PROJ 6002: Project Planning and Budgeting Project 2022

Running Head: PROJECT PLANNING AND BUDGETING
PROJ 6002: Project Planning and Budgeting
Name of the Student
Name of the University

1PROJECT PLANNING AND BUDGETING
Cost Management Planning
For any project, determination and management of the overall costs is essential in order
to ensure there is unnecessary outflow of cash that can result in financial losses for the
organisation. Hence, once the overall budget is estimated and confirmed, it is important to
manage the inflow and outflow of cash in the entire project for preventing unnecessary expenses
as well as keeping track of the expenses in the project.
This project is based on the construction of St. Dismas Assisted Living Facility for which
the initial budget for various activities in the project has been estimated. Now, it is required to
add up all these separate budgets and develop the final budget for the project. The budget
breakdown and analysis is shown in the following table.
W
B
S Activity
1-
Aug-
19
15-
Aug-
19
29-
Oct-19
11-
Apr-
19
11-Sep-
19
14-
Nov-19
21-Nov-
19
28-
Nov-19
12-
May-
19
13-
Dec-
19
22-
Dec-19 PV
%
Comp
lete EV
1 Project Planning
$
- 100%
$
-
1.
1
Defining
Objectives
$
5,000
$
5,000 100%
$
5,000
1.
2 Defining Scope
$
2,500
$
2,500 100%
$
2,500
1.
3
Estimate Budget
and Schedule
$
2,500
$
-
$
2,500 100%
$
2,500
2
Organisation
Costs
$
25,00
0
$
2,50,0
00
$
80,000
$
20,000
$
3,75,0
00 100%
$
3,75,0
00
3
Excavation and
Base
Development
$
-
$
-
$
20,000
$
20,00
0 100%
$
20,00
0
4
Project
Construction
Works
$
- 58%
$
40,00
0
4.
1
Framework
Construction
$
67,43,00
0
$
30,00
0
$
30,000
$
68,03,
000 100%
$
68,03,
000
4.
2
Building Body
Development
$
6,74,300
$
6,00,00
0
$
4,05,000
$
3,47,00
0
$
2,02,0
00
$
1,35,0
00
$
1,25,0
00
$
24,88,
300 25%
$
6,22,0
75
5
Project Review
and Monitoring
$
5,000
$
5,000
$
10,00
0 0%
6
Reporting on the
Project -
$
- 0%
$
-
7
Finishing
Activities -
$
- 0%
$
-
8
Final Quality
Check
$
5,000
$
5,000 0%
$
-
Monthly
Planned Value
(PV)
$
25,00
0
$
75,000
$
80,000
$
55,000
$
35,000
$
15,000
$
10,000
$
60,000
$
2,02,0
00
$
1,70,0
00
$
1,65,0
00
$
97,11,
300
$
78,70,
075

2PROJECT PLANNING AND BUDGETING
Cumulative
Planned Value
(PV)
$
25,00
0
$
1,00,0
00
$
1,80,0
00
$
2,35,0
00
$
2,70,000
$
2,85,00
0
$
2,95,000
$
3,55,00
0
$
5,57,0
00
$
7,27,0
00
$
8,92,0
00
Monthly Actual
Cost (AC)
$
25,00
0
$
75,000
$
40,000
$
65,000
$
40,000 20,000 20,000 20,000
Cumulative
Actual Cost
(AC)
$
25,00
0
$
1,00,0
00
$
1,40,0
00
$
2,05,0
00
$
2,45,000
$
2,65,00
0
$
2,85,000
$
3,05,00
0
Monthly
Earned Value
(EV)
$
25,00
0
$
75,000
$
40,000
$
55,000
$
35,000 10,000 0 0
Cumulative
Earned Value
(EV)
$
25,00
0
$
1,00,0
00
$
1,40,0
00
$
1,95,0
00
$
2,30,000
$
2,40,00
0
$
2,40,000
$
2,40,00
0
Project EV
$
2,40,00
0
Project PV
3,55,00
0
Project AC
3,05,00
0
CV=EV-AC
-$
65,000
SV=EV-PV
-$
1,15,000
CPI=EV/AC 79%
SPI=EV/PV 68%
Estimate at
Completion
(EAC) $
1,23,41,
443.75
(Original plan of 4,55,000
divided by CPI of 79%)
Estimate time to
complete 16.27
(Original of 11 plan divided by
SPI of 62%)
Moreover, the budget baseline for the project is shown below.
43566
43579
43592
43605
43618
43631
43644
43657
43670
43683
43696
43709
43722
43735
43748
43761
43774
43787
43800
43813
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Planned Value (PV)
Actual Cost (AC)
Earned Value (EV)
Figure 1: Budget Baseline for the Project
(Source: Created by Author)
From the overall estimations of the project, it has been determined that the total estimated
cost of the project is $10,066,300 that also further increase for additional work that has not been

