Project Development and Optimization: Principles, Feasibility Reports, Accounting Principles, and Technology Innovation

This article discusses the principles of cost-driven project design optimization, the development of project feasibility reports, the application of accounting principles in project budgets and financial projections, and the role of technology innovation in project management. It also explains the information environment in enterprise architecture and its relation to individual business functions and processes.

PROJECT
DEVELOPMENT AND
OPTIMISATION
Table of Content

s
INTRODUCTION......................................................................................................................1
ULO2 Explain the principles of cost-driven project design optimization..............................1
ULO3 Develop Project feasibility reports based on the critical analysis of project data.......2
ULO4 Apply accounting principles in the analysis of project budgets and financial
projections..............................................................................................................................3
CLO1 Describe the role of information requirements and technology innovation in today’s
business and government........................................................................................................5
CLO6 Identify and exploit opportunities facilitates by technological innovation.................6
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................8

INTRODUCTION
The scope of the project management has increased due to the increasing needs of an
entity. Project management technique used by an entity for managing the whole project taken
up by an enterprise to accomplish all its targets within a stipulated time period. Current
assignment is related to the project optimization and its overall development by using various
phases. It emphasizes on the utilization of cost-driven project design optimization techniques
in managing a particular project. Feasibility of the project is checked by preparing various
kinds of feasibility reports. Accounting principles used in a project using budgets and
financial projections. Use of the technology is evaluated through opportunities and its usage
in an entity.
ULO2 Explain the principles of cost-driven project design optimization
Cost plays a significant role in an entity as an enterprise emphasizes more on
identifying a variety of costs such as fixed as well as variable costs incurred for a particular
project in a business (Ranjan, Choubey & Mahto, 2018). Cost is a sensitive aspect of an
entity which needs to be handled with care as this will affect an entity in decreasing its image
in front of the external users by increasing the cost burden.
An entity uses design optimization framework which considers the entire costs
covered for a particular project to reduce the same within a given span of time. Net present
value is one of the approaches used in the design optimization approach which includes the
total costs of the project incurred for a total time period. Net present value method shows the
future profitability of the project in which an entity invests the amount in the present to
generate enough amounts in the future.
Three varieties of costs driven project design optimization follows by an entity to
resolve each and every issue occurred in an enterprise project. It includes fixed costs; costs
change directly with the design variable and costs that changes indirectly with the design
variable (Zhang, Perina, Li, Ye, Murino & Del Bue, 2018). A fixed cost is a cost which
remains the same with the zero level of production in an entity as it acts like a burden for the
business which needs to be borne by an entity in any condition, The fixed costs are un-
controllable as an entity is required to meet in the case of profit or in the condition of loss.
Cost-driven design optimization model
Cost= a X+ (b/X) +K
The above equation denotes the processing of the cost-driven design optimization
model which is helpful in considering the overall costs incurred in a project starts from fixed
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costs to all the variable costs. The variable cost is further segregated into direct and indirect
costs related to the project in an entity. The focus of an entity is clearly defined by the above
equation that costs need to be identified within a stipulated time as earlier identification of
costs are essential to minimize the same at the time.
The elements used in the above equation denotes the differed kinds of costs incurred
in an entity such as ‘a’ signifies direct costs, ‘b’ represents indirect costs; ‘k’ shows the
occurrence of the fixed costs and ‘X’ shows design variable.
ULO3 Develop Project feasibility reports based on the critical analysis of project data
The feasibility report is a report prepared by an entity before considering any project
as this report check the calibre of a project with various criteria’s such as cost involved,
technical feasibility, risks related with the project, sustainability. This report is essential
before investing in any project as it tells the right path to an entity after considering all the
internal as well as external environment consideration. A project passes all these
considerations will survive for the longer period.
It tests the viability of any business plan or idea by considering various restrictions in
the form of legal permissions or licenses, economic feasibility, technical feasibility. It is a
reality check tool to know the future outcomes in the present by testing the current business
ideas from all the angles to assure about the success of the same (Bekasiewicz, 2018).
For successfully preparing the feasibility study of a business plan, an entity uses the
five-dimensional framework to tests the capability of a particular project to face the
competitions from all other rivals existing in a similar market is given as below:
Technical Feasibility- This stage emphasizes on all the technical resources uses by an entity
such as technology in building a website of an entity. It also uses various software application
in automated the business processes quickly (Nagaraj and et.al. 2018). Feasibility of all these
resources is tested by an entity within a given span of time as technology is dynamic in nature
which is changing day by day. This study helps in identifying the pros and cons of the
technical resources uses by an entity in building its business organization.
