Assessing and Managing Project Cost (

BUSN-3630 Individual Assignment 1 /2021-v3 1

COMMERCE AND BUSINESS ADMINSTRATION

SUMMER 2021

BUSM3630 Project Cost, Quality, Risk, Procurement

Assignment 1: Individual Assignment – Assessing and Managing Project Cost (10%)

You will examine scenarios regarding specific practices and techniques relating to project management in particular estimating cost and monitoring and controlling including status reporting. This assignment is based on your course readings, your own experience and understanding of analyzing and evaluating cost estimates, applying indices to manage project progress and monitoring and tracking budget progress. You will apply your learning by providing expert advice to a company to in resolving a project management issue.

This assignment has two parts and you are required to use excel spreadsheet to complete the budget for part 1 (Include the spreadsheet as an appendix). The case has a short turnaround so make sure you start working on the assignment early. In grading your assignment the instructor will look for evidence that you have kept up with the required reading and can think critically about the concepts discussed. You can include any additional resources and provide appropriate APA style referencing. Your paper should be set up in a business report format.

Your paper should include:

 Title page

 Executive Summary

 Brief introductory paragraph

 Provide appropriate advice, action or opinion as an expert.

 Conclusion

 References

Make sure you indicate all your sources, including websites and other reference materials. Use credible resources and follow APA reference style to meet Douglas College referencing requirements. A minimum of 3 resources and maximum of six references is required for this assignment.

Submission: Papers must NOT be more than 4-6 pages and must be submitted in MS Word or PDF using the assignment tool. Please note that the page numbers excludes the Front page, Reference page and Appendices. Make sure your name and Assignment 1 are included and ensure you comply with the appropriate file naming convention as follows: Last name _First name_Assign 1 (e.g., Smith Jane_Assign 1.doc).

BUSN-3630 Individual Assignment 1 /2021-v3 2

COMMERCE AND BUSINESS ADMINSTRATION

SUMMER 2021

Requirements

Part 1 – Reviewing Budget Estimates: (5%)

You are a new project manager who joined the company ‘Ultra Safe’ recently. The company is currently reviewing the different methods used for estimating schedule, cost and resource since the company is concern with the quality and accuracy of estimation. You have been provided the following information to create a budget for designing and producing ‘Ultra Safe’ brochure using Excel spreadsheet.

The following are some assumptions about the project and the budget that you made.

• You estimated that as the project manager you will spend 200 person-hours on the project and a teammate (Maryam) will spend 100 person hours.

• Rate for project manager is $45/hour and Maryam is $25/hour • Stationery to copy the brochures estimated cost is $1000 • Travel cost to visit vendors and suppliers is $300 • Graphic designer fees to create the artwork for the brochure is $5000 • ‘Ultra Safe’ has developed a combined indirect cost rate of 60% of direct salary. •

I. Explain how you will determine the direct cost, indirect cost and total cost. II. Assuming that you received information that the cost of stationery increased by 10% and the graphic designer’s

fee increased by 25%. Include the variances and total variance in the report. III. According to Maryam the best budgets are timed-phased, however, she suggested that in budgeting, the project

manager must focus on the different phases of the project such as: • Scope documentation • Project Planning • Design • Development (Buying Materials) • Prototype (drafts) • Prototype (Review) • Production

Based on Maryam’s views about creating a budget that focuses on the different phases of project or timed-phased budget; what advice do you have for the project manager and project team?

BUSN-3630 Individual Assignment 1 /2021-v3 3

COMMERCE AND BUSINESS ADMINSTRATION

SUMMER 2021

Part 2: Interpreting Project Status Reports (5%)

Interpret the following Project Status Reports from company ‘Ultra Safe’ and provide guidance to project sponsors on:

a. how to proceed with each project, and

b. justify which of the projects should be given the highest priority for use of shared resources as you can only afford to spend an additional $100,000 on one of the projects. You must choose only one project to support. You may not split the $100,000 between the projects.

Project 1: Project Status Report May 2nd

Project Summary

Project 1 will produce a prototype model of a safety cage for prisoner transport that can be easily fitted to many models of vehicle, proposed product name is ‘Safe Ways’. This potential product was requested by the marketing department to meet a market need in private contractor prisoner transportation for the North American market. The marketing department believe the potential of this product for the company is in the region of $50 million profit annually if it can be produced at a cost of $1,000 and sold for $1,500 (a price point marketing believe represents the ‘sweet spot’ for the market segment they have identified).

Project Deliverables and milestones

Project Specifications (Marketing Department product requirements) January 10

High Level Design (Engineering) February 15

1st Pass Model (Project Team) March 15

Field Test 1 April 1

2nd Pass Model (Project Team) April 15

Field Test 2 May 1

3rd Pass Model (Project Team) May 15

Field Test 3 June 1

Project Review and Closure June 15

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Major Issues and their impact

Issue 1: Marketing were two weeks late with the project specifications, which the engineering department argued were too vague. After three weeks of back and forth between engineering and marketing a workable specification was agreed.

