Project Planning and Budgeting

Cost estimating techniques

There are various tools available to estimate the cost of a project like,

  1. Expert Judgement
  2. Analogous Estimating
  3. Parametric estimating
  4. Bottom-up estimating
  1. Expert judgement: This is a cost estimate tool that uses the judgement of a specialized group to estimate the cost of the project.
  2. Analogous estimating: This is an estimating method, where we use the cost of the similar project to estimate the cost of a project.
  3. Parametric estimating: This is an estimating tool that uses the statistical relationship to estimate the cost of the project.
  4. Bottom-up estimating: This is an estimating tool where cost is estimated at the activity level of the project.

In the current scenario, we have used the bottom-up approach to estimate the cost of activities. The cost of activities that is mentioned in the case is at activity level. Later, the cost is divided into labor cost, material cost and other costs.

As we are following the bottom-up approach of cost estimation, we have allocated the resources to each of the activities of the project and the cost of resource is calculated for the activities. Below is the screenshot of the resource allocation and cost of resources.

ID

Task

Direct Labour

Direct Material

Other costs

Total

1

Project Management Initiation

       
 

Receive NTP

       
 

Broad activate conditions

4,800.00

8,750.00

3,750.00

17,300.00

 

Bond and Permit

4,288.00

14,148.40

6,063.60

24,500.00

2

Launch stage of site working

     
 

Clear and grub site

3,552.00

6,263.60

2,684.40

12,500.00

 

Rough grade site

2,688.00

4,306.40

1,845.60

8,840.00

 

Installation of storms drains

10,320.00

10,608.50

4,546.50

25,475.00

3

Foundation phase

     
 

Excavation

1,422.00

0.00

151.00

1,573.00

 

Backfill foundation

984.00

155.40

66.60

1,206.00

 

Installation of steel olumn

1,400.00

1,812.30

776.70

3,989.00

 

Placement of SOG

1,120.00

924.00

396.00

2,440.00

 

Installation of platform work

1,080.00

952.00

408.00

2,440.00

 

Installation of stair access

1,416.00

3,681.30

1,577.70

6,675.00

 

Installation of WF support beam

2,640.00

11,277.00

4,833.00

18,750.00

 

Installation of steel decking

2,752.00

2,531.90

1,085.10

6,369.00

 

Topping of concrete

3,720.00

3,397.10

1,455.90

8,573.00

4

Strucure development stage

     

0.00

 

Frame erection of rollup doors

2720

896

384

4,000.00

 

Erection of CMU walls 8"

19392

408.8

175

19,976.00

 

Installation of brick veneer

4704

10492.3

4,497

19,693.00

 

Installation of exterior window

2272

2567.6

1,100

5,940.00

 

Installation of storefront

850

0

714

1,564.00

 

Erection of steel structure

5880

25209.1

10,804

41,893.00

 

corrugated decking of steel roof

2192

18140.5

7,775

28,107.00

 

installation of rigid roof

2192

6481.3

2,778

11,451.00

 

Installation of roofing and flashing

5320

4340

1,860

11,520.00

 

installation of concrete coping

2272

11121.6

4,766

18,160.00

5

Interior phase

 

0

0

0.00

 

Installation of AHU

14040

-9828

-4,212

0.00

 

Frame creation of HM door

3120

27566

11,814

42,500.00

 

creation of steel stud

5200

-1435

-615

3,150.00

 

Installation of rough

 

4773.3

2,046

6,819.00

 

Rough wiring and panels

9728

11432.4

4,900

26,060.00

 

rough plumbing

3820

476

204

4,500.00

 

HVAC control device

3408

589.4

253

4,250.00

 

rough fire alarm

6944

7301

3,129

17,374.00

 

rough data/voice device

624

12737.9

5,459

18,821.00

 

rough pait

2816

968.8

415

4,200.00

 

hand ceiling grid

4928

2142

918

7,988.00

 

Rooms installation

       
 

Installation of lighting feature

3104

13029.1

5,584

21,717.00

 

Ceiling installation for registers and grillss

3480

539

231

4,250.00

 

Installation of grid ceiling tile

2088

4499.6

1,928

8,516.00

 

Installation of restroom cera,ic tiles

1992

3219.3

1,380

6,591.00

 

