|TYPE OF ESTIMATE|
|Case||$20.00||Order of Magnitude|
|Keypad||$3.00||Order of Magnitude|
|Circuit boards (handset)||$6.50||Budget|
|Circuit boards (base unit)||$8.50||Definitive|
|Battery||$1.20||Order of Magnitude|
|Charger||$16.00||Order of Magnitude|
The estimating department currently defines estimate accuracy as follows:
|Order of Magnitude||-25%, +85%|
(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 50%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates.
(Points : 30)
4. (TCO A) Budgeting processes and techniques
A company modifies production automobiles to create custom hybrid vehicles for the high-end auto enthusiast market. They develop and build these custom designs as a single unit or at times in multiples of as many as 20 for larger orders. The orders are generated by the marketing department with help from the owners who participate in the management of the company. Each new order is assigned to a project team, which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects.
As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.
What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work. (Points : 30)
1. (TCO C) Schedule Crashing
Using the network below and the additional information provided, find:
(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?
|Activity||Duration||Predecessors||Personnel / Cost|
|A||3 days||—||1 Systems Analyst/$260 day|
|B||6 days||—||3 Programmers/$200 day each|
|C||4 days||A||3 Programmers/$200 day each|
|D||2 days||C||2 Hardware specialists/$230 day each|
|E||3 days||A||1 Systems Analyst/$260 day|
|F||2 days||D, E||1 Test Engineer/$300 day|
The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at an 80% cost premium if needed.
(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.
(b) Note that operations can be split if required: what is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 30)
|Budget||BCWP||– BCWS||SV||SPI||– ACWP||CV||CPI|
|E||$16,000||$0||$0||$ –||$0||$ –|
(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments.
(Points : 30)
2. (TCO D) PMIS and cost accounting
We have discussed extensively over the past eight weeks the benefits, tools, and methodologies to project monitoring and control. Effective project monitoring requires access to projects data, and therefore a Project Cost Accounting System (PCAS) is essential.
(a) What are the primary types of data collected by such a system?
(b) What are some of the benefits of PCAS? (Points : 30)
|D||2 Days||C, B||$7,850|
|F||2 Days||D, E||$8,600|
At the end of day 5, the status of the project is as follows:
|Activity||% Complete||Actual Cost|
Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.