University around us does. So basically, we have plenty of help from others that has made us successful through those past five years which supported the organization to make an addition of 70 people in the shelter in next one month. By then the total will be 150 people, the shelter will surge the challenges of providing extra foods, storage and other facilities to these people. Earlier there were five big refrigerators of 2000 liters capacity that was enough to store foods and groceries for 80 people. Thus, the organization will not able to fit and store all the food stuffs for 150 people in five refrigerators. So, the management team has developed the following alternatives to eradicate the storage problems.

1) One proposed solution would be adding 5 more brand new refrigerators of same capacity.

2) Or another option would be buying 5 second hand refrigerators

3) Installing a new cold room near the location – Buying a cold room

4) Or renting the cold room

Basically, the cost of a brand-new fridge is $8000 so it will cost $40000 for adding 5 new fridges. Roughly it will take an addition fixed labor cost of $800 to set up and monthly electric bill as previous record around $3000 for 5 fridges. So, the new fridges in total will emerge a new electric bill of around $6000 per month. But the main issue with adding 5 new fridges will be the problem of space and the most importantly electric load which it can’t handle. Already with the usage of 5 fridges there has been issue regarding power cut off due to overloading of the sockets. That clearly represents with the installation of new additional fridges the problem will become more devasting. Hence the management team of homeless organization had denied the option of adding new fridges or buying some second hand fridges. Besides, the project is for five years and adding up some second hand fridges which don’t have any warranty that it will run for the required period will bring some extra issues that leads to waste of money and time in the future.

So, the team has decided to go for other alternatives of Installing a cold room. The best solution for installing a Cold room can be either buying it or renting it.

So, the project at hand is finding a cold room. According to the organization, the budget of the project is $50000 for finding the space and installing the cold room and the projects should be completed in 3 weeks.

· The first task of the project is cold room hunting that is looking for available offers (in the range of around Approximately $3,000 per week), followed by accepting the bid including proper exhaust system and preferably nearby location especially closer to the kitchen, for the first week.

· The next task is finding contractors who will hire labors providing them the total wage of around $17000 at the end of the task if they don’t come with the required supplement and equipment (i.e. Approx. 1215 per day for all the labors and the contractor) , including hauling expense and installing fee required for the materials and equipment to construct the cold room.

· The other task is finding vendors that will supply everything needed for the cold room which comes under the budget of around $30000 that is if the contractor doesn't come with them, for the second week.

· The final task should be to begin the work that should take the first days of the second week to the end of the third week.

Obviously, there are challenges that the team tend to check on, which are the factors that affect the cost estimation of the project. They include:

Planning Horizon: the next that was in consideration during cost estimation is the horizon, whereby the longer the horizon that's where uncertainty sprouts. But this project can be compared to a mini project that only takes three weeks thus gave us the opportunity to have better estimate costs. (Roberts 2011).

The team decided on settling on the bottom-up estimation techniques because it is the one which is considered most accurate. This is because it also involves the team members, in the case that their inputs are required in the estimating process. This is possible because the team members work the project manager to comes up with the estimates from the task level developed at the Work breakdown structure. This means that it will provide cost and duration estimation, but it took some time because of the involvement of all the team members that will give them a higher level of commitment from the project team. (Gasik 2011)

This cost estimation method breaks down the project into small parts and estimates cost in more detailed way. Then the overall cost is estimated by adding all estimates. The team worked from the lowest detail in the work breakdown structure. The team developed the work package below that goes with the work breakdown structure.

The team established from their individual tasks that it will cost $ 50000 installing cold room which includes contractor or labor cost, materials cost, transportation cost. The rent of the room will cost $720000 at the end of five years, that is to the addition of about an estimated $30000 for the maintenance in five years ($3000 every six month) and an additional $25000 for tax and insurance of the cold room. When all these figures will be added to the buying price of the cold room, we get $825000 estimated cost for buying the cold room.

By then the index figure for the similar project of renting cold room was 212 in 2012 with total cost of the cold room $970,000 including all costs. Referencing the project with similar function, type and size currently the index in 2019 has reached 286. Calculating the cost of renting a cold room in 2019 using index estimating techniques, $970,000(286/212) = $1308585.

Hence the cost of renting will cost over 1 million dollars.

Hence the installing up the cold room has been seen as the best solution for the team as per the estimation which is the better choice. This because the estimated cost for renting comes to over 1 million (i.e. $1308585) and the estimated cost for buying the cold room comes to $825000.

Comparing the Order of Magnitude between buying and renting the cold room.

renting the cold room is $1308585 that becomes 1.308585 * 10^6 i.e. 6.

Buying the cold room is $825000 that becomes 8.25000 * 10^5 i.e. 5.

Thus, buying can fit the budget and the time frame the organization gave. But also, the team focused on sustainability and project optimization and came up with the following.

The team took an audit of the organization and checked what resources we had in place in order to establish what needs to be added or what is enough, based on the continuation of the project when the federal funding is complete in order to achieve the long-term vision. Basically, the feeding and grooming the homeless project is something that has been done before, we could tell by looking at the files since almost all of the team members are new. Currently, the organization has only the team members who are the same people who will be on the field, none of them can do the cooking hence the need for hiring a catering team. Or alternatively, we could come up with funding that can be used to liaise with the shelter so that we can provide the food to be cooked and help in serving. The next resource we have is transportation but it will not be sufficient we will need to hire since there will volunteers who will come to help with the project for a month which will be rather costly. The other resource we have would be through our social media sites and our website where we can use them as avenues to gather as much support as possible because of the big task ahead of us. (Gasik 2011)

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Akintoye, A, 2000. Analysis of factors influencing project cost estimating practice. Construction Management & Economics, 18(1), pp.77-89.

Roberts, P., 2011. Effective Project Management: Identify and Manage Risks Plan and Budget Keep Projects Under Control. Kogan Page Publishers.

Gasik, S., 2011. A model of project knowledge management. Project Management Journal, 42(3), pp.23-44.

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