Cost Management Plan for The Bungalow Project - PROJ6002 Analysis

This project presents a comprehensive cost management plan for The Bungalow Project, focusing on the key aspects of project cost control. The plan details the level of accuracy, units of measure, and control thresholds used for budget management. It outlines rules for performance measurement, including direct impact, ROI, on-time and on-budget completion, and stakeholder engagement. The document also covers cost reporting formats and processes, such as cost estimation using three-point estimation, budget development by analyzing project activities and resource allocation, and updating, monitoring, and controlling costs through expense analysis, resource management, and earned value management. The references cited support the methodologies and principles discussed within the plan, providing a robust framework for project cost management.

COST MANAGEMENT PLAN
Project Title:The Bungalow Project Date:15-08-2018
Level of Accuracy: Units of
Measure:
Control Thresholds:
The level of accuracy
medium for the budget
that is estimated for the
bunglow project.
Dollar The control threshold is defined as an
upper or lower limit that is used for
defining the limit of an acceptable cost
or expenditure in project
management. It is mainly utilized for
indicating the maximum amount of
time in which the entire action can
took place.
Rules for Performance Measurement:
The rules for performance measurement are listed below:
Direct Impact: The size of the project generally helps in creating huge impact on the
performance of project success. It is considered as the size for the difference between
the level of performance before the starting time of the entire project (Boehm, 2017).
Bottom line Impact and ROI: It is found that a project cannot be successful if the
cost of doing it is quite lower than the value of impact. Thus, the most important as
well as significant measures includes finanacial impact like the cost that is saved as
well as the ROI that is generated.
On time and on budget: It is found that if the entire project get completed within the
expected time and budget then the project will generally be able to create much
impact on the ROI. It is found that it is most commonly utilized for measuring the
performance of the project.
Stakeholder support and enagement: It is found that the perception of
stakeholders value can generally be measured for proper monitoring. However in order
to get a more direct measure of support it is quite necessary for the stakeholders to
participate in the project tasks (Khodakarami & Abdi, 2014).
Perforamnce measure checklist: The basic framework for measuring the
performance of the project includes the business performance measure impact,ROI as
well as completion of milestone on time and budget.
Page 1 of 1

Cost Reporting and Format:
It is found that the cost report that is created is for bunglow project is mainly
developed for calculating the cost that is mainly invested on the project on the weekly
basis. The total cost of the entire project is provided in the cost report for making sure
that the entire project will sucessgfully get finished within the budget that is expected
(Park et al., 2014).
Process Management:
Estimating costs It is found that the total cost that is estimated for the project
is around $377100. It is found that the entire project will get
completed within this budget. It is found that three types of
cost estimation methods are generally utilized for estimating
the cost nad it is found that three point estimation is the best
method for estimating the cost. As per the three point cost
estimating method it is found that the total expected cost that
is required for the project will be around $395955.
Developing the
budget
The budget for the project is mainly developed by analyzing
the activities that are required for finishing the project. As per
the project activities, the resources of the project are generally
analyzed. Then it is the responsibility of to analyze the total
cost that is needed for developing the project. After
undergoing through all this procedures, the entire budget that
is needed for executing the project successfully is estimated
(Boehm, 2017).
Updating,
monitoring and
controlling
It is found that in order to update, monitor as well as control
the project, it is quite necessary to follow the steps that are
generally provided below:
Analyzing the expenses: It is very much necessary to
analyze the expenses on regular basis for making sure that the
project is on track and it will get completed within the time
that is expected.
Proper management of project resources: The resources
of the project must be managed for avoiding additional
expenses of the project and in this way the project is
monitored as well as controlled (Khodakarami & Abdi, 2014).
Earned value management: Earned value management is
Page 1 of 1

one of the mathematical method that assits in measuring the
actual perfprmance of the project. It is found that this method
is generally utilized for monitoring the schedule as well as cost
of the project for making sure that the entire budget of the
project will get completed within the cost that is approved.
References
Boehm, B. W. (2017, May). Software cost estimation meets software diversity.
In Software Engineering Companion (ICSE-C), 2017 IEEE/ACM 39th
International Conference on (pp. 495-496). IEEE.
Khodakarami, V., & Abdi, A. (2014). Project cost risk analysis: A Bayesian networks
approach for modeling dependencies between cost items. International
Journal of Project Management, 32(7), 1233-1245.
Park, T., Kang, T., Lee, Y., & Seo, K. (2014). Project cost estimation of national road in
preliminary feasibility stage using BIM/GIS platform. In Computing in Civil and
Building Engineering (2014) (pp. 423-430).
This template is sourced from Snyder, C. S. (2013). A project manager’s book of
forms: A companion to the PMBOK guide (2nd ed.). Indianapolis, IN: Wiley
Publishing.
Page 1 of 1