Project Management: Budgeting & Baselining

This assignment delves into the core principles of project management, focusing on two key aspects: budgeting and baselining. It examines different cost categories associated with projects, methods for estimating project costs (top-down vs. bottom-up), and the importance of establishing a baseline plan. The work breakdown structure (WBS) is also discussed as a vital tool for project planning and control. Figure 1 illustrates project tracking, while Figure 2 presents a sample WBS. The assignment draws upon resources by Burke, Kerzner, Ranjbar, and Rieck/Zimmermann.

Running head: MN601- PROJECT MANAGEMENT
MN601- Project Management
Name of the Student
Name of the University
Author’s Note

1
MN601- PROJECT MANAGEMENT
Table of Contents
PART A: Budgeting Projects...............................................................................................2
Answer to Question 1:.....................................................................................................2
Answer to Question 2:.....................................................................................................2
Answer to Question 3:.....................................................................................................3
Answer to Question 4:.....................................................................................................4
Answer to Question 5:.....................................................................................................4
PART B: Baselining A Project Plan....................................................................................6
WBS.................................................................................................................................7
Bibliography........................................................................................................................8

2
MN601- PROJECT MANAGEMENT
PART A: Budgeting Projects
Answer to Question 1:
A project is required to be accurately estimated for controlling the project development
process and it can affect the development of the project negatively. The success of the project is
dependent on the proper planning of the project and meeting the requirement. A project schedule
or Gantt chart is required to be prepared for the project and it is important for monitoring the
progress of the project and differentiate between the loss and the gain of the project. The time
estimated for the completion of each of the activity is required to be followed for the completion
of the project within it and the cash flow is also required to be maintained to complete the project
within the budget. A good decision is required to be taken for the management of the cash flow
and allocate the resources to the development team as required. Missing of the deadline for the
development of the activity is required to be strictly followed for successfully develop the
project. The error in the project is required to be mitigated and a time phased budget is required
to be prepared for establishing a baseline for the project and develop the project successfully.
Answer to Question 2:
An organizational culture is required to be managed for influencing the estimation of the
quality of the project. The quality of the project can be estimated following different type of
approach such as top down or bottom up. The senior management uses the top down approach
and it can be done by the management team for the creation of a relationship with the
development team. The bottom up approach is done by involving the team members and the
work breakdown structure is created for the estimation of the cost and the budget. The
organizational culture is required to be developed for the management of the workplace

3
MN601- PROJECT MANAGEMENT
environment and the behavior of the employees working in the workplace is required to be
governed. A guideline is required to be prepared for the organization and it should include the
dressing and behavior of the employees for judging the values of the set a new value in the
workplace. The main characteristics of the organizational culture are innovation, outcome,
attention and emphasis on the people. The decision affecting the people is required to be
analyzed before implementation in the organization. The estimates done on the project is affected
by the organizational culture because innovativeness of the organization can add extra risk in the
project development process and this would also affect the performance of the employees
working for the development of the project.
Answer to Question 3:
The fixed cost and the variable cost associated with the project development is required
to be clearly understood by the project manager for the estimation of the budget of the project.
The variable cost are those that varies upon the number of items or resources included in the
project development while the fixed cost are those without which the project development
process would not succeed. The project manager can easily identify the fixed cost associated
with the project by analyzing the requirement of the project but for the estimation of the variable
cost the number of team member and the technical staffs required is required to be listed and the
risk associated with the project such as the unavailability of the team members crashing of the
project is required to be noted for calculation of the variable cost. The variable cost is required to
be broken down into material or labour cost for the identification of the cost. The fixed cost such
as the rent of the office, advertisement, insurance, electricity, etc. are required to be listed for
creation of the budget of the project. The operation cost such as the legal fees, sales and
marketing cost is also required to be included as a variable cost.