3PROJECT PLANNING AND BUDGETING
considering in this calculation. However, it must be ensured that there is not any major budget
overshoot from this point as that would result in the failure of the project as well as severe
financial losses for St. Dismas authority.
Quality Management Planning
In any project, quality is a very important aspect and once the project is complete, the
best quality outcome must be delivered as per the pre-set standards that are defined during the
planning phase of the project. Not only the quality of the project deliverable is important but also
the quality of budgetary outcome and cost is important. Once the overall project budget is set, it
is important to ensure the project is completed within this budget limit such that there are no
unnecessary and extra expenses from the project that will bring about financial losses for the
company. The main quality standards that required to be followed are as follows.
Material Quality – The first and foremost quality requirement for the project includes the
materials that are to be used for the construction of the building. When the planning is complete,
the materials are to be purchased from a reliable vendor with a strong presence and background
in the industry. The selection of vendor can be done through tendering process and the least cost
tender can be selected considering the vendor will not compromise with the quality of the
materials.
Building Quality – In addition to the materials, it is also important to provide high quality
on the construction of the hospital building. If the quality of construction is compromised, there
might be severe accidents like collapse of the building that can result in severe and fatal injuries
to the patients and other personnel inside. Hence, it must be ensured that the building has no
structural flaws and low quality before handing over to St. Dismas.

4PROJECT PLANNING AND BUDGETING
Design Quality – During the entire construction process, it is important to follow the
quality standards for interior and exterior design of the building. The quality standards for the
design requires the team to develop a design for the building that is suitable for assisted living
facilities and hospitals where the patients can have maximum convenience. Hence, these
standards must be followed for the development of interior and exterior designs that include the
building layout, floor plan, amenities placement and others.
Cost Quality – Other than the factors discussed above, cost quality also plays an
important role in the project. In the cost estimation part, the overall budget of the project has
been determined as approximately $10.5m. This budget is to be considered as the threshold limit
that cannot be exceeded at any cost except there are some unforeseen incidents and hazards
occurring that can incur high costs for the organisation. Moreover, the budget has been
separately divided in the work breakdown structure such that the stakeholders have clear idea
about the overall spending plan in various phases of the project. It is the duty of the stakeholders
to ensure this budget breakdown is followed throughout the course of the project. In case of any
changes in a particular activity in the project, the stakeholder must develop a budget change
request detailing the need for change in budget and the amount of change required. In addition to
the management of the costs, it is also required to ensure the cost effectiveness for the project is
high i.e. the best quality outcome is achieved at the expense of the entire budget. There are many
situations where the stakeholders overpay for poor quality resources and thus getting very low
cost effectiveness. These types of situations must be avoided for the sake of success of the
project. These situations can be avoided if a supervisor is appointed who will be able to monitor
the entire spending process and also report to the finance manager regarding every transaction

5PROJECT PLANNING AND BUDGETING
the team has performed in the entire course of the project. Spending strategies can be developed
in the form of an official document and can be used as a part of the quality management plan.

6PROJECT PLANNING AND BUDGETING
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