Cost and Schedule Assignment Instructions
A project has an expected duration of 34 weeks with a critical path variance of 6. Suppose the project network is given and the critical path is identified on the network. Suppose the normal time, crash time, and the associated cost for each activity is given. You have been asked by your supervisor to prepare a research paper that addresses the follow criteria:
- What is the probability that the project will be completed in 32 weeks or less?
- If the project is to be shortened by four days, list the process you would take to determine which activities, in order of reduction, would be shortened and the resulting cost.
- Describe project cost and the requirements for it’s determination and application in a production facility.
- Analyze implications of changes in the parameters of project timing and cost determination.
- Evaluate application of project cost and timing concepts on a firm’s business operations.
Present your findings as a 1-2 page Word document formatted in APA style.
Cost and Schedule Sample Paper
A successful project can be identified based on how well its resources have been managed. This paper analyses various issues that arises during project development. The paper computes the probability of having the project shortened b two week, the process needed to reduce the project time, the project cost were aspects determining project costs are discussed and finally the evaluation of how project cost and time variation may impact the company managing the project.
What is the probability that the project will be completed in 32 weeks or less?
To determine the probability of completing the project within 34 days, given the project anticipated time and the project variance, the following formula will be employed. Z= (D-Te)/α. Where Z is times of standard deviation D is from Te. Te is the anticipated time and D is the new completion date to be evaluated. In this case, D is 34, Te is 36, and α is 6. Thus Z = (34-36)/6. This is equal to -2/6 = -0.3333. Based on the table of cumulative normal probability, P [Z≤0.33] = 0.3707. Thus the probability that the project could be completed within 32 weeks is 37%.
Shortening the Project Completion Time by 4 Days
In case the project is to be shortened by four days one need to determine the time needed to complete every activity. This should be flowed by drawing the project CPM and determining the project’s critical path. This should be followed by identifying the activities in the critical path that can be shortened at a reduced cost. While doing one should check on emergency of any other critical path when the one identified has been shortened, so as to shift the resources to it to ensure complete reduction of time at the least possible cost (Cleland & Ireland, 2006).
Each project incurs a considerable amount of money based on what it is, where it is carried out and how it is carried out. Similar projects can incur different cost based on their position especially to the required resources, labor and rental cost among others. Costing of a project is a main factor while making vital project decision. One need to understand all costs that can be incurred in a project. The five main project costs include sunk cost, fixed cost, variable cost, indirect cost, and direct cost. Direct costs refer to cost that are linked directly to doing the project work for instance software licenses purchase or employing specialized contractions. Indirect costs refer to costs which are not particularly connected to the project though they are cost of performing general business. This includes lighting, heating, or renting office space.
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Fixed costs refer to onetime costs which are not connected to the project length. Variable costs refers to costs incurred based on the project length, for instance the staff salaries. Sunk costs refers to cost incurred during the project development though have not shown any value towards the objectives of the project. Determining the project cost is very importance in enhancing the project budgeting and resources allocation. To determine the project cost, one must know the resources required which include human resources, machinery, software and raw materials, the quantity required and the duration to be used. It is also important to know the actual cost either per unit, or per time period. This can help in enhancing cost computation (Munns & Bjeirmi, 1996).
Changes in the Project Cost Determination and Timing Parameters
Change in timing parameters is likely to cause the project delay or early project completion. The two implications may results to increase in the project total cost. This is because, to reduce the project time, the project manager may need to increase some resources that include labor and machinery. Delay will also result to increase in variable cost due to increase in the operation time. Cost is also determined by time, change of market condition where cost of materials can increase or reduce, and the ability to control of risks. Delay increases cost, positive market shift may result to reduction of cost while negative shift may result to inflation. In addition, the project manager’s inability to control risks creates chances for calamities which may increase costs and completion time (Atkinson, 1999).
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Application of Project Cost and Timing Concepts on a Company’s Business operations
The project cost and completion time can be used to determine the project success. There are among the three traditional measures employed to judge the success of a project. A project is regarded to be successful if it attains its final scope in the anticipated time and without surpassing its budget. Increase in the project time results to the increase in the amount cost of project development. Delay which can emanate from many reasons can highly increase sunk cost and the variable cost, making it hard for the project to remain within the budget. Time reduction results to the need to increase resources which may also strain the budget. Although time can highly influence the budget, the cost increase can be independent and may not necessarily influence the change of project time. However, increase in the project scope can result to increase in the cost and the project time. When the project fails to be completed within the stated time and budget, then it creates unanticipated costs to the company. This results to straining of the company’s finances, which can bring great effect that may be hard to handle (Munns & Bjeirmi, 1996).
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