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The assignment one project is to develop a project costing system. The system is a bespoke system and can be written in a programming language of your choice e.g C#.

The system must be able to create a cost baseline, cash flow forecast, earned value management calculations and percentage complete proposal. The system will be able to have data entered, data imported via comma delimited files or XML.

It is necessary to purchase a server to run the system and 30 client PCs. The PCs need to be configured with Windows 10 and added to an existing network. The server needs to be setup and tested. Subcontractors will be required to develop the software The project.

Scope Statement

Scope Description (Piscopo, 2017): The scope of the project is to plan, design, procure, develop and install a costing system by which the client can generate automatic cost figures and curves like cost baseline, earned value figures, forecast figures and current percentage completion of the project. The scope also involves the procurement of 30 PCs, 1 Server and Windows 10 operating system which are required to be installed for developing this new costing system.

High-level Requirement: The requirements for the project must be developed by gathering the information and stakeholder’s expectations. The high-level requirements from the project are the generation of cost forecast, cost baseline, cost curves, earned values and many more. The system should provide the access to all users and capable to enter as many data as the user wants to develop the desired result.

In-Scope: To provide the planning, designing, procuring and installing the costing system and provide go-live supports.

Out-of-Scope: Any installation or maintenance related issues after the project handing over shall be treated as extra or additional and is not part of the scope of current project.

Deliverables: The main deliverables are to design, install & deliver the costing project within the budgeted time, cost and maintaining the quality standards

Constraints: The major constraint is the delivery period and installation time allotted for the server and the availability of key resources during the project life cycle as per the requirement.

Assumptions: The working days per week shall be 5 days (excluding the weekends). All the resources shall be available throughout the project period, cash flow shall not be an issue for the project and the approvals of documents shall not take more time than anticipated.

