Week 2 Assignment
Week 2 Assignment
Due on the August 26, 2020
Project Management Plan Baselines
[WLOs: 1, 2] [CLOs: 1, 2]
Prior to beginning work on this assignment,
Read Chapter 10 from the course textbook, Contemporary Project Management.
Review Chapters 7 and 8 from the course textbook, Contemporary Project Management
Download ProjectLibre to your computer:
o Open the web page, ProjectLibre (Links to an external site.).
o Notice the Download button under the heading, ProjectLibre. Select this button.
o Follow the three steps to download ProjectLibre to your computer.
Note: Sometimes you will be asked for information such as your email address. You can ignore or close these pop-ups. You do not need to register to use ProjectLibre.
Watch the ProjectLibre Demo (Links to an external site.).
In this assignment, you will create a project management plan (PMP) baseline, which includes a scope (including a WBS), a project schedule, and a project budget. This assignment will be divided into four major elements, along with their individual elements.
For your assignment,
Develop the scope document in MS Word. The scope document should:
o Create a scope description consistent with the authority granted in the project charter.
o List the project deliverables that will enable resolution of the current problems in the current logistics operation.
o Outline the acceptance criteria for each deliverable.
o Establish the projects limitations or boundaries.
o Summarize the change control process that will be used during the project.
Create an indented WBS for five to 10 intermediate tasks using ProjectLibre.
o Include within each intermediate task two to three sub tasks. Review the ProjectLibre Demo (Links to an external site.) video for additional help using ProjectLibre.
Note: Save your WBS in ProjectLibre.
Develop a project schedule using the WBS you have already created as the starting point. This should be completed using ProjectLibre. The project will start February of Year 0, and should finish in December.
Note: Save your project schedule, including the Gantt chart, in ProjectLibre.
The project schedule should:
Start on February 1st and complete before December 31st of the year you are taking this class. That will be Year 0.
Identify the precursor activities as necessary.
Sequence the activities.
Indicate a single start and end date for each task.
Create a project budget. You may create the budget in ProjectLibre or in MS Excel.
o If you choose MS Excel:
Copy your work in ProjectLibre to MS Excel:
Put the cursor in the upper-left box to darken all the columns, use CTRL C to copy the ProjectLibre content, and then paste into MS Excel.
Add another column for budget. Assign a budget to each task. You have full discretion to develop the budget subject to the following guidelines:
The total budget may not exceed $100,000.
Each task must be assigned a budget.
o If you choose ProjectLibre:
You have full discretion to develop the budget subject to the following guidelines:
The total budget may not exceed $100,000.
Each task must be assigned a budget.
You may submit the project schedule and the resource breakdown structure separately if you choose.
Note: Save all your ProjectLibre work in a PDF. You may also save the project WBS and schedule from ProjectLibre in a PDF file, and save the budget in MS Excel. Save the project schedule and budget in ProjectLibre and MS Excel, as you will use this information for your Week 3 assignment.
For Week 2, submit the scope MS Word document to Waypoint. Additionally, submit the WBS, project schedule, and budget from ProjectLibre in a PDF, or the WBS and Project Schedule from ProjectLibre in a PDF, and the budget in a MS Excel document to Waypoint.
The Project Management Plan Baselines paper
Must be three to four double-spaced pages in length (not including title and references and appendixes and formatted according to APA Style as outlined in the Ashford Writing Centers APA Style (Links to an external site.).
Must include a separate title page with the following:
o Title of paper (this should be titled, Project Management Plan Scope).
o Students name
o Course name and number
o Instructors name
o Date submitted
For further assistance with the formatting and the title page, refer to APA Formatting for Word 2013 (Links to an external site.).
Must utilize academic voice. See the Academic Voice (Links to an external site.) resource for additional guidance.
Must use at least one credible or industry source; however, it is optional in this assignment to use scholarly or peer-reviewed research in addition to the course text.
o The Scholarly, Peer-Reviewed, and Other Credible Sources (Links to an external site.) table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.
o To assist you in completing the research required for this assignment, view this Ashford University Library Quick n Dirty (Links to an external site.) tutorial, which introduces the Ashford University Library and the research process, and provides some library search tips.
Must document any information used from sources in APA Style as outlined in the Ashford Writing Centers APA: Citing Within Your Paper (Links to an external site.).
Must include a separate references page that is formatted according to APA Style as outlined in the Ashford Writing Center. See the APA: Formatting Your References List (Links to an external site.) resource in the Ashford Writing Center for specifications.
Week 2 Assignment
Due on the August 26, 2020
Project Management Plan Baselines
[WLOs: 1, 2] [CLOs: 1, 2]
Watch this video with Dr. McKay II, Associate Faculty of MBA, discussing part one of the assignment.
