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Running Head: PROJECT PLAN PART 2

PROJECT PLAN PART 2 5

Project Budget

“The budget is the amount of money that has been authorized to be spent on the completion of the project. Irrespective of the project measurement indications and the fact that the total project cost may exceed this amount the budget remains the same” (Marks, 2012). During the initial phases of a project, the budget for the project is of the utmost importance. There are essentially two budgets, the capital budget and the labor, or operating budget. The capital budget is for those expenditures that will result in a tangible asset for the company. The labor budget is for those expenditures that have to be made throughout the course of the project, but not necessarily yield an asset. For example, in The Cheesecake Factory delivery service project, the budget for the delivery fleet would be considered part of the capital budget whereas the hourly wage for the delivery drivers or marketing materials would be considered the labor budget. Below are the budgets allocated for both capital and labor:

Capital Budget	Vendor	Amount	Total
210 Customized Delivery Vehicles (200 locations, 10 spare)	Lugoff Toyota	25,000 per	$5.25 M
Warming & Cooling bags for delivery vehicles (4 per location)	Amazon	$20 per bag	$16,000
			$5.27 M
Labor Budget	Amount	Total
Marketing (flyers/radio/TV)	$30,000	$30,000
Background/driving checks	$50 per driver	$10,000
Delivery driver Insurance costs	$100/car/month	$20,000
Hourly wages (vary by market)	Average $10/hr, 5 hrs/day*200 locations	$300,000
		$360,000

Between the two, this yields a total project budget of $5.625 million. Purchasing in a bulk fleet has lessened the cost of the delivery fleet, and using existing relationship with current marketing partners will result in a lower cost there as well.

Project Scope and Schedule Aligned with Budget

The scope of this project includes the planning, execution, control and closing of the project to implement a delivery service within branches of The Cheesecake Factory. This project will not affect any ongoing policies or procedures within current business operations. The scope of the project includes establishing guidelines/minimums for delivery orders, establishing delivery routes, contracting with a vendor for delivery vehicles, legal policies for insuring drivers and liability control, and budgeting for equipment such as warmers and coolers within the delivery cars to maintain product quality. The launch of the delivery service is scheduled to begin 8/15/16.

The above budget shall be submitted to finance for approval 6/1/16 per the schedule below as the budget is based on quotes received from potential vendors. Once approved, purchase orders to take delivery of the fleet by 7/31/16 will be submitted by 6/30/16. Additionally, once the labor budget is approved, marketing creation will commence to have launch materials ready and approved by 7/31/16.

Schedule Baseline and Work Breakdown Structure

Milestone	ask	Team Member	Date
Initial Project Meeting with Project Team	To determine information/resources needed	PM	5/23/2016
Budget Proposal to Finance	Submission of project budget to finance for approval	PM	6/1/2016
	Quotes from vendors vehicles	Operations
	Quotes from vendors warming/cooling units	Operations
	Quotes from legal if additional insurance needed	Legal
	Quotes for marketing materials	Marketing
	Final budget draft	Project Team
Purchase of delivery vehicles from vendor	Order placed to take delivery of vehicle fleet	Operations	6/30/2016
Legal requirements met	From an HR/liability perspective with delivery drivers employed	Legal	6/30/2016
Marketing campaigns launched	TV/radio ad creation	Marketing	7/31/2016
	Flyers/handout creation	Marketing
	Delivery materials ordered (bags, boxes, etc)	Marketing
	Advertising complete	Marketing
Staff hired/realigned	Hiring	HR	7/31/2016
	Pay scale creation	HR
	Background/driving record checks	HR
Initial Product Rollout	Begin delivery service	Locations	8/15/2016
Initial Results Review/Adjustments Made	After 3 months of the service, actual ROI, tweaks made where necessary	Project Team	12/1/2016
Project Complete	Final adjustments made to project, product complete and fully implemented	Project Team	12/31/2016

Project Risks and Budget of Contingencies

“A risk is anything that could adversely affect your schedule, costs, quality, or scope. That is, a risk may impact your PCTS targets. Simply put, either you manage risks or they will manage you” (Lewis, 2011). For The Cheesecake Factory delivery service project, the main risk is the delivery vehicle fleet not being delivered on time for the launch of the delivery service. Secondary risks include an accident involving a delivery driver that results in a liability for the company, and customer satisfaction not as high concerning food quality resulting in low use of the delivery service. The risk strategy used will be risk prevention. Risk monitoring for the primary risk of the fleet not being ready for delivery will be to maintain biweekly contact with the vendor, Lugoff Toyota, to ensure the product manufacturing is on target. Any possible delays identified during these communications will be adjusted accordingly in the project budget, schedule, and scope. All risks, primary and secondary, will be monitored on the risk register and updated regularly as the project develops.

Risk	Contingency Plan	Adjustment to Budget
Delivery Fleet not available for launch	Expect delivery by 7/31 for launch 8/15. If delivery not taken launch pushed back accordingly.	Loss of revenue in determining ROI, market materials will need to be adjusted for launch date
Accident liability	Rely on driving records for hiring	No impact to project budget, however could be loss to company if occurs
Decreased customer satisfaction	Customer surveys, what can be improved, offer frequent delivery customer discount rewards program	No impact to project budget

References

Lewis, J. P. (2011). Project planning, scheduling, and control: A hands-on guide to

bringing projects in on time and on budget. (5th ed.). New York, NY: McGraw-Hill.

Marks, Tony. 20:20 Project Management : How to Deliver on Time, on Budget and on

Spec. London, GBR: Kogan Page Ltd., 2012. ProQuest ebrary. Web. 30 May

2016.