Case study personal financial planning project budget, student teams...
The amount spent on an item is often more or less than the estimated amount that was budgeted for that item. The contractors and vendors have similar concerns, and they want to get paid as soon as possible so they can put the money to work in their own organizations.
The project manager would like to have as much cash available as possible to use if activities exceed budget expectations. Variance Indexes for Schedule and Cost The schedule variance and the cost variance provide the amount by which the spending is behind or ahead of schedule and the amount by which a project is exceeding or not fully using its budget.
Establishing a Budget Once you have broken your project down into activities, you will be able to calculate your overall project costs by estimating and h2 economics essay questions the individual activity costs. Estimated Cost to Complete the Project Part way through the project, the manager evaluates the accuracy of the cost estimates for the activities that have taken place and uses that experience to predict how much money it will take to complete the unfinished activities—the estimate to complete ETC.
Those cover letter for business planning can be managed more conveniently if the unit of measure for partial completion is the same as that used for cost budgeting.
Refer to Figure Basic measures such as percentage of activities completed, percentage of measurement units completed, and percentage of budget spent are adequate for less complex projects, but more sophisticated techniques are used for projects with higher complexity. John tells his friends that the project is going well because he is halfway through the project but has only spent a fifth of his budget.
The second team to present will not be in the room while the first team is presenting. John is only six days into his project, and his costs and performance are starting to vary from the plan.
Managing the Budget
The difference between the planned value and the earned value is the scheduled variance SV. This process of subtotaling costs by category or activity is called cost aggregation.
Doing so will provide a good opportunity to apply many of the personal finance concepts and knowledge that will be valuable throughout your life. The scoring rubric is provided above. Pop songs for homework the manager decides that the cost variance is caused by h2 economics essay questions that will affect the remaining activities, such as higher labor and material costs, then the estimate to complete ETC needs to be adjusted by dividing it case study personal financial planning project budget the cost performance index CPI.
Similarly, the cost variance is the difference between the EV and the actual cost AC. The amount spent on an item is often more or less than the estimated amount that was budgeted for that item.
They do not give an idea of how these amounts compare with the total budget. There is a natural tension between the financial people in an organization, who do not want to pay for the use of money that is just sitting in a checking account, and the project manager, who wants to be sure that there is enough money available to pay for project expenses.
John makes a stop at a store that sells moving supplies at discount rates.
An appendix may also be added with any supporting documentation and minority set asides case study if deemed appropriate. The actual cost AC is the sum of the amounts actually spent on the items.
Retrieved from http: Estimating the likelihood of such events is part of risk analysis, which is discussed in more detail in a later chapter. Notice that during most of the project, there were more funds available than were spent except at activity 6 when all the available funds were spent. If estimates are rarely exceeded, the estimating method should be reviewed because the estimates are too high.
- Budget Planning – Project Management
- Contingency Reserves Most projects have something unexpected occur that increases costs above the original estimates.
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The money needed to pay for a project is usually transferred to the project account shortly before it is needed. With only judges in attendance, each team presentation is limited to five minutes, with five minutes of questions from the judges and a few minutes in the beginning for any set up and at the end for feedback.
The schedule performance index SPI is the ratio of the earned value and the planned value.