Cost & Quality Management Plans

COST AND QUALITY MANAGEMENTY PLANS 1
Cost and Quality Management Plans
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COST AND QUALITY MANAGEMENT PLANS 2
Table of content
1. Part C: Cost and quality management plan...........................................2
2. Introduction...............................................................................2
3. Measuring management cost............................................................2
4. The tools and techniques used in the cost management plan.......................4
5. The quality management plan for the project.........................................6
References.................................................................................9
Part C: Cost and quality management plan
Introduction
Cost and quality management plan is a very important factor when it comes designing a
project management plan. The purpose of the quality in the project is to describe how quality
will be managed across the lifecycle of the project. On the other hand, cost management plan is
to describe how the cost of a project will be managed through the process. For example, the
manufacturing of 10,000 rubber components at Rubber components production will require
quality and cost management plan. This medium is very much essential for the organization to
understand the scope of what they want to invest in and perhaps make some profit (Al-Zwainy,
F.M.S., and Neran, page 42).
Measuring Project Costs
This section entails aims at the explanation of cost for a project management plan can be
determined. The analysis of the PMBOK is concerned with cost determination and control which
can be estimated through the calculation of the schedule variance. The earned value which is the

COST AND QUALITY MANAGEMENT PLANS 3
actual value and its difference from the planned value provides the schedule difference (Alvarez,
Turner, R. and Mittra, page 60). Ideally, when the difference is negative then it implies the
organization is taking a wrong turn and when we have a positive figure on the difference, it
means that the company is on the right path. Therefore, the project enactment can be known
using the earned value management with the four matrixes that are used in the cost planning
project. The company and the owner of the tender are expected to state the real product
worthiness and this help in knowing and the determination of the exact product cost.
The raw material purchases per month in the company are 1000 units for the production
process. On the other hand, the vendors will be guaranteeing a fixed cost of $200 per raw
material units during the first 12 months of the project only. Material escalation factors are
expected at month 13 due to renegotiation of the United Rubber Workers contracts.
The cost measuring index
Performance measure Blue Red
Schedule performance index Less or more than 1 Less 0.9 or more than 1.1
Cost performance index Less or more than 1 Less 0.9 or more than 1.1
The cost baseline
PMBOK explains the cost base line as set base cost limit that is considered as the
control factor in measuring, controlling and also the monitoring process for the whole project
performance. However, there exist a variety of factors that have an effect on a project cost
performance and thus during the planning process, the estimated cost figures may perhaps
not be accurate based on the factors in the working environment and the emerging trends