Transcript
Watch this video with Dr. McKay II, Associate Faculty of MBA, discussing part two of the assignment.
Transcript
Watch this video with Dr. McKay II, Associate Faculty of MBA, discussing part three of the assignment.
Transcript
Prior to beginning work on this assignment,
Read Chapter 10 from the course textbook,Contemporary Project Management.
Review Chapters 7 and 8 from the course textbook,Contemporary Project Management
Download ProjectLibre to your computer:
Open the web page,ProjectLibre(Links to an external site.).
Notice the Download button under the heading, ProjectLibre. Select this button.
Follow the three steps to download ProjectLibre to your computer.
Note: Sometimes you will be asked for information such as your email address. You can ignore or close these pop-ups. You do not need to register to use ProjectLibre.
Watch theProjectLibre Demo(Links to an external site.).
In this assignment, you will create a project management plan (PMP) baseline, which includes a scope (including a WBS), a project schedule, and a project budget. This assignment will be divided into four major elements, along with their individual elements.
For your assignment,
Develop the scope document in MS Word. The scope document should:
Create a scope description consistent with the authority granted in the project charter.
List the project deliverables that will enable resolution of the current problems in the current logistics operation.
Outline the acceptance criteria for each deliverable.
Establish the projects limitations or boundaries.
Summarize the change control process that will be used during the project.
Create an indented WBS for five to 10 intermediate tasks using ProjectLibre.
Include within each intermediate task two to three sub tasks. Review theProjectLibre Demo(Links to an external site.)video for additional help using ProjectLibre.
Note: Save your WBS in ProjectLibre.
Develop a project schedule using the WBS you have already created as the starting point. This should be completed using ProjectLibre. The project will start February of Year 0, and should finish in December.
Note: Save your project schedule, including the Gantt chart, in ProjectLibre.
The project schedule should:
Start on February 1st and complete before December 31st of the year you are taking this class. That will be Year 0.
Identify the precursor activities as necessary.
Sequence the activities.
Indicate a single start and end date for each task.
Create a project budget. You may create the budget in ProjectLibre or in MS Excel.
If you choose MS Excel:
Copy your work in ProjectLibre to MS Excel:
Put the cursor in the upper-left box to darken all the columns, use CTRL C to copy the ProjectLibre content, and then paste into MS Excel.
Add another column for budget. Assign a budget to each task. You have full discretion to develop the budget subject to the following guidelines:
The total budget may not exceed $100,000.
Each task must be assigned a budget.
If you choose ProjectLibre:
You have full discretion to develop the budget subject to the following guidelines:
The total budget may not exceed $100,000.
Each task must be assigned a budget.
You may submit the project schedule and the resource breakdown structure separately if you choose.
Note: Save all your ProjectLibre work in a PDF. You may also save the project WBS and schedule from ProjectLibre in a PDF file, and save the budget in MS Excel. Save the project schedule and budget in ProjectLibre and MS Excel, as you will use this information for your Week 3 assignment.
For Week 2, submit the scope MS Word document to Waypoint. Additionally, submit the WBS, project schedule, and budget from ProjectLibre in a PDF, or the WBS and Project Schedule from ProjectLibre in a PDF, and the budget in a MS Excel document to Waypoint.
The Project Management Plan Baselines paper
Must be three to four double-spaced pages in length (not including title and references and appendixes and formatted according to APA Style as outlined in the Ashford Writing CentersAPA Style(Links to an external site.).
Must include a separate title page with the following:
Title of paper (this should be titled, Project Management Plan Scope).
Students name
Course name and number
Instructors name
Date submitted
For further assistance with the formatting and the title page, refer toAPA Formatting for Word 2013(Links to an external site.).
Must utilize academic voice. See theAcademic Voice(Links to an external site.)resource for additional guidance.
Must use at least one credible or industry source; however, it is optional in this assignment to use scholarly or peer-reviewed research in addition to the course text.
TheScholarly, Peer-Reviewed, and Other Credible Sources(Links to an external site.)table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.
To assist you in completing the research required for this assignment, view this
Ashford University Library Quick n Dirty(Links to an external site.)tutorial, which introduces the Ashford University Library and the research process, and provides some library search tips.
Must document any information used from sources in APA Style as outlined in the Ashford Writing CentersAPA: Citing Within Your Paper(Links to an external site.).
