Initial Postings: Read and reflect on the assigned readings for the week. Then post what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding in each assigned textbook chapter.
Your initial post should be based upon the assigned reading for the week, so the textbook should be a source listed in your reference section and cited within the body of the text. Other sources are not required but feel free to use them if they aid in your discussion.
Also, provide a graduate-level response to each of the following questions:
What benefits do budgeting processes bring to projects, and what weaknesses do they possess?
[Your post must be substantive and demonstrate insight gained from the course material. Postings must be in the student’s own words – do not provide quotes!]
[Your initial post should be at least 150+ words and in APA format (including Times New Roman with font size 12 and double spaced).
Book:
Watt, A. (2019). Project Management, 2nd Edition. BCcampus Open Education. Retrieved from https://opentextbc.ca/projectmanagement/Budget Planning
This work is licensed under a
Creative Commons Attribution 3.0
Unported
License (CC-BY).
Project Management
Chapter 12: Budget Planning
1
Budget Management
Importance
Estimating costs to compare and select
Methods of Estimating
Managing the Budget
Budget timeline
Budget variances
This work is licensed under a
Creative Commons Attribution 3.0
Unported
License (CC-BY).
Project Management
Chapter 12: Budget Planning
Importance of budget planning
Cost is one of the three project constraints
A budget is a plan or forecast
Cost management also includes tracking and managing variances from the planned expenditures
Detailed estimates are important
This work is licensed under a
Creative Commons Attribution 3.0
Unported
License (CC-BY).
Project Management
Chapter 12: Budget Planning
Estimating costs to compare and select projects
Payback, rate of return or NPV (or combine them)
Need accurate numbers but must balance with the cost of getting more accurate estimates
This work is licensed under a
Creative Commons Attribution 3.0
Unported
License (CC-BY).
Project Management
Chapter 12: Budget Planning
Estimating methods
Analogous estimate
Find a similar project or task and assume this one will be the same or similar
The more experience the estimator has, the better this works
Learn from each project
DPCI (Darnell-Preston Complexity Index) can help with benchmarking
Parametric estimate
Parameters such as number of square feet for a building; number of kitchens, bathrooms, etc. for a house.
Bottom-up estimating
Estimate each item or task and add them together
Generally more accurate but takes more effort to create
This work is licensed under a
Creative Commons Attribution 3.0
Unported
License (CC-BY).
Project Management
Chapter 12: Budget Planning
Estimating Guidelines
Don’t gold-plate: estimate what you expect, and meet that estimate.
This work is licensed under a
Creative Commons Attribution 3.0
Unported
License (CC-BY).
Project Management
Chapter 12: Budget Planning
Managing the Budget
Cash flow
Make a plan of WHEN the outflows will occur, and ensure that the money is available on time
Contingency reserves
For unexpected expenses that arise during the project
There are almost always some surprises, but can’t predict at the start what it will be
Project Manager does not allocate to the sub-projects but manages it centrally
Can be spent and still be within the original project budget
Management Reserves
For scope changes
Not likely to be spent; not part of project baseline
This work is licensed under a
Creative Commons Attribution 3.0
Unported
License (CC-BY).
Project Management
Chapter 12: Budget Planning
Reporting Progress:
Earned value management
Budgeted Cost of work Scheduled
BCWS
Detailed estimates for each activity in the project
Planned Value
PV
Total budgeted cost as of a certain date in the project
Earned Value
EV
B
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