Project Management Online Tutoring on Vehicle Maintenance Facility
Project Cost Management Approach
Overview to Vehicle Maintenance Facility
The predefined case study discusses a hypothetical project for a vehicle maintenance facility. The project scope and budget has been fixed and established between the general contractor and the project owner as of project development. The prerequisite approvals for zoning and code have been attained, and the site is prepared to be commenced for the construction work. The activities from commencement to the completion of the project may be separated into the following activities:
- Preliminary work on-site prior commencing the construction work
- Launching the foundation by creating platforms, stair accesses, walls, and implementing underground electric ducts and plumbing
- Creating the core structure and covering the building under construction
- Working on the interiors of the office area and furnishing the office area based on the pre-requisites for toilets and employees
- Construction of service bays and their finishing.
- Final work on site: Completing work apart from office area and service inlets including landscaping and creating the main entrance indication.
- A certificate for occupancy will be acquired and the project might be marked as completed after conducting the final testing, inspection, and cleaning.
Costs Estimation
A number of inputs are needed in order to estimate the budget’s cost, which include:
- Resources needed
- Work breakdown structure
- Various resources rates
- Duration estimates of different tasks
Source: (Stamelos & Angelis, 2001)
Tools and Techniques used for Cost Estimation
Parametric modeling
The project attributes or parameters are utilized in a mathematical model for predicting the project costs in parametric modeling (Chan & Park, 2005). Models might be more complex or simple based on the project’s nature. For example, construction costs can be measured per square feet of commercial space in the existing project (Turrin, Von Buelow & Stouffs, 2011). There might be broad differences in the accuracy and cost of this technique. It is more appropriate in the situations when readily quantifiable parameters are utilized in the model; historical information are used for accurate development; and the scalable model for both small and large projects.
Computerized Tools
Software or spreadsheets for project management are some of the broadly utilized tools in order to estimate the cost of a project. These tools assist in streamlining the use of tools and techniques for providing quick facilitation in order to consider costing requirements (Patil et al., 2020).
Analogous Estimation
It uses actual cost findings from prior and current project on the basis to estimate the costs for the existing project. This tool aids in estimating the overall project cost in the presence of limited information about the project (Li, Xie & Goh, 2009). This technique is less accurate even though this technique can be based on two conditions. On the other hand, the actual similarity required expertise with the previous projects.
Bottom-up Estimating
It uses the cost estimation of individual items in order to summarize such individual measures to accomplish overall project cost. The accuracy and cost of this technique rely on the size of such items as both elevate when the work items are minimal.
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Cost estimation
Total cost of the project: $1162366.
Figure 1: Gantt chart for the project using project activities
Cost budgeting
Cost budgeting is conducted after executing a cost estimation. Assigning overall cost measures via different work activities separately and ascertaining a cost baseline is considered as cost budgeting for measuring project performance. The output of cost estimating as its input is based on cost budgeting. Following inputs are used for cost budgeting:
- Project schedule
- Work breakdown structure
- Cost estimates
Cost Management Roles and Responsibilities
Tools and Techniques for Cost Control
- Cost Change Control System: The procedures are devised to modify the cost baseline. The procedure encompasses of tracking systems, approvals, and paperwork to authorize the modifications.
- Performance Measurement: This technique aids in evaluating the extent of different variations occurred throughout the project development. This technique is beneficial for cost controlling.
- Additional Planning: There might be lesser projects that execute accurately under the planning. New or revised measures for costing or investigating different subsequent approaches are required for any new or prospective modifications.
- Computerized Tools: Different computerized tools are needed to predict the effects of modifications in cost planning including spreadsheets
Figure 2: Work Breakdown Structure
Cost Performance Measurements
Cost Management Plan
Project control procedures are inseparable to the project managers in the construction project as they serve the dual procedure of financial transaction recording and mentioning the project managers about the issues and progress of project. Interpreting the project accounts is often a complicated task until project completes, but it afterward becomes late for affecting project management. project control planning often aims for identifying project plan alternatives as compared to only recommending the potential cost-saving regions. A number of unpredictable modifications may delay the project, after project begins, and lead to the massive elevations in the budget and cost. Thereby, project control aids in maintaining the original design plans or mentioning any fluctuations from the planning. In addition, it becomes an essential activity, whereas cost management planning maintains a budget buffer for unparalleled cost overruns.
