Cost and Quality Management Plan for Assisted Living Facility Project

This report presents a comprehensive cost and quality management plan for St. Dismas Medical Centre's Assisted Living Facility (ALF) project. The introduction emphasizes the importance of cost and quality management in planning, controlling, and allocating finances to achieve project objectives within budget. The cost management plan outlines key steps, including defining project objectives, mapping processes, identifying model inputs (operational implementation plan, legal and licensing requirements, marketing, construction and furnishing), generating calculations, reports, and outputs, and emphasizing progress and constant improvements. The report highlights the use of Earned Value Management (EVM) for tracking costs, time, and task completion. The conclusion stresses the need for organizations to consider both quality and cost management in their projects to achieve goals and objectives efficiently. The report also includes references to relevant books and journals.

Cost and Quality
Management Plans (Part 2)

Table of Contents
INTRODUCTION...........................................................................................................................1
COST MANAGEMENT PLAN......................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Cost management is a process through which finances of an organisation in relation to a
particular project is planned and controlled. It is used to manage and allocate finances of
business and allows business organisation to predict expected expenditures that helps to achieve
planed objectives in the provided budget. Cost management is one of the important tool that
leads to set baseline for a project. The expected cost of the project is analysed through cost
management and helps to ensure that project is accomplished in the target budget (Cost
Management, 2019). Cost management helps in analysing the cost and related fluctuations in the
project and this will help in introducing effective method to take preservative actions to
minimise damages. Quality management is an act which is performed by each business
organisation so that an activity can be performed to maintain desired level of excellence. In this
project St. Dismas Medical Centre is introducing a projected related to assisted living facility
(ALF). In relation to this project a cost management plan will be introduced.
COST MANAGEMENT PLAN
Cost management plan of St. Dismas Medical Centre in their assisted living project aims
to improve the management of all the cost involved in various activities in the process to
accomplish the objective. All the activities such as marketing, administration, operation and
investment is made as per the budget is provided to ALF project. Mapping of all project such as
calculating, controlling and allocating of all the finances for the project is achieved through
project management. When the cost management plan is developed for ALF project then these
described steps will be followed-
Defining objective of the project: Each project which is developed in an organisation is
based to accomplish a particular purpose. In the process of development of a cost management
plan objective of the plan must be clear (Antony Hilton and Sohal, 2012). The purpose for which
ALF project is developed must be available in defined form so that goals can be used to access
other activities in the organisational project. Defining a project in more appropriate manner will
help to implement a process so that each activity of the project will be achieved in well defined
manner. At this stage various project objectives and cost objectives are developed so that each
product can be evaluated on the basis of financial viability and feasibility. As St. Dismas
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Medical Centre is initiating its ALF project with an objective to becoming cost effective in short
run and in long run to capitalise on the existing services.
Mapping Process: At this stage all the activities involved in the cost management plan
are designed to develop the flow of various activities. In this mapping process the current state of
activities is defined with emphasising on what needs to be achieved in future. When all the
activities are arranged in the well defined manner then in that case it will leads to set standards
that needs to achieved (Burtonshaw-Gunn, 2017). Each activity in each phase of the project is
provided with defined time duration to achieved. Activities in the process of mapping are named
as task and will be arranged in the manner they needs to be performed. For example- in ALF
project the draft plan contains operational implementation plan and number of activities in
mapped form is provided so that conflict do not arises.
Identifying the model inputs: Inputs in the process of cost management plan refers to all
the elements that is a starting point for a costing model and its results. These are the financial and
non-financial value related to quantities along with business rules or drivers that will be used to
assist cost to accomplish a particular project. Information in relation to all the inputs that will
incur cost will be analysed so that each activity can be operated in cost effective manner. To
accomplish project in relation to assisted living facility services by St. Dismas Medical Centre
some activities that will incur cost are as follows-
 Operational implementation plan
 Legal and licensing requirements
 Marketing
 Construction and Furnishing
Inputs that are related to accomplish each activity must be estimated on the basis of cost
involved.
Generating calculations, reports and outputs: A effective and accurate costing method
which is used to design cost management plan of the project results in simplifying various
activities (Capilla, Bosch and Kang, 2013). Calculations helps in establishing a tracking system
through which each element can be calculated on the basis of input involved and output
generated form the project. When calculations are made then it become easier for managers to
access which activities needs to be considered important as a costing tool. Based on the size of
the project entire cost of the project is estimated in between $8500000 and $11000000 for the
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construction facility. Output (net income) that is achieved by involving these finances is
estimated to be in the range of $9000 and $12000 per unit per year. Cash flow that is estimated
for ALF project activities is estimated to be $1500000 per year. In the project report all the
finances will be included and together with this initiation and completion time duration will be
