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Project Planning and Budgeting

Table of Contents

2.1 Cost management planning.

Set of cost estimating tools.

A budget of the project

Components of cost management planning.

Analysis of cost control tools.

2.2 Quality management planning.

Components of quality management planning.

A framework of quality management

Reference List

2.1 Cost Management Planning

Set of Cost Estimating Tools

In estimating the cost for a vehicle maintenance project planning there is a requirement of various types of activities that include in the process of maintenance. The activities such as safety, management, accounting, and quality, sales and purchasing are the important resources which are involved in the maintenance of the vehicle. Folwing are some of the cost estimating tool that helps to find the cost estimation of activities which are involved.

Analogous Estimating

In this process, the estimation of the project cost is done based on a similar project that has already been done by the organization. This technique analyses various components such as time, size, scope, complexity and the duration of similar type project for generating estimation. Karp (2018), has suggested that this is the most attractive estimating techniques that help in managing complex activities of a project.

Parametric Estimating

This estimating technique uses an algorithm to find the cost that is required for completing a project. The historical data and variables of the projects are evaluated to create a statistical relation. As recommended by Juszczyk (2017), this estimation mostly uses the regression method to calculate the required cost for a project. Moreover, this estimation can be done for the whole project or for partial activities.

Project management estimating software

There are different types of project management software that can be used for managing the cost estimation of the project such as software applications, statistical tools and spreadsheets to estimate the budget for a project. This help finding the activities in which the cost will be required in a project. The machine learning algorithms are also used in these tools which help in finding accurate activities for the project (Pospieszny, Czarnacka-Chrobot & Kobylinski, 2018). This provides near proximity for the budget of the project which increases the quality also.

A Budget of The Project

The total cost of the project is 657,981 AUD; therefore, the estimation needs to be done based on this cost. Below is the budget for this project. This budget has been made based on the marketing and accounting resources of the project.

Name of the activities

Cost (in AUD)

Foundation

(21168)

Cost for excavate for service Pit

1573

Cost for Install steel columns in Service Pit

3989

Cost for excavate for Service Pit

1206

Activities of service Pits

14400

Cost of land and building

50000

Initial Site Work

(37500)

Install storm drains

10000

Rough grade site

50000

Clear & grub site

10000

Structure and Envelope

160192

Project Mangement

(41800)

Bonds and Permits

24500

Receive NTP

10000

Bonds and Permits

17300

Interiors

29836

Final site work

21168

Project close out

12500

Total cost estimation

657981

Table 2: Project budgeting

(Source: self-developed)

Components of Cost Management Planning

The key components of the cost management planning need to have cost variance, an appropriate approach, proper estimation, cost baseline, cost control processes and project budgeting. These components are required to be met in a project so that the project can be done as per planning without any interruption. As suggested by Henri, Boiral & Roy (2016), the components of cost planning help in tracking the expenditures of the project so that the project does get stuck in the middle. The components are used in the project to maintain the cost of the project so that the budget should not get exceeded. This will help in controlling the cost required for the project. This planning helps in measuring the costs required in a project through the help of project controlling tools.

Components

Resources

Planning

Cost variance

Accounting

The resources accounting and mangement are used in the components of the cost planning by which proper cost of the project can be presented. This help in increasing the sustainability of the project.

Appropriate approach

Mangement

Proper estimation

Accounting

Cost baseline

Accounting

Cost control processes

Management

Project budgeting

Management

Table 3: Resources used in cost planning

(Source: self-developed)

Analysis of Cost Control Tools

Cost control helps in improving the planning process of a project. This motivates the employees of the project to do their works on time with maintaining a proper budget. This helps in achieving the objectives of the project in a swift manner. There various types of cost controlling tools that are used in project management. These tools help to make the proper decision that will be efficient for the project (Omotayo, Bankole & Olubunmi, 2020). Budget planning, cost tracking, time management, project change controlling and earn value analysis are the main tools that are used for controlling the cost of a project. Analyses of some of the tools are mentioned below.

Project change controlling tool

This tool helps in managing the stakeholder’s decisions in the middle of the project. This helps the management team to understand the changes and analyse the budget so that the change can be applied easily in the project. The changes that need to be applied in the project should be reviews properly by which there should not be any shortfall in the budget that has been estimated.

Time management

Time management is another tool that helps in controlling the cost of the project because if the time gets exceed then automatically the daily expenses will get increased. This affects the budget of the project. Therefore, proper management of time is required to be maintained in a project to manage the cost and activities properly. As mentioned by MohdYusof et al., (2016), time provides a goal for the project team that needs to be followed and maintained to deliver a quality project. This also helps in customizing the activities as per the requirement of the clients and stakeholders of the project by maintaining the cost of the project.

Earn value analysis (EVA)

In this project of vehicle maintenance, the EVA method has been used for controlling the cost. This EVA helps in measuring the amount of work that has been actually performed in the project apart from the schedule and estimated cost. This provides the measurement of progress in the project sot that the project manager can estimate the total cost and time that will be required in completing it (Bryde, Unterhitzenberge & Joby, 2018). In this analysis, a plan for the project needs to be done so that the project can progress according to the planned manner maintaining the scope of the project. The EVA is done based on the three elements of cost in a project.

Elements

Analysis

Planned Value (PV)

In the initiation of the project rough planning is done with the project team and the stakeholders. In this, a planning and an estimated budget for the project are decided. For this project, the planned budget is $ 55798.

Earned Value (EV)

This is the cost that is actually allocated for the project which is the total cost of the project. This is estimated by analysing all the requirements of the project. This is known as the budget cost of a project. In the maintenance project vehicle, the total cost is $ 657981 

Actual Cost (AC)

This is final or the actual cost that will be required in the project. This cost can be analysed by completing each task or after the completion of each task. This cost is known as the actual cost for the work that has been performed in the project.