Installation of features of restroom plubming

2240

8792

3,768

14,800.00

 

Installation of toilet partition

2328

1814.4

778

4,920.00

 

Installation of toilat accessories

1392

592.9

254

2,239.00

 

Installation of wash basin

1552

663.6

284

2,500.00

 

installation of locker room

2328

3775.8

1,618

7,722.00

 

Break room case work

2240

-1218

-522

500.00

 

break room appliances

1552

401.1

172

2,125.00

 

installation of carpet base

2160

7179.2

3,077

12,416.00

 

Hand doors and hardware

4080

16611

7,119

27,810.00

 

finish mechanical

1992

93.1

40

2,125.00

 

finish electrical

1328

4137.7

1,773

7,239.00

 

training room installation of project

1248

526.4

226

2,000.00

 

installaiton of hand screens and whiteboards

960

1365

585

2,910.00

           

6

Site work finanlized

 

0

0

0.00

 

gate enclosure and dumpster

420

56

24

500.00

 

installation of ballards

4384

6619.2

2,837

13,840.00

 

fine grades of parking lot

1992

10059.7

4,311

16,363.00

 

parking curbs and gutter

4448

10202.5

4,373

19,023.00

 

parrking lot stripe and signage

2124

263.2

113

2,500.00

 

installation of sidewalks

2880

84

36

3,000.00

 

land scapings

4800

7140

3,060

15,000.00

 

erection of main entrance

4800

3640

1,560

10,000.00

7

Project completion

     
 

cleanup finalize

5320

0

0

5,320.00

 

inspection finalize

3472

0

0

3,472.00

 

work punch list

6944

2139.2

917

10,000.00

 

substantial completion

1176

0

0

1,176.00

 

certificate of occupance

3528

0

0

3,528.00

 

project completion milestone

     

6,72,698.00

The cost management plan is the outline of the budgeted cost of the project, allocation of costs, and the cost control measures adopted to complete the project as per the schedule framed. (Team Clarizen, 2018)

The cost management planning components of the current project is listed below:

  1. Resource Planning: We have allocated the no. of days and the resources to each of the activities. This process is known as resource planning.
  2. Cost estimation: The cost estimation for the project is done at activity level using the bottom up approach of cost estimation technique.
  3. Cost Budgeting: The total budget of the cost stands at $6,72,698.00 for 193 days.
  4. Cost control: This is the process where the cost spent is periodically is scrutanized against the budgeted cost. This is done in a regular interval to review the overall performance of the project. If there is any deviation, then the proper care should be taken and proper corrective action should be taken at the earliest possible.

The earned value approach technique uses the information from three independent sources of financial data. These are the cost baseline for the project that looks at the project from a different perspective.

  • Planned Value (PV): This looks at the expenditure planned for the project. It covers all the expenditure from the beginning to the end of the project.
  • Actual Value (AV): This looks at the present expenditure.
  • Earned Value (EV): This is the project progress that is originally planned expenditures for the work up to this time.

By using the earned value, we will determine the following figure to understand the status of the project.

  • Schedule Performance Index: SPI = EV/PV

SPI measures progress achieved against progress planned. A schedule performance index less than1.0 indicates less work was completed than was planned and the same value greater than 1.0 indicates that more work was completed than was planned.

  • Cost Performance Index (CPI): CPI = EV/AV

CPI measures the value of work completed against the actual cost. A cost performance index less than1.0 indicates that costs were higher than budgeted. CPI greater than 1.0 indicates that costs were less than budgeted.

  • Scheduled Variance: Difference between Earned Value – Planned Value

A negative schedule variance would mean that the project is behind the schedule.

  • Cost Variance = Earned Value – Actual Cost.

A negative cost variance means the project is not over budgeted and for the activities that have already taken place, the cost incurred is within the budget.

References for Project Planning and Budgeting

Team Clarizen. (2018). Clarizen. Retrieved August 15, 2020, from https://www.clarizen.com/cost-management-plan/#:~:text=In%20simple%20words%2C%20a%20cost,to%20complete%20all%20project%20activities.&text=The%20cost%20management%20plan%20in,be%20planned%2C%20funded%20and%20controlled.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Project Management Assignment Help

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