recorded.
Progress and constant improvements: Activities that are conducted in relation to a
project are performed in dynamic and susceptible to frequent changes. As ALF project is
initiated in the year 2019 and is expected to accomplish in the year 2022 (Chen and Luo, 2014).
This time gap introduces a business organisation with various changes in the environment and to
accomplish each activity continuous improvement as per environmental changes needs to be
made. As construction cost is estimated to be $70 but this involves a standard deviation of $3.67.
While dealing with the changes in the future environment each change needs to be established on
the concept of measure- manage and improve. Constant improvement is important and involves
requirements of finances. When any project is designed then certain funds are set aside for
contingencies. These funds also become part of the finance management plan in the organisation
so that arrangement of all the funds can be made appropriately.
Earned Value Management (EVM) is an effective technique for tracking cost in
relation to all the expenditure incurred for completion of the project. Through EVM cost, time
and task completion is evaluated simultaneously with completion of the project. EVM will be
applied to ALF project of St. Dismas Medical Centre organisation as follows-
Earned Value Management (EVM)
Planned value: In this initial budge and cost of the project is recorded.
Actual cost: Actual cost that has incurred till a certain point in a project.
Earned value: It is the value of completed work at certain point.
Estimate to completion: At this stage two factors are determined which are estimated time to
complete and estimated cost to complete the project.
Budget at completion: Total budget allocated to the project is analysed.
Planning cost management: It is a process through which policies, procedure and
documentation in relation to planning, managing, expending and controlling project cost. When
planning is made in relation to managing cost in the project then all the strategies to save cost at
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level of the project is established. For example to complete ALF project expertise are allocated to
each activities so that no extra cost is made to complete a particular task.
Controlling cost management: In this management practice business expenses are
reduced to increase profits. This process starts with budgeting and actual cost of the project is
analysed with budgeted. Variation that leads to more expenses will make managers of business
to take actions. While completing ALF project cost manager will ensure that each activity is
performed as per cost management plan.
St. Dismas Medical Centre while performing various activities in relation to accomplish
ALF project allocates all the activities to different individuals. This allocation is based on the
quality that an individual possess in relation to accomplish a particular activity in the most
efficient manner among all the individuals available. The cost management plan for the
organisation will be established by following the steps that are provided above so that each task
is accomplished in efficient manner (Govindarajan and Euchner, 2012). Project of St. Dismas
Medical Centre organisation is developed so that quality of services can be enhanced for all the
targeted consumer group on the basis of future requirements in relation to facility for assisted
living. Goal of quality management will also be considered in the process of developing a cost
management plan of the organisation.
As the project was based on the idea that needs to be accomplished by increasing the
census in the hospital's impatient units by having a location where people could age until they
were in need of hospitalization (Kim, Kumar and Kumar, 2012). The scope and size of the
project is wider and that provides requirement of the project with large amount of finance
requirement. When the cost management plan in the project will be assessed then in that case
cost related to each activity and estimation of the total cost will be centre on the basis of which
the whole project cost management plan is established. In the process to validate the cost
management plan activities that are complex and involves more investment will be given more
attention so that chances to unfavourable situations can be minimised to a great extent. Each
operator of the activity must consider the cost management plan while initiating with the activity
so that no budgeted cost is over expensed and risk in relation to finances lies with St. Dismas
Medical Centre (Stark, 2015).
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CONCLUSION
From the above project report it has been concluded that each business organisation while
working on a particular project needs to provide consideration on its quality and cost
management. As each activity in the organisation to accomplish a particular project must be
performed in such manner so that goals and objectives in relation to cost and quality can be
accomplished. When quality and cost management plans are designed for ALF project then in
relation to accomplish this plan each unit of plan must be accomplished in more accurate
manner. The cost management plan will mention all the financial requirements of the project in
future and these finances must be arranged so that no activity is hindered due to lack of
availability of funds when required.
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REFERENCES
Books and Journals
Antony, J., Hilton, R. J. and Sohal, A., 2012. A conceptual model for the successful deployment
of Lean Six Sigma. International Journal of Quality & Reliability Management.
Burtonshaw-Gunn, S. A., 2017. Risk and financial management in construction. Routledge.
Capilla, R., Bosch, J. and Kang, K. C., 2013. Systems and software variability
management. Concepts Tools and Experiences.
Chen, L. and Luo, H., 2014. A BIM-based construction quality management model and its
applications. Automation in construction. 46. pp.64-73.
Govindarajan, V. and Euchner, J., 2012. Reverse innovation. Research-Technology
Management. 55(6). pp.13-17.
Kim, D. Y., Kumar, V. and Kumar, U., 2012. Relationship between quality management
practices and innovation. Journal of operations management. 30(4). pp.295-315.
Stark, J., 2015. Product lifecycle management. In Product lifecycle management (Volume 1) (pp.
1-29). Springer, Cham.
Online
Cost Management. 2019. [Online]. Available through:
<https://www.apm.org.uk/body-of-knowledge/delivery/financial-cost-management/>
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