Final Project: Project
Milestone Schedule and Project Budget
Estimating the total cost of the project is both a science and an
art. There are several techniques for developing an estimate of total project
cost which becomes your project budget. The authors of “Project Management
in Practice” describes top-down and bottom-up budgeting. The PMBOK (PMBOK®
Guide) also also describes analogous, parametric and three-point
estimating. All these tools and techniques have value and must be applied using
expert judgment as described on page 204 of the PMBOK (PMBOK® Guide).
Most project cost estimates are derived from the cost estimate of
the work packages established when developing the project WBS. The direct cost
on the project represents the total cost of all work to be performed to produce
the deliverables of the project. All work to be performed on the project should
be captured in the work packages when developing the WBS.
After the project cost estimate is developed, the project
management team tracks the cost expended against the cost estimate, as the
project is executed. By definition, a project cost estimate is wrong. This
means the actual cost expended is almost never the same as the budget. Since
the estimate is wrong, we need to track expenditures against the amount of work
performed and the actual cost of that work versus the estimated cost. We use
techniques such as the CPI and SPI to better determine the cost performance on
a project.
Review the WBS to estimate cost for each of the four phases of the
construction project plan. Explain the estimating techniques and
assumptions used.
The specific parts of the St. Dismas Assisted living facility case
study you will need to prepare this week’s elements of the project plan are
listed below.
Meredith, J.R., & Shafer, S. (2021). Project
management in practice (7th ed.). John Wiley & Sons, Inc.
Part
4: Friendly Assisted Living Facility Project Budget Development—4 (pp.
112-137)
Preliminary
Project Budget (pp. 141)
Refer to the Project Plan Template for specific instructions on
how to complete the budget for the project plan.
