Project Management Assignment: Cost & Quality Management Plan for Remodelling Appliance
Question
Task: In this project management assignment, you are required to prepare full cost and quality management plan using the project information below.
In this project, the project team is to deliver the key project deliverables as in Table 1. The cost allocation of each project activity includes technical (30%), material (30%) and manpower (40%) of the budget lines below. The total budget of this project has been estimated as $3.35 million with the percentage allocation to each activity. However, the project activities still require 2 additional professional staff/activity as seen in Table 2 to be assigned extra into the estimated activity cost.
This project is implemented on the basis of 5 working days per week and 8 hours per day.
1.0 Cost Management Planning & Project Budget
1.1 Develop cost estimate of each activity using the project schedule that you developed in Assessment 1 Part B and the cost information provided above.
1.2 Create a detailed budget baseline (Scenario 1) of the project. Both cost estimates and a budget baseline must be produced in alignment with the estimated project schedule. You project budget baseline must present a 25% contingency with justification and development details of the budget contingency.
1.3 Apply the 3-point estimate to the critical activities on the conditions that the project operates in the worst-case and best-case scenarios fond in the provided Assessment 1 Part B case study. Present an impacted budget baseline (Scenario 2).
1.4 Critically compare both scenarios and describe two cost control tools or techniques that can assist with cost management and clearly demonstrate how they can be applied in this project.
2.0 Quality Management Planning
2.1 In your quality management plan, you must clearly define the project quality and identify the quality requirements of this project with clear explanation what they are and how to measure them.
2.2 Your quality management plan must have at least two quality management tools and clearly demonstrate how they can be applied in this project.
Answer
Cost Management Planning & Project Budget
The schedule has been prepared earlier can be used for allocating the resources needed for each project activity and thus, managing the daily activities. Following resource estimation outlined within the project management assignment has been conducted before estimating the project budget based on the information provided in the case study:
Following Resources allocation can be made for each of the activity as information provided in the case study and the resources assigned to each activitiy:
Table 0: resource allocation
Source: (created by author using MS project)
COST ESTIMATING WORKSHEET
|
Project Title: |
Appliance remodeling project |
Date Prepared: |
17/11/2021 |
1.a) Parametric Estimation
Since, the Budget in line allocation was predetermined in the case study along with the cost per unit of all the resources used for the different activities, the following estimation is based on considering same parameters (PMI, 2017). The total budget of the project is estimated to be $3.35 millions, the cost estimate of each activity is done by budget in allocation in percentage of total budget. Accordingly, number of units of each activity is estimated using the formula Cost estimate/Cost per unit.
|
Activity |
WBS ID |
Cost Variable |
Cost per Unit |
Budget Line Allocation (in %) |
Cost Estimate |
Number of Units |
|
A |
1.1 |
Sheila Thomas (Project Manager) |
27.5 |
15 |
502500.0000 |
18273 |
|
B |
1.2 |
Marty Green (Shop supervisor) |
12 |
4 |
134000.0000 |
11167 |
|
C |
1.3 |
Bob Hoskins (Industrial engineer) |
17.5 |
10 |
335000.0000 |
19143 |
|
D |
1.4 |
Kristin Abele (purchasing agent) |
23.5 |
6 |
201000.0000 |
8553 |
|
E |
1.5 |
Sally Reid (jr quality engineer) |
13.5 |
3 |
100500.0000 |
7444 |
|
F |
1.6 |
John Pittman (quality engineer) |
16.5 |
5 |
167500.0000 |
10152 |
|
G |
1.7 |
Lanny Adams (marketing manager) |
25 |
2 |
67000.0000 |
2680 |
|
H |
1.8 |
Carol Johnson (Safety engineer) |
32.3 |
7 |
234500.0000 |
7260 |
|
I |
1.9 |
Stu Hall (maintenance supervisor) |
16 |
3 |
100500.0000 |
6281 |
|
J |
1.1 |
Randy Egan (plant manager) |
37 |
25 |
837500.0000 |
22635 |
|
K |
1.11 |
Sheila Thomas (Project Manager) |
27.5 |
0 |
0.0000 |
0 |
|
L |
1.12 |
Bob Hoskins (Industrial engineer) |
17.5 |
5 |
167500.0000 |
9571 |
|
M |
1.13 |
Randy Egan (plant manager) |
37 |
3 |
100500.0000 |
2716 |
|
N |
1.14 |
Marty Green (Shop supervisor) |
12 |
0 |
0.0000 |
0 |
|
O |
1.15 |
Sheila Thomas (Project Manager) |
27.5 |
7 |
234500.0000 |
8527 |
|
P |
1.16 |
Randy Egan (plant manager) |
37 |
3 |
100500.0000 |
2716 |
|
Q |
1.17 |
Susan Berg (Cost accountant) |
22.5 |
0 |
0.0000 |
0 |
|
R |
1.18 |
Lanny Adams (marketing manager) |
25 |
2 |
67000.0000 |
2680 |
|
|
Total |
100 |
3350000 |
139798.983 |
||
Table 1: parametric Estimation
Source: (wysocki, 2013)