Economic Feasibility- This includes the identification of all the costs and profits from the
future project of an entity in a stipulated time period. Costs are bifurcated into two major
streams such as fixed or variable costs to cow the impact of the same on the current project.
This stage also helps in identifying the burden of which costs fixed or variable (Griffiths and
et. al., 2018). Higher variable costs can be regulated by making changes in the production of
an entity but fixed costs remain the same which shows alarming situation for an entity. The
decision taken by a top management for continuing or shutting the business depends on the
increasing or decreasing costs involved in a project.
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Legal Feasibility- It includes the legal consent of the state or central government for the new
idea generated by an entity (Zhu, Venkataraman, Ye, Chandrasekhar & Ruiz, 2018). An
entity needs to respect all the laws and regulations to get a legal permission to start the
business. A business plan which fails to pass the legal feasibility test will not survive in the
environment.
Operational Feasibility- This phase focuses on performing a business operation by meeting
all the needs and objectives of all the customers of the business. The aim of an entity is to
satisfy all its users which help in expanding the base of customers of the business. Every
entity aims to meet the needs and the requirements of all its users whether internal or external
users to improve its image in the external market (Yi and et.al., 2018). A project passes the
operational feasibility study will create its unique image in front of its buyers and investors
who trust on an entity which meets all its needs and delivers the final output on time.
Scheduling feasibility- Time plays an integral role for an entity as this will effect on the
existing competition in the current environment. An entity aims to accomplish all its aims and
desired targets on time to get the success of the project on time. This stage tells that the
current project will succeed or fail by notifying the status of the project. It tells the time of all
the singular activities of a particular project (Lu and et.al., 2018). With the help of time
scheduling feasibility plan, an entity keeps track on all the success of an entire project.
Standard time allotted to each and every project is compared with the actual status of the
tasks to take a corrective action. Correction measures are necessary to improve the
performance of an enterprise.
ULO4 Apply accounting principles in the analysis of project budgets and financial
projections.
BUDGET MODEL PARAMETERS:
Selling price per unit, P $20
Variable costs per unit, V $8
Fixed costs, F $3,000
MASTER BUDGET
Master
When prepared: (Before 19X2)
Units sold, x 1000
Sales Revenue, Px $20,000
Variable Costs,Vx $7,500
Contribution Margin $12,500
Fixed Costs $3,000
Operating Income $9,500
MASTER BUDGET PERFORMANCE REPORT
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Actual Master Variance
Units sold, x 900 1000 100 U
Sales Revenue $9,100 $20,000 $10,900 U
Variable Costs $5,580 $7,500 $1,920 F
Contribution Margin $3,520 $12,500 $8,980 U
Fixed Costs $2,900 $3,000 $100 F
Operating Income $620 $9,500 $8,880 U
FLEXIBLE BUDGET
Flexible
Units sold, x 900
Sales Revenue, Px $18,000
Variable Costs, Vx $6,750
Contribution Margin $11,250
Fixed Costs, F $3,000
Operating Income $8,250
FLEXIBLE BUDGET PERFORMANCE REPORT
Actual Flexible Variance
When prepared: (After 19X2) (After 19X2) (After 19X2)
Units sold, x 900 900 0
Sales Revenue $9,100 $18,000 $8,900 U
Variable Costs $5,580 $6,750 $1,170 F
Contribution Margin $3,520 $11,250 $7,730 U
Fixed Costs $2,900 $3,000 $100 F
Operating Income $620 $8,250 $7,630 U
FLEXIBLE BUDGET VARIANCE ANALYSIS - VERSION 1
Flexible
Budget
Sales-
Volume
Actua
l Variance Flexible Variance Master
Units sold, x 900 0 900 100 U 1000
Sales Revenue
$9,10
0 8900 U $18,000 2000 U $20,000
Variable Costs
$5,58
0 1170 F $6,750 750 F $7,500
Contribution Margin
$3,52
0 7730 U $11,250 1250 U $12,500
Fixed Costs
$2,90
0 100 F $3,000 0 $3,000
Operating Income $620 7630 U $8,250 1250 U $9,500
Cash flow statement
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Particulars 2012 2013
Net profit 80000 90000
Operating activities
Depreciation 5000 15000
Provision for taxation 4000 8000
Increase in current liabilities 6000 7500
Decrease in current assets 2000 2500
Cash generated after working capital changes 93000 118000
Income tax 16000 18000
Cash flow generated from operating activities 77000 100000
Investing Activities
Interest received 6000 6500
Property purchased 55000 65000
Furniture Purchased 21000 28000
Plant Sold 30000 40000
equipment Sold 25000 30000
Cash flow generated from Investing activities -15000 -16500
Financing Activities
Issue of share capital 60000 70000
Redemption of debentures 50000 60000
Interest paid 6000 7000
Cash generated from Financing Activities 104000 123000
Net Increase or decrease in cash 166000 206500
Opening cash 20000 186000
Closing cash 186000 392500
CLO1 Describe the role of information requirements and technology innovation in today’s
business and government
The current reality of the existing environment is that an individual is wholly
depended on the technology due to the emergency o mobile technology which streamlines the
daily routine work of a person. Technology plays an important role in the lie of an individual
and a business as it helps in dealing with all the difficulties in advance by alerting a person
about the future uncertainties ((Carvalho, Poleto & Seixas, 2018). Innovations in the
technology give unique definition to a business as it expands the business by targeting a new
set of customers with the help of various gadgets. This gadget increases the output by
applying minimum input which saves time, energy and money of business users.