The construction and estimation plan of the related cash flows might be beneficial in order to provide a framework reference to monitor and control the corresponding tasks of the project. The follow-up of the project scheduling becomes essential for maintaining the project. Timely progress of individual tasks and accomplishing the milestone completion aid in monitoring the project plan based on the estimated costing. The final comprehensive cost estimation offers a baseline in order to assess the financial performance of the existing project.
The project budgeting can be explained as the original measure of the overall costing for different project activities. This project budget is utilized as a guide to plan cost management throughout the project completion of a process. The actual costings throughout the project are estimated in particular accounts for different job tests in order to compare each category with the original cost estimates. Thereby, fundamental units are represented in the cost of individual activities in order to control costs in a project.
Details on the pre-requisite material and the labor inputs needed in each job account are also mentioned and reserved in the budgeting of a project alongside with the cost amount. This aids to compare the exact use of labor and material resources to the anticipated necessities. This also aids in identifying cost overruns or savings by following the cost modifications in unit prices, the number of resources consumed or the labor productivity. The costs for different tangible and intangible resources are represented throughout the construction work, which include human resources, payroll, materials, and equipment used.
Cost Variance Response Process
Cost Control
The inquiry for positive and negative deviations is searched throughout the cost control in cost estimating and budgeting. Cost control ensures that the factors resulting in modifying the cost framework are effective for the project in order to determine the cost framework showing any modifications and actual changes.
Cost control encompasses of:
- Mitigation of incorrect, inappropriate, and unauthorized modifications in cost baseline.
- Confirming exact recording of all adequate modifications in cost baseline
- Estimation of deviations from the cost planning by revealing cost performance.
- Showing regulated modifications to adequate actors
Following are the inputs to cost control:
- Change request
- Performance reports
- Cost baseline
- Cost management plan
Quality Management
Quality management encompasses of the procedures and information required for guaranteeing the performance of the project up to the highest quality standards anticipated from this. It is also essential for understanding that the highest quality is not associated to the highest grade, and that there are authentic aspects part of quality management. Quality can be explained as the characteristic of something. The beginning of quality management is associated to the planning, scoping, implementing, and monitoring the quality of different project stages right from the commencing of different elements associated to the delivery of the project. This shows that the skill to manage and establish a team of individuals for achieving the qualitative objectives throughout a productive time and budget, and this would result in the quality production. This helps in the explanation of the parameters and processes and systems required for ensuring that the required quality is accomplished along with all parameters. This comprises of following different steps:
Managing quality: This encompasses the auditing procedures for ensuring that the quality standards are fulfilled
Control quality: This encompasses the development of predictors; helping in estimating the quality from the deliverables.
Plan quality management: This encompasses the selection of appropriate standards and the development of the exact quality management plan
Conclusion
The focus is to discuss the planning of cost and quality management associated to the project concerned with the Vehicle Manufacturing Facility. It is anticipated that this type of planning will be utilized in order to attain the preferred outcomes and ensure that the project planning is following the right platform. It is vital that the quality and cost elements have to be adequately implemented.
References
Chan, S. L. & Park, M., 2005. Project cost estimation using principal component regression. Construction Management and Economics , pp. 295-305.
Li, Y. F., Xie, M., & Goh, T. N. (2009). A study of the non-linear adjustment for analogy-based software cost estimation. Empirical Software Engineering, 14(6), 603-643.
Patil, R. B., Kothavale, B. S., Waghmode, L. Y., & Pecht, M. (2020). Life cycle cost analysis of a computerized numerical control machine tool: a case study from Indian manufacturing industry. Journal of Quality in Maintenance Engineering.
Stamelos, I. & Angelis, L., 2001. Managing uncertainty in project portfolio cost estimation. Information and Software Technology , 43(13), pp. 750-768.
Turrin, M., Von Buelow, P., & Stouffs, R. (2011). Design explorations of performance driven geometry in architectural design using parametric modeling and genetic algorithms. Advanced Engineering Informatics, 25(4), 656-675.
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