4
MN601- PROJECT MANAGEMENT
Answer to Question 4:
The top down project management approach is used by the project manager for defining
the task of the project and breaking the activity into smaller chunk and refining the project with
more details. The major task are listed at the top and detail of the task is required to be reviewed
by the project team member for the development of the project plan. The conceptual phase and
the measurement of the weight is followed using the top down method. The individual activity
are not considered for the development of the project estimate. The priority can be set using the
top down estimation techniques.
The bottom up approach is used for identification of the task that is required to be
performed and team members are included in the analysis process. The conflict in the system is
required to be identified and the features that is required to be included should be documented
for estimation of the requirement. The work breakdown structure is required to be created for
creation of a detailed schedule and increase the accuracy of the estimation.
The top down approach is best suited for small project where the requirement is clear
while the bottom up estimation is required for large and complex project where a schedule is
required to be created and followed for develop the project successfully.
Answer to Question 5:
There are different types of cost associated with the project such as:
Direct Cost- it includes the cost of the labour, materials and the other equipment’s
required for the development of the project.
Overhead costs- It are the cost of the resources that are required for the development
such as the salary of the employees and the development team, rents of the office or the

5
MN601- PROJECT MANAGEMENT
workplace. The direct cost can be included in the project schedule for the estimation of the
project budget.
Administration and overhead cost- it is the cost of the organization and are not directly
related with the development process. The cost is included during the runtime of the project and
the promotional cost of the project such as the advertisement, marketing and sales of the product.

6
MN601- PROJECT MANAGEMENT
PART B: Baselining A Project Plan
ID Task
Mode
Task Name Duration Start Finish Predecessors Resource Names
1 Development of information
system
446 days Thu
22-09-16
Thu
07-06-18
2 Initialization phase 31 days Fri 08-09-17 Fri 20-10-17
3 Developing the SRS document10 days Fri 08-09-17 Thu 21-09-17 Executive sponsor,Requirement analyst
4 Feasibility study of the existing system9 days Fri 22-09-17 Wed 04-10-173 project manager,Requirement analyst
5 Identification of the requirements of the desired system5 days Thu 05-10-17Wed 11-10-173,4 Requirement analyst
6 Utilization of the project specifications7 days Thu 12-10-17Fri 20-10-17 3,5 Developer,Requirement analyst
7 Meeting with the management team and visitors of show5 days Thu 12-10-17Wed 18-10-174,5 Accountant,Executive sponsor,project manager
8 Appointing of development vendor21 days Thu 19-10-17Thu 16-11-17
9 Identification of the developement vendor5 days Thu 19-10-17Wed 25-10-175,7 Accountant,project manager
10 Analyzing the vendor capability and background10 days Thu 19-10-17Wed 01-11-177 Accountant,Executive sponsor,project manager
11 Planning of total time taken to complete7 days Thu 02-11-17Fri 10-11-17 9,10 Executive sponsor,project manager
12 Budget planning 4 days Mon 13-11-17Thu 16-11-1711,10 Accountant
13 Design Phase 43 days Thu 02-11-17Mon 01-01-18
14 Improving the labour management12 days Thu 02-11-17Fri 17-11-17 10 Accountant,Executive sponsor
15 Start to build the system 18 days Mon 20-11-17Wed 13-12-1714 Developer,project manager
16 Improvement of installation process5 days Thu 14-12-17Wed 20-12-1711,15 Developer
17 Understanding the system requirements for next built8 days Thu 21-12-17Mon 01-01-1816 Developer,project manager
18 Milestone: Completion of design phase0 days Thu 22-09-16Thu 22-09-16
19 Implementation phase of the system at organization38 days Tue 02-01-18Thu 22-02-18
20 Start implementation according to business objectives10 days Tue 02-01-18Mon 15-01-1817,18 Developer,project manager
21 Modification in the first built of the system5 days Tue 16-01-18Mon 22-01-1820 Developer,Requirement analyst
22 Collection of resources and equipments for the project15 days Tue 23-01-18Mon 12-02-1821 Accountant,project manager
23 Verification of the equipments and resources8 days Tue 13-02-18Thu 22-02-1822 Developer,project manager
24 Testing phase 25 days Fri 23-02-18 Thu 29-03-18
25 test run of the system 7 days Fri 23-02-18 Mon 05-03-1822,23 Executive sponsor,project manager
26 Carrying out the test plan 8 days Tue 06-03-18Thu 15-03-1823,25 Software tester
27 Analyzing the test result in real scenario8 days Fri 16-03-18 Tue 27-03-1825,26 Risk manager,Software tester
28 Presentation of the result 2 days Wed 28-03-18Thu 29-03-1825,27 project manager,Software tester
29 Milestone: acceptance of the test results by client0 days Thu 22-09-16Thu 22-09-16
30 Risk management phase 26 days Fri 30-03-18 Fri 04-05-18
31 Identificatiion of the possible risks7 days Fri 30-03-18 Mon 09-04-1828,29 Risk manager,Software tester
32 presentaton of the risks to the risk mannger2 days Tue 10-04-18Wed 11-04-1831 project manager,Risk manager
33 mitigation of the risks 7 days Tue 10-04-18Wed 18-04-1831 Developer,Risk manager
34 Registering the impacts of the risks5 days Thu 19-04-18Wed 25-04-1831,33 project manager,Risk manager
35 Identify the impacts of the risks17 days Thu 12-04-18Fri 04-05-18 32 project manager,Risk manager
36 Milestone: Accepetance of the risk document by the client0 days Thu 22-09-16Thu 22-09-16
37 Closure of the project 24 days Mon 07-05-18Thu 07-06-18
38 Evaluation of the functionality of the developed system9 days Mon 07-05-18Thu 17-05-1835 Executive sponsor,project manager
39 Rolling out the finally developed project15 days Fri 18-05-18 Thu 07-06-1838 Developer,project manager
40 Milestone: Installation of the final system to the organization0 days Thu 07-06-18Thu 07-06-1839
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
07-06
F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F
20 Aug '17 10 Sep '17 01 Oct '17 22 Oct '17 12 Nov '17 03 Dec '17 24 Dec '17 14 Jan '18 04 Feb '18 25 Feb '18 18 Mar '18 08 Apr '18 29 Apr '18 20 May '18 10 Jun '18
Figure 1: Tracking of the project
(Source: created by author)