An entity becomes dynamic as they adopt changes takes places in the external
environment in the terms of technical changes in an enterprise. There are various behind the
acceptance of the innovations in the technology by a business entity are mention as below:
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Problem-solving tool- Innovations in the technology helps in dealing with all the problems
existing in a business will resolve future problems. As per saying of famous scientists Albert
Einstein, “We cannot solve the problem with the same thinking we used when we created
them” This statement is related with the creativity as simple or general statements can’t
resolve a particular problem as simple things will complicate a simple problem. So
innovation brings new perspectives to solve a single problem easily.
Proactive action- Innovations in technology helps in predicting future uncertainties in
advance to get rid of all the problems. Techniques like regression model and Monte Carlo
simulation techniques will help in predicting future events in the present. This shows that
with the help of technology, an individual can resolve all its future problems in the present.
CLO3 Explain the information environment in enterprise architecture and its relation to
individual business functions and processes.
Every entity uses specific percentage of information technology in its
enterprise architecture to automate its business functions. Work will get quickly finished on
time with the help of information technology (Long, 2018). Enterprise Architecture is a
framework which is a blueprint of all the information technology resources used in an
enterprise in stimulating all the business processes of the business.
Business process management system used by an entity to boost the existing
performance of an entity by catering all needs and the objectives of its users. The aim of this
particular process is to get rid of all the difficulties takes places in an entity due to the manual
working system of an enterprise. Business process management is an approach used by an
entity to smoothen the workflow with higher efficiency. Greater emphasis is given to the
continuous improvements of the business process. Quality of the business is considered from
starting the business process by using quality management techniques. Quality of a particular
business process affects the market competition (Verdaasdonk and et.al. 2018, March).
CLO6 Identify and exploit opportunities facilitates by technological innovation
Opportunities are lies in the existing environment which will be identified by an
enterprise. An enterprise scans its environment by evaluating all the events takes places in the
overall environment. Nowadays, business entity improves its business by utilizing a variety
of technologies in its business (Hills, 2018). Firstly, an entity will identify all the needs and
room for improvement in its businesses to rectify the same by adopting various methods and
techniques. It is essential to know which an area of the firm requires modification to get the
desired outcome (Galliers, 2018). Image of the business is linked with the finished output
delivered by the firm on time.
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Changes are part of an enterprise as it comes in two flavours such
as favourable as well as un-favourable changes which will induce or suppress the profitability
of the venture (Beirne & Ramsay, 2018). The decisions need to be taken by a firm for
identifying the type of changes takes places in an entity to control its overall impact on the
business concern (Aydalot & Keeble, 2018). Various factors held responsible for
transforming an opportunity into the end outcomes includes time, quality, resources used, a
satisfaction of customers, market segment, customer segment, a marketing technique used by
an entity.
CONCLUSION
It can summarize from the above study that project management is one of the useful
technique in managing of the overall project. It is clearly evident from the above assignment
that feasibility report will be helpful for an entity in ensuring its overall survival for a longer
time period in front of all the market rivalries existing in a similar market. A cost-driven
project optimization technique is used in managing all the projects of an entity. Various
projects of an entity are categorized into various categories.
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