This assignment consists of 2 parts: questions about budget estimation and developing a budget.
Part 1 Questions
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
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 ID Activity Immediate Predecessor Duration in days Resource Work Hours per Day
A Evaluate freezers 2 Alcides 6
B Chart temperatures 6 Joan 4
C Review service record 2 Alcides
D Consult with HVAC engineer A, B, C 3 Alcides
E Develop construction plan D 10 Joan
F Complete IC assignment E 2 Alcides
G Complete ROI analysis E 5 Joan
H Conduct regulatory review E 4 Joan
I Obtain construction approval F, G, H 2 Alcides
Part 3 Budget Estimating
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.