WBS

Task Name

1

Costing Project

1.1

   Initiation

1.1.1

      Milestone: Start the Costing Project

1.1.2

      Develop the Project Charter

1.1.3

      Approve PC to officially start project & nominate the PM

1.1.4

      Identify the Stakeholders

1.1.5

      Milestone: Finish the Initiation Stage

1.2

   Planning

1.2.1

      Milestone: Start the Project Planning phase

1.2.2

      Gather Requirement

1.2.3

      Approve the Requirements

1.2.4

      Develop Project Management Plan

1.2.5

      Develop Scope Management Plan

1.2.6

      Develop Time Management Plan

1.2.7

      Develop Procurement Management Plan

1.2.8

      Develop Risk Management Plan

1.2.9

      Develop Cost Management Plan

1.2.10

      Finalize the Technical specification

1.2.11

      Milestone: Finish the Project Planning Phase

1.3

   Execution

1.3.1

      Milestone: Start the Execution Phase

1.3.2

      Designing Phase

1.3.2.1

         Milestone: Start the Development Phase

1.3.2.2

         Design the System

1.3.2.3

         Design the Database of the Costing Project

1.3.2.4

         Milestone: Finish the Development Phase

1.3.3

      Procurement of Material

1.3.3.1

         Milestone: Start the Procurement Phase

1.3.3.2

         Order Servers

1.3.3.3

         Manufacture & delivery of Servers

1.3.3.4

         Order 30 PCs

1.3.3.5

         Deliver 30 PCs

1.3.3.6

         Purchase Windows 10 License

1.3.3.7

         Milestone: Finish the Procurement Phase

1.3.4

      Install the system

1.3.4.1

         Milestone: Start the Installation Phase

1.3.4.2

         Install Server

1.3.4.3

         Set-up all 30 Client's PCs

1.3.4.4

         Install the developed system

1.3.4.5

         Install the OS

1.3.4.6

         Milestone: Finish the Installation Phase

1.3.5

      Test

1.3.5.1

         Milestone: Start the Testing Phase

1.3.5.2

         Develop a Testing Procedure

1.3.5.3

         Get approval of testing Procedure

1.3.5.4

         Test all the developments

1.3.5.5

         Milestone: Finish the Testing Phase

1.3.6

      Handover & Acceptance

1.3.6.1

         Milestone: Start the Handing over & Acceptance Phase

1.3.6.2

         User acceptance testing of the developed & Installed application

1.3.6.3

         Go Live

1.3.6.4

         Milestone: Finish the Handing over & Acceptance Phase

1.4

   Close-Out & Evaluation

1.4.1

      Milestone: Start the Close-Out & Evaluation Phase

1.4.2

      Provide Training

1.4.3

      Provide Go live support

1.4.4

      Document Lessons Learned

1.4.5

      Review the Project outcomes

1.4.6

      Document the evaluation report & Handover

1.4.7

      Milestone: Finish the Costing Project

Analogous Estimation Technique (Usmani, 2017): This technique is used by comparing the cost of similar project done by the same company or some other. It has the risk of estimation like the location of project, change in resource cost due to time etc.

The Cost estimated by the project Manager from some other similar one and added ROM = 20% extra to counter the unknown risks:

Cost of doing the similar project by other organization = $ 200,000

Add 20% additional (unknown risks) = $ 40,000_____

Total Estimation (as per Analogous Technique) = $ 240,000

Parametric Estimation Technique: this technique uses the per unit calculation of similar project and use it for calculating the cost estimation of the new project. Let, the cost of developing similar costing project by other company per computer = $ 7,500 / PC.

So, by applying the parametric technique of cost estimation, we can derive the cost of installing 30 PCs = $7,500 x 30 Nos. of PC = $ 225,000

By using the Parametric Technique the cost estimation = $ 225,000

Bottom-Up Estimation Technique: It is the most accurate technique which we shall use to develop the cost estimation. The risk reserves are already considered in the cost of each resource.

The unit cost of each resources:

Resource Name

Type

Material Label

Initials

Group

Max. Units

Std. Rate

Accrue At

Project Sponsor

Work

PS

Client

100%

$0.00/hr

Prorated

Project Manager

Work

PM

Subcontractor

100%

$110.00/hr

Prorated

Procurement Expert

Work

PE

Subcontractor

100%

$85.00/hr

Prorated

Design Expert

Work

DE

Subcontractor

100%

$75.00/hr

Prorated

Installation expert

Work

IE

Subcontractor

100%

$80.00/hr

Prorated

Trainer

Work

TR

Subcontractor

100%

$55.00/hr

Prorated

PC - 30 Nos.

Material

30 Computers

PC

$30,000.00

End

Sever

Material

Server

SE

$18,000.00

End

Windows 10

Material

Operating System

WI

$2,000.00

End

All the resources are assigned to each activity to develop the bottom-up estimation:

WBS

Task Name

Resource Initials

Estimated Cost

1

Costing Project

$221,320.00

1.1

   Initiation

$10,560.00

1.1.1

      Milestone: Start the Costing Project

$0.00

1.1.2

      Develop the Project Charter

PM

$6,160.00

1.1.3

      Approve PC to officially start project & nominate the PM

PS

$0.00

1.1.4

      Identify the Stakeholders

PM

$4,400.00

1.1.5

      Milestone: Finish the Initiation Stage

$0.00

1.2

   Planning

$50,240.00

1.2.1

      Milestone: Start the Project Planning phase

$0.00

1.2.2

      Gather Requirement

DE,IE

$8,680.00

1.2.3

      Approve the Requirements

PS

$0.00

1.2.4

      Develop Project Management Plan

PM

$4,400.00

1.2.5

      Develop Scope Management Plan

PM

$4,400.00

1.2.6

      Develop Time Management Plan

PM

$7,920.00

1.2.7

      Develop Procurement Management Plan

PE

$4,760.00

1.2.8

      Develop Risk Management Plan

PM

$7,920.00

1.2.9

      Develop Cost Management Plan

PM

$6,160.00

1.2.10

      Finalize the Technical specification

DE

$6,000.00

1.2.11

      Milestone: Finish the Project Planning Phase

$0.00

1.3

   Execution

$131,120.00

1.3.1

      Milestone: Start the Execution Phase

$0.00

1.3.2

      Designing Phase

$18,400.00

1.3.2.1

         Milestone: Start the Development Phase

$0.00

1.3.2.2

         Design the System

DE

$12,000.00

1.3.2.3

         Design the Database of the Costing Project

IE

$6,400.00

1.3.2.4

         Milestone: Finish the Development Phase

$0.00

1.3.3

      Procurement of Material

$60,200.00

1.3.3.1

         Milestone: Start the Procurement Phase

$0.00

1.3.3.2

         Order Servers

PE

$6,800.00

1.3.3.3

         Manufacture & delivery of Servers

SE

$18,000.00

1.3.3.4

         Order 30 PCs

PE

$3,400.00

1.3.3.5

         Deliver 30 PCs

PC

$30,000.00

1.3.3.6

         Purchase Windows 10 License

WI

$2,000.00

1.3.3.7

         Milestone: Finish the Procurement Phase

$0.00

1.3.4

      Install the system

$28,800.00

1.3.4.1

         Milestone: Start the Installation Phase

$0.00

1.3.4.2

         Install Server

IE

$6,400.00

1.3.4.3

         Set-up all 30 Client's PCs

IE

$9,600.00

1.3.4.4

         Install the developed system

IE

$6,400.00

1.3.4.5

         Install the OS

IE

$6,400.00

1.3.4.6

         Milestone: Finish the Installation Phase

$0.00

1.3.5

      Test

$17,800.00

1.3.5.1

         Milestone: Start the Testing Phase

$0.00

1.3.5.2

         Develop a Testing Procedure

DE

$9,000.00

1.3.5.3

         Get approval of testing Procedure

PS

$0.00

1.3.5.4

         Test all the developments

PM

$8,800.00

1.3.5.5

         Milestone: Finish the Testing Phase

$0.00

1.3.6

      Handover & Acceptance

$5,920.00

1.3.6.1

         Milestone: Start the Handing over & Acceptance Phase

$0.00

1.3.6.2

         User acceptance testing of the developed & Installed application

PM

$4,400.00

1.3.6.3

         Go Live

IE,PM

$1,520.00

1.3.6.4

         Milestone: Finish the Handing over & Acceptance Phase

$0.00

1.4

   Close-Out & Evaluation

$29,400.00

1.4.1

      Milestone: Start the Close-Out & Evaluation Phase

$0.00

1.4.2

      Provide Training

TR

$6,600.00

1.4.3

      Provide Go live support

IE

$9,600.00

1.4.4

      Document Lessons Learned

PM

$4,400.00

1.4.5

      Review the Project outcomes

PM,PS

$4,400.00

1.4.6

      Document the evaluation report & Handover

PM

$4,400.00

1.4.7

      Milestone: Finish the Costing Project

$0.00


So, by conducting the Bottom-Up estimation the accurate cost estimate = $ 221,320

This estimation shall be used to develop the further figures.

Stakeholders

Internal / External

Power

Interest

Frequency

Action

Project Sponsor

Internal

High

High

Monthly

Need to satisfy all needs and expectations

Project Manager

Internal

High

High

Weekly

Need to coordinate with all the stakeholders to meet their expectations

Team members

Internal

Low

High

Weekly

Need to submit the reports for PM, PM shall compile and forward to sponsor & Head of subcontractor

Head of Subcontractor

Internal

High

High

Monthly

Need to satisfy all needs and expectations

Users

Internal

Low

Medium

Monthly

Need to update the project status

Vendor / Supplier

External

Low

Low

Monthly

Need to visit the shop to check the accurate information of manufacturing and delivery

Stakeholder

What Information

Where to Share

How to Share

Why to Share

When to Share

Project Sponsor

Reports related to cost, time and quality and change orders

Meeting Room

Presentation, E-mail

To update all the information as per the expectation

Monthly

Project Manager

Vendor progress report, all progress reports from different disciplines

Meeting room, E-mail

E-mail, Reports

To update the project status and concerns from all corners

Weekly

Team members

Reports of their individual discipline

Meeting room, E-mail

E-mail, Reports

To update the Project Manager about the status and concerns of their own disciplines

