Unit 4 IP - Cost Methods and Tools

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fcbatrobo124

Business Finance

Description

1,250–1,800 words with 10 total pages, including 2 empty sections

Assignment

You are now ready to apply costing methods, tools, and techniques to your project. There are many of these available to assist you in determining your overall budget, as well as to estimate the durations for individual tasks. These methods could include the following:

  • Expert judgment
  • Analogous estimating
  • Parametric estimating
  • Bottom-up estimating
  • Three-point estimating
  • Reserve analysis
  • Cost of quality
  • Project management estimating software
  • Vendor bid analysis

You will be responsible for using your plan that you developed in Weeks 2 and 3 to estimate your budget for your key assignment project. You should apply 2 of the above methods to determine a worst-case scenario budget. Please put your calculations in a spreadsheet similar to the following:

Deliverables

The following are the overall project deliverables:

  • Update the Key Assignment document title page with a new date and project name.
  • Update the previously completed sections based on the instructor's feedback.
  • Create the following new section:
    • Costing Methods and Tools
      • Select 2 of the costing methods, and discuss why they will support developing a realistic budget.
      • Provide an example of computations for a few of the activities for the 2 selected methods.
      • Fill in a table similar to the example table so that your 2 different total project budgets are based on the 2 selected methods.
      • Discuss what type of contingency budget you will put in place based on the 2 budgets to mitigate an underestimation.
  • Name the document "LastName_FirstName_MPM434_IP4.doc" (Note that this is the same document that will be submitted as the Key Assignment draft).

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Explanation & Answer

Attached.

Running head: ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT

Acquisition Project Scheduling and Cost Management Plan
Student’s name
Institution
Date

1

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN

2

Table of Contents
Project Outline (TBD)..................................................................................................................... 3
Description of the Project ........................................................................................................... 3
Overall Project Deliverable......................................................................................................... 3
Cost, Schedule, and Technical Performance Management ............................................................. 5
Cost Techniques .......................................................................................................................... 5
Project Schedule for the Acquisition Component....................................................................... 5
Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) ............ 6
Key schedule influencers ............................................................................................................ 8
Management of Small Projects (TBD) ........................................................................................... 9
Project Schedule.......................................................................................................................... 9
Project Gantt chart .................................................................................................................... 10
Critical Path .............................................................................................................................. 10
Project Processes ....................................................................................................................... 10
Initiation ................................................................................................................................ 11
Planning ................................................................................................................................ 11
Executing .............................................................................................................................. 11
Monitoring, and Controlling ................................................................................................. 12
Closing .................................................................................................................................. 12
Acquisition Project Guidelines ..................................................................................................... 13
Acquisition Project Activities ................................................................................................... 13
Request for Proposal Template ................................................................................................. 15
Vendor Evaluation Criteria ....................................................................................................... 15
Vendor Status Update Process .................................................................................................. 16
Costing Methods and Tools (TBD)............................................................................................... 18
Earned Value Management System (TBD) .................................................................................. 19
Overall Cost and Schedule Performance (TBD) ........................................................................... 20
References ..................................................................................................................................... 21

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN

3

Project Outline
Description of the Project
Sweet Star Bakers is a small bread-baking company based in Knoxville, Tennessee and
have been in existence for the last ten years. Sweet Star bakes fresh bread under brands Sweet
Bread and Star Buns and has been quite successful within the Knoxville metropolitan. However,
the company has found little success outside the metropolitan area despite an effort by the
company owners to expand the company outside Knoxville. While the company’s product has
been a huge success within the city, it has found it hard to compete with national bakeries in
recent years which have used their efficiency to produce low-cost bread and buns.
Facing the fear of bankruptcy, the owners have decided to sell the company to one
Tennessee top bakers. Top Bakers, one of the most successful and competitive bakers in
Tennessee has expressed the willingness to acquire Sweet Star Bakers from its current owners.
With distribution across Tennessee and neighboring states, Top Bakers investors believe that
they have the capacity to turn around the fortunes of Sweet Star Bakers especially in Knoxville
through links they have established over the years. Sweet Star Baker have also expressed an
interest in selling the business to Top Bakers. For this project, we shall review the acquisition of
Sweet Star Bakers by Top Bakers taking into consideration the cost, schedule, and technical
performance management involved in the process.
Overall Project Deliverable
The overall objective of this project is to successfully plan and see the successful
purchase of the Sweet Star bakers by Top Bakers. This will be achieved by performing a detailed
costing, developing an acquisition schedule, and undertaking a technical performance

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN
management. Through this detailed plan, we shall see the acquisition purchase of Sweet Star
Bakers by Top Bakers.

4

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN

5

Cost, Schedule, and Technical Performance Management
Cost Techniques
There are various means of determining and controlling project costs as recommended by
the Project Management Institute (PMI). One of these methods is the Earned Value
Management. Earned Value Management (EVM) is a mathematical method by which you can
measure the actual performance of a project. The model is use to monitor the project in terms of
schedule and cost. Forecasting is another costing technique that is adopted for projects. As a
project manager, having the ability to tell whether a project will be delivered on-time and onbudget is critical (Institute, 2017).
Forecasting is used to determine the actual cost of the project on completion based on the
current actual performance and take measures to rectify any anomaly before it is too late.
Variance analysis is the other technique and involves the comparison of expected project
performance to the actual cost performance. This analysis helps a project manager to understand
the causes of variance, if any (Institute, 2017). Preventative and corrective actions are
determined based on the variance analysis.
Project Schedule for the Acquisition Component
The acquisition of the business will be conducted over a period of four months. This
period will see the complete acquisition of the Sweet Star Bakers by Top Bakers. The process
will entail cost evaluation on the first task category, and technical performance management on
the second task which will be followed by the total accusation of the business.

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN

Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM)

The above Program Evaluation and Review Technique will be followed for this project.

6

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN

7

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN

8

Key schedule influencers
The project management term influencer refers to the particular person, group, or
individual who, while not directly related to the project in question, not a member of the specific
project team or a project team leader, and not a financial representative of the company that may
be financially responsible for the project, nevertheless for one reason or another may bear
significant influence or weight on the project in general, or to the acquisition and purchase of a
number of activity related products and services in general (Institute, 2017). One of the key
project schedule influencers are the current customers of Sweet Star Bakers.
The project must be undertaken in a manner that they are not lost (Institute, 2017).
Retaining them would be to the best interest of the new business and therefore measures should
be put in place to guarantee their preservation. To ensure these current customers are not lost, the
transition and branding of products initially produced by Sweet Star Bakers will be conducted in
a progressive manner. Another key project influencers are the different government authorities
who have to give authorization of the take-over. Without their approval, the take-over process
might be delayed.

ACQUISITION PROJECT SCHEDULING AND COST MANAGEMENT PLAN

9

Management of Small Projects (TBD)
Unlike large projects, small projects require the project team to undertake the project with
limited resources and time. In the acquisition of the Sweet Star Bakers by Top Bakers, the team
project will have to undertake the project within a period of one month and with...


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