Table 3: EV analysis

(Source; self-developed)

2.2 Quality Management Planning

Components of Quality Management Planning

This ensures the quality of the project that will be presented to the client as per their requirements. As stated by Lixandru (2016), planning of quality is done for gaining the best quality of the project so that the client can get impressed with the project outcome. For maintaining the quality in a project, some components are required to be followed so that the project works can get successfully done.

Roles and responsibilities

In this, the quality test of the products that will be used in the project is measured by a third party. This helps in describing various roles of quality present in the project

Completeness and correctness criteria

This helps in finding the criteria of the customers up-front to gain their requirements and deliver the project successfully. This helps in completing a task in the project by meeting all the requirements of the customers.

Quality requirements process

This helps in meeting the expectations of the customers by maintaining a good quality so that they get satisfied.

Quality assurance activities

In a project, a quality assurance program needs to be implemented as it provides loyal and gains the trust of the customers. 

Quality control activities

This verifies the deliverables of the project continuously by which the major quality control processes are managed in the project.

Quality standards

This can be generated from a previous project of the organization so that they can shoe their standards in maintaining quality.

Quality tools

A quality management framework needs to be designed for this project by delivering it to the customers by maintaining proper satisfaction.

A Framework of Quality Management

In maintaining quality of a project the project team needs to flow four steps so that the quality of the project can be analysed easily. For this, the “Plan-Do-Check-Act” cycle is followed so that the deliverables of the project can be maintained with proper quality. In this framework, the planning is done if there is an improvement required in the project (Realyvásquez-Vargas et al., 2018). After the changes get identified then there’s a requirement of doing the changes on a small scale to trial the change in the project. Next, if the changes are suitable and working in the project, then there is a requirement of investigating the process by which the quality can be managed. Lastly, the act defines the benefits that a project is getting by the implementation of change. This framework helps in measuring the consistency of the project performance by maintaining proper quality.

Reference List for Strategic Cost Management and Performance

Abnane, I., &Idri, A. (2018, September).Improved analogy-based effort estimation with incomplete mixed data. In 2018 Federated Conference on Computer Science and Information Systems (FedCSIS) (pp. 1015-1024). IEEE. Retrieved from: https://annals-csis.org/proceedings/2018/drp/pdf/95.pdfRetrieved on: 05/08/2020

Bryde, D., Unterhitzenberger, C., & Joby, R. (2018). Conditions of success for earned value analysis in projects. International Journal of Project Management, 36(3), 474-484. Retrieved from: http://researchonline.ljmu.ac.uk/id/eprint/7677/3/Conditions%20of%20Success%20for%20Earned%20Value%20Analysis%20in%20Projects.pdfRetrieved on: 05/08/2020

Henri, J. F., Boiral, O., & Roy, M. J. (2016). Strategic cost management and performance: The case of environmental costs. The British Accounting Review, 48(2), 269-282. Retrieved from: https://corpus.ulaval.ca/jspui/bitstream/20.500.11794/10948/2/Strategic%20cost%20management%20and%20performance%20The%20case%20of%20environmental%20costs.pdfRetrieved on: 05/08/2020

Juszczyk, M. (2017). The challenges of nonparametric cost estimation of construction works with the use of artificial intelligence tools. Procedia engineering, 196, 415-422. Retrieved from: https://pdf.sciencedirectassets.com/278653/1-s2.0-S1877705817X00283/1-s2.0-S1877705817330904/main.pdf?X-Amz-Security- Retrieved on: 05/08/2020

Lixandru, C. G. (2016). Supplier quality management for component introduction in the automotive industry. Procedia-Social and Behavioral Sciences, 221, 423-432. Retrieved from: https://cyberleninka.org/article/n/641983.pdfRetrieved on: 05/08/2020

MohdYusof, S. A., MohdRadzi, S. H., Syed Din, S. N., & Khalid, N. (2016).A study on the effectiveness of a board game as a training tool for project management. Journal of Telecommunication, Electronic and Computer Engineering, 8(8), 171-176. Retrieved from: http://repo.uum.edu.my/20518/1/JTEC%20%208%208%202016%20171%20176.pdfRetrieved on: 05/08/2020

Omotayo, T., Bankole, A., & Olubunmi Olanipekun, A. (2020).An Artificial Neural Network Approach to Predicting Most Applicable Post-Contract Cost Controlling Techniques in Construction Projects. Applied Sciences, 10(15), 5171. Retrieved from: https://www.mdpi.com/2076-3417/10/15/5171/pdfRetrieved on: 05/08/2020

Pospieszny, P., Czarnacka-Chrobot, B., & Kobylinski, A. (2018).An effective approach for software project effort and duration estimation with machine learning algorithms. Journal of Systems and Software, 137, 184-196. Retrieved from: https://www.researchgate.net/profile/Przemyslaw_Pospieszny/publication/321376756_An_effective_approach_for_software_project_effort_and_duration_estimation_with_machine_learning_algorithms/links/5a3432c50f7e9b10d842b083/An-effective-approach-for-software-project-effort-and-duration-estimation-with-machine-learning-algorithms.pdf Retrieved on: 05/08/2020

Realyvásquez-Vargas, A., Arredondo-Soto, K. C., Carrillo-Gutiérrez, T., &Ravelo, G. (2018).Applying the Plan-Do-Check-Act (PDCA) Cycle to Reduce the Defects in the Manufacturing Industry.A Case Study. Applied Sciences, 8(11), 2181. Retrieved from: https://www.mdpi.com/2076-3417/8/11/2181/pdfRetrieved on: 05/08/2020

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