1.2 Analogous Estimates
|
WBS ID |
Previous Activity |
Previous Cost |
Current Activity |
25% contgency |
Cost Estimate |
|
1.1 |
None |
26.3 |
18272.7273 |
0.25 |
120143.1818 |
|
1.2 |
None |
11 |
11166.6667 |
0.25 |
30708.3333 |
|
1.3 |
None |
14.25 |
19142.8571 |
0.25 |
68196.4286 |
|
1.4 |
A |
19.75 |
8553.1915 |
0.25 |
42231.3830 |
|
1.5 |
D |
11.5 |
7444.4444 |
0.25 |
21402.7778 |
|
1.6 |
E |
14.5 |
10151.5152 |
0.25 |
36799.2424 |
|
1.7 |
F |
21.5 |
2680.0000 |
0.25 |
14405.0000 |
|
1.8 |
G |
28 |
7260.0619 |
0.25 |
50820.4334 |
|
1.9 |
H |
12 |
6281.2500 |
0.25 |
18843.7500 |
|
1.1 |
G |
30.25 |
22635.1351 |
0.25 |
171178.2095 |
|
1.11 |
J |
24 |
0.0000 |
0.25 |
0.0000 |
|
1.12 |
K |
14.5 |
9571.4286 |
0.25 |
34696.4286 |
|
1.13 |
L |
30 |
2716.2162 |
0.25 |
20371.6216 |
|
1.14 |
M |
11.5 |
0.0000 |
0.25 |
0.0000 |
|
1.15 |
M |
24 |
8527.2727 |
0.25 |
51163.6364 |
|
1.16 |
N |
32.6 |
2716.2162 |
0.25 |
22137.1622 |
|
1.17 |
P |
16 |
0.0000 |
0.25 |
0.0000 |
|
1.18 |
Q |
20 |
2680.0000 |
0.25 |
13400.0000 |
|
Total |
716497.5885 |
||||
Table 2: Analogous Estimation
Source: (wysocki, 2013)
1.3 Three-point estimates
|
WBS ID |
Optimistic Cost (O) |
Most Likely Cost (M) |
Pessimistic Cost (P) |
Weighting Equation E= (O+(4*M)+P)/6 |
Expected Cost Estimate(E*Number of units) |
|
1.1 |
24.5 |
28.25 |
33.25 |
28.4583 |
520011.3636 |
|
1.2 |
10.25 |
14 |
16.5 |
13.7917 |
154006.9444 |
|
1.3 |
13.25 |
19 |
21.5 |
18.4583 |
353345.2381 |
|
1.4 |
18.5 |
24.5 |
26.75 |
23.8750 |
204207.4468 |
|
1.5 |
10 |
14.5 |
18.5 |
14.4167 |
107324.0741 |
|
1.6 |
11.5 |
17 |
21 |
16.7500 |
170037.8788 |
|
1.7 |
20 |
24 |
28.25 |
24.0417 |
64431.66667 |
|
1.8 |
26 |
32 |
36 |
31.6667 |
229901.9608 |
|
1.9 |
20 |
23 |
24.8 |
22.8000 |
143212.5 |
|
1.1 |
35 |
36.5 |
39 |
36.6667 |
829954.955 |
|
1.11 |
20 |
26.5 |
30 |
26.0000 |
0 |
|
1.12 |
12.5 |
16.75 |
21.25 |
16.7917 |
160720.2381 |
|
1.13 |
27 |
32.25 |
37 |
32.1667 |
87371.62162 |
|
1.14 |
14 |
15.75 |
16.5 |
15.5833 |
0 |
|
1.15 |
20 |
26 |
29.5 |
25.5833 |
218156.0606 |
|
1.16 |
30 |
35 |
39.75 |
34.9583 |
94954.39189 |
|
1.17 |
17.5 |
19 |
25.5 |
19.8333 |
0 |
|
1.18 |
18 |
25 |
28 |
24.3333 |
65213.33333 |
|
Total |
3402849.6738 |
||||
Table 3: Three-Point Estimation
Source: (wysocki, 2013)
Cost Management Plan
|
|
Project Title: |
Appliance remodeling project |
Date: |
17/11/21 |
|
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|
Level of Accuracy: |
Units of Measure: |
Control Thresholds: |
|
||||||
|
20% level of accuracy |
The estimation of cost is done in AUD Considering budget in millions, the estimation is done upto four decimal values. |
Plus minus +-10% |
|
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Rules for Performance Measurement: |
|
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Remodeling design and development contract with production factory Contract between the supplier and the seler (or retailers) (Pensar, 2010). Acknowledgement of the project team to deliver deliverables meeting or exceeding the set baseline |
|
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Cost Reporting and Format: |
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Hard copy of expenditures with baseline and soft copy using spreadsheet must be shared with the respective leaders weekly. It should contain the estimated baseline cost, ongoing cost, and possible deflections from the original plan. |
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Process Management: |
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|
Estimating costs |
As competed above, three different estimation approaches included parametric, analogous, and three-point estimation techniques have been used. |
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Developing the budget |
The final selection will be made/ approved by the project manager on which estimation should be set as the baseline. |
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Updating, monitoring and controlling |
Project status report will be used for regulare update on the ongoing project activities and related constraints. Procurement management strategies for monitoring the progress of the project will be considered for monitoring the project progress and possible changes those will be needed for maintaining the determined course of project development. (Ainamo et al., 2010) Control strategies can be in place using the tools such as Excel spreadsheet, MS project and others can be in place for managing the strategies. |
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Table 4: Cost Management Plan
Source: (Snyder, 2013)
1.4 Cost Control Techniques
1. Keeping track of costs, expenditures, and remaining balance will be helpful in assuring that the project is neither under budget nor over budget. This can be put in the project status report and discussed with important stakeholders of the project for possible changes and effective management control over rest of the activities.