SPI: 0.9

CPI: 1.1

ETC: $750,000

Change Requests

Accepted: None to date

Open: Request to increase the project budget by $95,000 to compensate for the time lost to marketing and engineering issues.

Risks

Risk One: Engineering are concerned that the large variation in sizes across vehicles models used may negatively impact the possibility of developing an appropriate product. We have started the process of exploring the most used vehicle models for prisoner transportation to reduce the possibility of the product failing (this work will cost $5,000). Marketing have said if we do this we may reduce the potential market for the product by 10%

Project 2: Project Status Report May 2nd

Project Summary

Project 2 will produce an update model of our best-selling ‘Safe_n_Sound’ in house ‘safe room’ product. This update model was requested by the marketing department to meet a market need for enhanced security and increased comfort and to allow us to hold and grow our market share as competitors launch their latest high comfortable ’safe room’ models.

The marketing department believe the potential for the updated model of this product for the company is in the region of $40 million profit annually if it can be produced at a cost of $30,000 and sold for $45,000 (a price point marketing has said our competitors cannot compete against). Should we delay and not update the model they believe we are likely to lose $10 profit annually until our product is no longer a viable product for the market place within four years.

The budgeted cost for the project is $1,000,000

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SUMMER 2021

Project Deliverables and milestones

Project Specifications (Marketing Department product requirements) March 10

High Level Design (Engineering) April 1

1st Pass Model (Project Team) April 15

Field Test 1 May 1

2nd Pass Model (Project Team) May 15

Field Test 2 June 1

Project Review and Closure June 15

Major Issues and their impact

None to date

SPI: 1.01

CPI: 0.9

ETC: $720,000

Change Requests

Accepted: None to date

Open: Request to reduce the project deadline by two weeks to allow for launch at a new trade show in Los Angeles, allowing for a bump in advance sales and taking market share from our competitors. This change request will cost us an additional $100,000 in project costs.

Risks

Risk One: Reduce the project deadline by two weeks to allow for launch at a new trade show in Los Angeles, allowing for a bump in advance sales and taking market share from our competitors in the region of $1,000,000.

Response: Hire additional personnel for development and trade show launch at a cost of an additional $100,000 to the project – needs management approval.

END

BUSN-3630 Individual Assignment 1 /2021-v3 6

COMMERCE AND BUSINESS ADMINSTRATION

SUMMER 2021

Exemplary Proficient Developing Below Expectations

Report Organization and formatting

All required sections are included, and each is effectively organized. Formatting is appropriate and consistent. Ideas presented were coherent, logical, integrated, and insightful. Appropriate Business Report

All required sections are included. Ideas are organized and coherent, and somewhat insightful and integrated.

Ideas are somewhat organized, have some coherency, provide some insight and integration.

Ideas are unorganized, lack coherency and provide little to no insight or integration.

Task completion

Understood the requirements of the task and completed the assignment demonstrating application of strong project management principles and concepts and best leadership and management practices.

Understood the requirements of the task and mostly completed the assignment applying project management concepts and some sound practices in leadership and management.

Not fully understood the requirements of the task and makes little mention and connections to project management principles and acceptable practices in leadership and management.

Misunderstood the requirements of the task and failed to demonstrate applications of project management principles and concepts.

Context, Analysis and Recommendations

Ideas emerge from evidence with a clear focus on the issue at hand. Analysis was comprehensive and detailed explanations provided to and justify opinions based on evidence provided. Analysis and resolutions were clear, engaging, and thorough.

Clear and sufficient analysis provided and supported by evidence with some justifications of opinions based on project management principles

Partial ideas provided and analysis was basic with some points missing or not properly explained.

Ideas are not related to evidence, and analysis provided were basic and missed many points.

Grammar

Very few, if any, errors in spelling, punctuation, modifiers, changes in voice or tense, and very few (if any) sentence fragments.

Few errors in spelling, punctuation, modifiers, changes in voice or tense, and few (if any) sentence fragments.

Some errors in spelling, punctuation, modifiers, changes in voice or tense, and some sentence fragments.

Multiple errors in spelling, punctuation, modifiers, changes in voice or tense, and presence of sentence fragments.

Sources and References. Include minimum of three references Appropriate use of APA style for citations and reference page.

Exceeds the minimal three required references. Cites all evidence and resources appropriately in APA style. File naming was appropriate.

Exceeds the minimal three required references Cites some evidence and resources appropriately in APA style. File naming was appropriate.

Includes three references. Cites some evidence correctly and generally follows APA style. File naming was somewhat appropriate.

Does not include references. Some sources are unreferenced, incomplete or inaccurately cited. File naming was inappropriate.