Must include a separate references page that is formatted according to APA Style as outlined in the Ashford Writing Center. See theAPA: Formatting Your References List(Links to an external site.)resource in the Ashford Writing Center for specifications. 8/13/2020 Print Preview
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Chapter 10: Budgeting Projects Chapter Contents
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
Chapter 10
Budgeting Projects
Chapter Introduction
10-1 Plan Cost Management
10-2 Estimate Cost
10-2a Types of Cost
10-2b Accuracy and Timing of Cost Estimates
10-2c Methods of Estimating Costs
10-2d Project Cost Estimating Issues
10-3 Determine Budget
10-3a Aggregating Costs
10-3b Analyzing Reserve Needs
10-3c Determining Cash Flow
10-4 Establishing Cost Control
10-5 Using MS Project for Project Budgets
10-5a Developing a Bottom-Up Project Budget Estimate
10-5b Develop Summary Project Budget
10-6 PMP/CAPM Study Ideas
Chapter Review
Summary
Key Terms Consistent with PMI Standards and Guides
Chapter Review Questions
Discussion Questions
PMBOK Guide Questions
Exercises
Semester Project Instructions
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References
Chapter 10: Budgeting Projects Chapter Contents
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means –
graphic, electronic, or mechanical, or in any other manner – without the written permission of the copyright holder.
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Chapter 10: Budgeting Projects Chapter Introduction
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
Chapter Introduction
SB7/ Shutterstock.com
Chapter Objectives
After completing this chapter, you should be able to:
Core Objectives
Define project cost terms and tell how each is used in estimating project cost.
Compare and contrast analogous, parametric, and bottom-up methods of
estimating cost.
Create a time-phased, bottom-up budget for a project.
Technical Objectives
Show both summary and bottom-up project budget information with
cumulative costs using MS Project.
Behavioral Objectives
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PMBOK Guide
Topics:
Plan Cost Management
Estimate cost
Determine budget
Control cost
Chapter Outputs
Cost Baseline (Aggregated project
budget)
Describe issues in project cost estimating and how to deal with each.
I sold escalators and elevators for my first job out of business school. As part of my training,
before I was sent to the field, I would look over the estimates made by the sales staff. This
served to double-check their math so the company had confidence in their estimates. It also
served to teach me many of the little nuances that more experienced estimators used. I had
my training manuals, lists of standards, main methods of calculation, and so forth, but
learning from others experience instead of making all my own mistakes helped.
One of the last parts in my training was to spend eight weeks at the Denver branch to get
seasoned a little bit. Construction was booming in Denver during the late 1970s. In fact,
some days I needed to bid more than one job. The first part of putting together a bid was to
go the office where the requests for proposals, plans, specifications, and the like were
stored. Then, armed with that information, I would put together an estimate. Finally, the
actual bidding took placeusually over the phone. The problem was that creating a detailed
estimate would generally take at least half a day. If that was my only duty (it was not), I
would still have had a hard time when multiple jobs were let for bid on the same day.
Something had to give.
Every morning around 10 A.M., I met
the construction superintendent for
coffee. We would discuss each bid that
was due. What other job was it like?
How was it bigger or smaller than a
recently completed job? What features
did it include more or less than a
previous job? Did we make money on
that job? We used these questions to
compare an upcoming job to other
recently completed jobs. We would also
ask, What do we think our competition
will bid? By the end of the
conversation, we had determined our
strategy for bidding the job. If we won
the bid, we would complete a detailed
cost estimate to see if we were close.
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After my training, I was transferred to
Kansas City. Kansas City had less
construction than Denver. I had enough time to perform detailed cost estimates before I
submitted bids. Therefore, we were more certain that if we got the bid, we would have a
good chance of making money.
I worked for the same company in both cities. However, we used two very different methods
of estimating cost. Both made sense where they were used. In Denver, if we wanted to bid
every job (and you cannot win the job if you do not bid on it), we needed a fast method. In
Kansas City, we had the time to develop detailed cost estimates, and so we took the time.
There are many methods of estimating project costs and each has its place.
Timothy J. Kloppenborg
Chapter 10: Budgeting Projects Chapter Introduction
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means –
graphic, electronic, or mechanical, or in any other manner – without the written permission of the copyright holder.
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Chapter 10: Budgeting Projects: 10-1 Plan Cost Management
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
10-1 Plan Cost Management
This chapter starts with estimating project costs. Once the overall cost is estimated, the next
step is to develop the budget by aggregating the costs and determining the projects cash
flow needs. Project managers also need to establish a system to report and control project
costs. The final section of the chapter deals with how to use Microsoft Project to aid in cost
management activities.
Cost and schedule are closely related. Sometimes, the two move in the same direction. The
schedule is maintained by the use of resources, and resources expend parts of the budget.