Earned value management will allow quantitative analysis of the project development and necessary changes need to be made for assuring final budget of the project is neither over budget nor under budget.
2.0 Quality Management Planning
2.1 QUALITY MANAGEMENT PLAN
|
Project Title: |
Appliance remodeling project |
Date Prepared: |
17/11/21 |
Quality Rolesand Responsibilities
|
Roles of Human Resources |
Responsibilities |
|
Safety engineer |
Maintain safe workplace environment during the production of new model appliance |
|
Project Manager |
Assure that all the project team members are fulfilling their responsibilities and project is undergoing as per planning |
|
Industrial engineer |
Production of the remodeled appliance |
|
Plant manager |
Handle and operate the equipments and tools used at the production factory |
|
Cost accountant |
Regular estimate and track the budget of project |
|
Maintenance supervisor |
Maintain the daily operational activities and related equipments used for completing the project |
|
Quality engineer |
Assure the baseline quality of the project is met or exceeded the estimation |
|
Quality Planning Approach: A proper planning must include the scope of the quality that should be their for the different criteria of the remodeled appliance. It should cover all the phases of the project assuring that every phase/activity is being managed and delivered as per planning (Heldman, 2013). There should be proper dates for auditing the quality measurements or key performance indicators at the different milestones/ tages to make sure that the project progress is meeting the devised baseline. |
|
|
Quality Assurance Approach: There should be regular monitoring of the organizational objectives, project scope, and the project development to assure the estimated project deliverables are delivered on time and within budget. Tools such as total quality management, internal and/or external audits, and obserrvations can be used. |
|
Quality Control Approach: Devise and depoy the changes in the project panning to make sure that future activities’ contraints alteration will have positive impact on the overall project outcomes (PMI, 2017). It assures that the changes considered for handling the project deflections are being deployed in effective way. |
|
Quality Improvement Approach: Decision making stage for successfully managing the quality of the project. This approach must consider the needs and requirements of the end consumers and make sure to align them with the organizational objectives to meet or exceed the minimum expectations of the customers. |
Table 5: Quality Management Plan
Source: (Snyder, 2013)
2.2 Quality Management Tools
a) Check sheet will allow listing the key elements that must be there to assure good quality. Manager/ supervisor can do the checklist task to make sure that all the parameters of better quality is being achieved.
b) Cause and effect diagram tool can be used for identifying the root cause of certain issue that caused delay in the project progress. It allows the auditor/ manager to consider the different factors causing the issue and thus, reaching at the root cause to mae necessary decisions that best suits the project development.
References
Ainamo, A., Artto, K., Levitt, R. E., Orr, R. J., Scott, W. R., &Tainio, R. (2010). Global projects: Strategic perspectives. Scandinavian Journal of Management, 26(4), 343–351.
Heldman, K. (2013). PMP Project Management Professional Exam Study Guide (7th ed.). Indianapolis, IN: Wiley.
Pensar, S. (2010, August 17). Five challenges in global projects. Retrieved from https://www.itforbusiness.org/article/five-challenges-in-global-projects/
Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK Guide®) (5th ed.). Project management assignmentNewtown Square, Pennsylvania: Project Management Institute.
Project Management Institute. (2017). A guide to the project management body of knowledge (PMBOK Guide®) (6th ed.). Newtown Square, Pennsylvania: Project Management Institute.
Snyder, C. S. (2013). A project manager’s book of forms: A companion to the PMBOK guide (2nd ed.). Indianapolis, IN: Wiley.
Wysocki, R. K. (2014). Effective Project Management:
Traditional, Agile, Extreme (7th ed.). Indianapolis, IN: Wiley.