Weekly

Head of Subcontractor

Reports related to cost, time and quality and change orders

Meeting Room

Presentation, E-mail

To update all the information as per the expectation

Monthly

Users

Progress report of time and quality

Meeting room

Presentation, E-mail

To keep updated regarding the progress and forecasts

Monthly

Vendor / Supplier

Progress reports and issues and forecast dates

Meeting Room, Vendor’s Shop

Presentation, At shop status

To update the status of the manufacturing & delivery phases

Weekly

Risk No.

Description

Type

Likelihood

(L)

Impact

(I)

Product

(L*I)

Rank

Owner

Response

1

Non availability of manpower during project

Threat

40%

80%

32%

1

Project Manager

Extra manpower need to be kept in hand and recruited well before the requirement

2

Cash crunch in between the project

Threat

20%

90%

18%

3

Project Sponsor

Reserve need to be analyzed and kept to counter such issue

3

Delay in delivery of server

Threat

30%

90%

27%

2

Project Manager

Need to get the vendor report regular basis and conduct shop visit to assess the ground situation at regular intervals

4

By achieving the project delivery milestone subcontractor can obtain more confidence and quote for more bigger projects in future

Opportunity

10%

40%

4%

4

Project Manager

Need to enhance the opportunity to establish good market value

Sl No.

Item

Supplier

Quality of Product

Delivered on Time

Quality of Documents

Cost Escalation

Overall Performance

1

Server

V#1

Satisfied

Delay of 10 days

Satisfied

7% escalation charged

Since quality was good, so the life time cost of the product will be less. Hence satisfied

2

PC – 30 Nos.

V#2

Less Satisfied

On time

Less Satisfied

Nil

Warranty for 2 years provided, so the inferior quality shall be covered up by the warranty period. Hence Satisfied

3

Windows 10

V#3

Satisfied

On time

Satisfied

Nil

Satisfied from all dimensions.

The critical chain is the path which is formed due to the constraints of the project. The real constraint in the schedule developed is the ‘Resources’. The resources which are acting as constraints for the project are:

The resources in red color are the real constraints which are actually driving the project and if the leveling is done it can further delay the project. But leveling is must for the project completion without any risk. So one option is to increase the resources or the other is to delay the activity. MSP has one more feature to level the resource within the available float of the activities without delaying the final date.

The result of such operation in MSP is:

Resource Name

Type

Material Label

Initials

Group

Max. Units

Std. Rate

Accrue At

Base Calendar

Project Sponsor

Work

PS

Client

100%

$0.00/hr

Prorated

Standard

Project Manager

Work

PM

Subcontractor

100%

$110.00/hr

Prorated

Standard

Procurement Expert

Work

PE

Subcontractor

100%

$85.00/hr

Prorated

Standard

Design Expert

Work

DE

Subcontractor

100%

$75.00/hr

Prorated

Standard

Installation expert

Work

IE

Subcontractor

100%

$80.00/hr

Prorated

Standard

Trainer

Work

TR

Subcontractor

100%

$55.00/hr

Prorated

Standard

PC - 30 Nos.

Material

30 Computers

PC

$30,000.00

End

Sever

Material

Server

SE

$18,000.00

End

Windows 10

Material

Operating System

WI

$2,000.00

End


By doing this the resource ‘Procurement Expert’ got released from being exhausted and the schedule has adjusted their dates without delaying the final completion date.

References

Piscopo, M. (2017). Scope Management Plan. Retrieved October 3, 2017, from https://www.projectmanagementdocs.com: https://www.projectmanagementdocs.com/project-planning-templates/scope-management-plan.html#axzz4tfIbGW8q

Usmani, F. (2017). 4 Tools to Estimate Costs in the Project Management. Retrieved October 3, 2017, from PM Study Circle: https://pmstudycircle.com/2012/06/4-tools-to-estimate-costs-in-the-project-management/

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