For example, when a schedule calls for materials to be delivered, or for workers to perform,
money must be available to pay for the materials or workers. Sometimes, they move in
opposite directions. For example, if a project needs to be completed earlier than planned,
more money probably will need to be found to pay for overtime.
Plan cost management (process to determine how to plan, estimate, and control project
costs.) is the process to determine how to plan, estimate, and control project costs. Cost
planning entails developing a cost management plan for your project. The cost
management plan (a continuous activity which requires reforecasting and refinement of the
cost estimates throughout the project.) is a continuous activity which requires reforecasting
and refinement of the cost estimates throughout the project. The cost management
plan defines the cost baseline, modifies it whenever necessary, and uses it for monitoring
and controlling costs. On small projects, this can be as simple as ensuring accurate
estimates are made, securing the funding, and developing cost reporting procedures to
ensure that the money is spent correctly. On large projects, each of these processes can be
much more involved; in addition, developing and using accurate cash flow estimates
become critical. A project cost management plan includes descriptions, procedures, and
responsibilities for the following:
Costs included (such as internal and external, contingency, etc.)
Activity resource estimating
Cost estimating
Cost baseline
Budget determination
Cost control, including metrics, reporting, and change approvals
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A project cost management plan needs to be consistent with the methods of the parent
organization. In many organizations, project managers are provided with specific guidance
on setting up their cost management plan. The plan provides guidelines to the project
manager and other stakeholders to serve several purposes:
First and most fundamentally, it shows how to develop and share relevant, accurate,
and timely information on cost that the project manager, sponsor, and other
stakeholders can use to make intelligent and ethical decisions.
It provides feedback, thereby showing how the projects success is linked to the
business objectives for which it was undertaken.
It provides information at a detailed level for those who need details and at
appropriate summary levels for those who need that.
It helps all project stakeholders focus appropriately on schedule and cost
performance.
Chapter 10: Budgeting Projects: 10-1 Plan Cost Management
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means –
graphic, electronic, or mechanical, or in any other manner – without the written permission of the copyright holder.
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Chapter 10: Budgeting Projects: 10-2 Estimate Cost
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
10-2 Estimate Cost
Estimate cost (process of developing an approximation of monetary resources needed to
complete project activities.) is the process of developing an approximation of monetary
resources needed to complete project activities. Cost estimating is linked closely with
scope, schedule, and resource planning. To understand cost implications completely, a
project manager needs to understand what the work of the project includes, what schedule
demands exist, and what people and other resources can be used. When more of these
details are available, the cost estimates can be more precise.
The first principle in dealing with project costs is for the project manager to never lie to
himself. Many times, in dealing with project costs, the project manager will need to negotiate
with sponsors, customers, and other stakeholders. If he does not understand what the
project costs really are, he is just trading meaningless numbers. That is neither an effective
nor an ethical method of establishing and committing to sensible budgets.
The second principle in dealing with project costs is for the project manager to never lie to
anyone else. Since sponsors, customers, and other stakeholders can often drive hard
bargains, it is sometimes tempting to shade the truth to secure necessary funding. This is
wrong on two counts: First, it is ethically wrong. Second, as a practical matter, a project
managers reputation goes a long way for good or for bad. People are more inclined to work
with project managers who are viewed as being honest and trustworthy.
To estimate project costs accurately, the project manager must understand the various types
of costs, the timing and accuracy of cost estimates, the different methods that can be
employed to estimate costs, and a variety of cost-estimating issues.
Chapter 10: Budgeting Projects: 10-2 Estimate Cost
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means –
graphic, electronic, or mechanical, or in any other manner – without the written permission of the copyright holder.
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Chapter 10: Budgeting Projects: 10-2a Types of Cost
Book Title: Contemporary Project Management
Printed By: Washburn Kelly ([emailprotected])
2019 Cengage Learning, Cengage Learning
10-2a Types of Cost
Costs can be better understood by considering various types of classifications such as
those shown in Exhibit 10.1.
Exhibit 10.1
Comparison of Cost Terms
Fixed Variable
Direct Indirect
Recurring Nonrecurring
Regular Expedited
Internal External
Lease Purchase
Labor Material
Estimate Reserve
Source: Adapted from Kim LaScola Needy and Kimberly Sarnowski, Keeping the Lid on
Project Costs, in David I. Cleland, ed., Field Guide to Project Management, 2nd ed. (Hoboken,
NJ: John Wiley & Sons, 2004): 145147.
Fixed versus Variable Costs
Costs can first be classified as either being fixed or variable. Fixed costs (costs that remain
the same regardless of the size or volume of work.) are those that remain the same
regardless of the size or volume of work. For example, if you need to buy a computer for
your project, the cost is the same regardless of how much you use it. Variable costs (costs
that vary directly with the volume of use.) are those that vary directly with the volume of use.