7
MN601- PROJECT MANAGEMENT
WBS
Figure 2: Work breakdown Structure
(Source: created by author)
Information system
development
Development of
information system
Initialization phase
Developing the
SRS document
Feasibility study of
the existing system
Identification of the
requirements of the
desired system
Utilization of the
project
specifications
Meeting with the
management team
and visitors of show
Appointing of
development vendor
Identification of the
developement vendor
Analyzing the
vendor capability
and background
Planning of total
time taken to
complete
Budget planning
Design Phase
Improving the labour
management
Start to build the
system
Improvement of
installation process
Understanding the
system requirements
for next built
Milestone:
Completion of
design phase
Implementation phase of
the system at organization
Start implementation
according to
business objectives
Modification in the
first built of the
system
Collection of
resources and
equipments for the
project
Verification of the
equipments and
resources
Testing phase
test run of the
system
Carrying out the
test plan
Analyzing the test
result in real
scenario
Presentation of the
result
Milestone:
acceptance of the
test results by client
Risk management phase
Identificatiion of the
possible risks
presentaton of the
risks to the risk
mannger
mitigation of the
risks
Registering the
impacts of the risks
Identify the impacts
of the risks
Milestone:
Accepetance of the
risk document by the
client
Closure of the project
Evaluation of the
functionality of the
developed system
Rolling out the
finally developed
project
Milestone:
Installation of the
final system to the
organization

8
MN601- PROJECT MANAGEMENT
Bibliography
Burke, R. (2013). Project management: planning and control techniques. New Jersey, USA.
Kerzner, H. (2013). Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Ranjbar, M. (2013). A path-relinking metaheuristic for the resource levelling problem. Journal of
the Operational Research Society, 64(7), 1071-1078.
Rieck, J., & Zimmermann, J. (2015). Exact methods for resource leveling problems. In
Handbook on Project Management and Scheduling Vol. 1 (pp. 361-387). Springer
International Publishing.