For example, if you were building a cement wall, the cost of the cement would vary directly
with the size of the wall. To understand the importance of fixed versus variable costs, a
project manager ideally structures costs and the impact of changes on those costs. When a
project manager understands how big a project is likely to be, she will try to determine how
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to complete all of the project work at the lowest possible cost. On many projects, there are
choices of how to perform certain activities. Some of these choices reflect a high-fixed-cost
and low-variable-cost alternative such as buying an expensive machine that can make parts
with low variable costs versus a more manual process of inexpensive machines but high
labor costs. These choices require both some fixed and some variable costs. Ideally, the
cost curve for the expected project volume appears as shown in Exhibit 10.2. This reflects
the lowest possible total cost at the size the project is expected to be. Unfortunately,
problems may occur if the volume of the project work is substantially larger or smaller than
first expected. If the volume drops a little bit, the total costs may drop very little. If the
volume expands a little, the costs may go up significantly. Therefore, when considering fixed
and variable cost choices, it is important to understand the project scope.
Exhibit 10.2
Project Cost and Volume Curve
Direct versus Indirect Costs
A second classification divides project costs into direct and indirect costs. Direct costs
(costs that only occur because of the project and are often classified as either direct labor or
other direct costs.) are those that only occur because of the project and are often classified
as either direct labor or other direct costs. For example, direct labor includes workers who
are hired specifically to work on the project and who will be either assigned to a new project
or released when the project is complete. Other direct costs may include such items as
materials, travel, consultants, subcontracts, purchased parts, and computer time.
Indirect costs (cost that are necessary to keep the organization running, but are not
associated with one specific project.) are those that are necessary to keep the organization
running, but are not associated with one specific project. The salaries of the company
executives and the cost of company buildings, utilities, insurance, and clerical assistance
are examples. These costs are allocated among all of the projects and other organizational
and internal work that benefit from these resources. The methods of allocating these costs
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have evolved in recent years thanks to activity-based costing, as described in the cost
estimating issues section. Exhibit 10.3 shows both direct and indirect costs for a work
package.
Exhibit 10.3
Direct and Indirect Costs in a Work Package
PROJECT: ACCOUNTS
PAYABLE REFINEMENT
WORK PACKAGE:
INSTALL MODULE 1
Description:
Install accounts payable
refinement application and
related hardware.
Deliverable(s):
Installed and functioning accounts
payable module.
Cost Categories Quantity Total
Direct Labor
Programmer 120 hrs @ $ 75/hr 9,000
Systems Analyst 40 hrs @ $ 100/hr 4,000
Systems Architect 20 hrs @ $ 120/hr 2,400
Other Direct
Hardware 20,000
Software 8,400
Consultant Services 12,000
Direct Overhead (.6 * DL) 9,240
Total 65,040
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Source: Kevin P. Grant, University of Texas, San Antonio. Adapted with permission.
Recurring versus Nonrecurring Costs
The third cost comparison is recurring versus nonrecurring costs. Recurring costs (costs
that repeat as the project work continues, such as the cost of writing code or laying bricks.)
are those that repeat as the project work continues, such as the cost of writing code or
laying bricks. Nonrecurring costs (costs that happen only once during a project, such as
developing a design that, once approved, guides the project team.) are those that happen
only once during a project, such as developing a design that, once approved, guides the
project team. Nonrecurring costs tend to occur more often during project planning and
closing, while recurring costs tend to occur more often during project execution.
Regular versus Expedited Costs
A fourth cost comparison is regular or expedited. Regular costs are preferred and occur
when progress can be made by normal work hours and purchasing agreements. Expedited
costs occur when the project must be conducted faster than normal and overtime for
workers and/or extra charges for rapid delivery from suppliers are necessary. The
comparison of these costs shows why it is vital to understand schedule pressures and
resource demands as costs are estimated.
Other Cost Classifications
The next several cost comparisons require little explanation. They are helpful to understand
both in structuring the cost estimates and as checklists to help remember items that may be
forgotten. One comparison is costs internal to the parent organization versus those external
to it. Major external cost items such as equipment can be either leased or purchased. Direct
cost items are often employees or materials.
Estimate versus reserve costs form the next comparison. The estimate (a quantified
assessment of the likely amount. It should always include an indication of accuracy) is a
quantified assessment of the likely amount. It should always include an indication of
accuracy. The reserve (extra money in the project budget to be used if necessary
usually if a risk event occurs.) is extra money in the project budget to be used if necessary
usually if a risk
