Project Budget, Schedule, and Resources: A Case Study

Desklib provides past papers and solved assignments. This project analyzes oil tank repair budgeting and scheduling.

Assessment 2 Project Budget, Schedule,
and Resources
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Table of Contents
Introduction......................................................................................................................................3
1) Development of Budget on the basis of case study inclusive of assumptions.........................4
2) Schedule for the case study project identifying the Key milestones of the project
deliverables..................................................................................................................................6
3) Resources required for completion of the project....................................................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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Introduction
In this project various aspects of budgets have been discussed with the methods of preparing the
budgets. The factors that are taken into consideration for the preparation of the budget have also
been discussed. The project further explains the milestones that are required to be achieved for
the fulfilment of the budget. In the end, the merits of the tools used in the budgetary preparation
have been discussed.
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1) Development of Budget on the basis of case study inclusive of assumptions.
Particulars Tank 1 Tank 2 Tank 3
Steel
Patches 4 7 6
Steel
Anchor 4 4 4
Capacity
1 Million
Ltrs 3 Million Ltrs
7 Million
Ltrs
Time 4 to 6 hrs 8 to 10 hrs 18 to 20 hrs
An appropriate budget will require the following things:
Identification of resource price rate:
The company should calculate the specific price rate of all the resources used in the project. It
will help the company to estimate the total cost of the repairing. If the company prepares the
budget properly then it will help in dealing the abnormal situations.
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The goal should be set the within the limits of the company:
The company should set the goals which are practically possible to achieve. Repairing of the
tanks should be managed in such a manner that it should not hamper the regular working of the
company. Proper and reasonable time should be given for the repair of oil tanks.
Creation of reserves:
The company should create the reserves of funds before starting the repair work. It will help the
company to overcome abnormal situations. Reserves will provide financial support to the
company. Reserves will help the company to grape the financial opportunity.
Determine whether Step Costing is needed: Company should identify whether the budget
should be based on the step costing method. Step costing will help the company to break the cost
in parts and more appropriately estimates the total cost. To build a budget for repairing of oil
tanks step costing will be very useful in identifying the small expenses (Duggan, 2019).
To make proper budget revenue forecast is needed:
Revenue manager should make the prediction about the increase in revenue of the company after
the repair work is done. If the company have proper knowledge of increase in revenue due to
repair work, then the company can more properly estimate whether it is beneficial to carry on the
repair work.
The company should obtain the budgets from different departments:
For creating an overall budget, Oil Company has to make the individual budget for all the tanks.
Individual budgets are necessary to correctly estimate the cost of repairs for each tank. Separate
budgets are necessary to make the overall budget because it will help the company to correctly
estimate the cost.
The budget should be updated from time to time: In the repair work budget should be updated
frequently and on regular intervals. Repairing of oil tanks requires huge cost, so it will be better
for the company to review and update its budget according to the work done (O'SHEA, 2019).
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2) Schedule for the case study project identifying the Key milestones of the project
deliverables
Budgets are important to accelerate the profits of the company. Oil Company can use mainly two
techniques – bottom-up budgeting and top-down budgeting.
Top-down Approach:
Top-down budgeting begins from the top level of organization and it goes to the lower level of
the organisation. In top-down budgeting approach, total costs are predicted by the top level
manager in the organization. All the budgets are prepared by the higher level management and
the lower staff people don’t have much involvement in the process.
If Oil Company follows the top-down approach that means top-management is responsible to set
the road map for the whole organization.
Advantages of the Top-down Approach:
Top-down budgeting will save the time of lower level of peoples who are involved in day to day
working. In top-down budgeting, the only senior management team will make the budget this
will save the time of the lower level management.
Disadvantages of the Top-down Approach:
 Lower level employees might think that they are not part of the organisation and higher level
has imposed their plans without involving their common issues. This approach at times
weakens the morale of the lower level of an employee because in planning process lower
level staffs are not involved.
 Lower level staff is not involved in making the budget hence top management level may not
be aware of some practical problems which recently has arisen in the market. This may cause
the problems while implementing the budget practically.
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Bottom-up Budgeting approach:
Bottom-up Budgeting starts from the lowest level in the company. To start the bottom up
budgeting approach lower level people must focus on each step of the project and relates the cost
to each step of the project. Oil Company will require the input manager on each level to calculate
the suitable cost of the project. Normally lower level staff prepares the budgets for the
organisation.
In this methodology supervisor of the individual division create the budget send it to the top level
for the approval. Then the budget is modified, approved or sent back for revision, and then the
master budget is formed with the help of such individual budgets.
Disadvantages of Bottom-up approach
i. There are probabilities that lower level management will miss the steps in the planning
process and when this mistake gets identified by the organisation there will be no chance for
the organisation to turn around.
ii. Sometimes supervisor too much emphases on the department individual targets and goals
they kept aside the goals of the organization as a whole.
iii. This type of approach is time-consuming and expensive.
iv. Bottom-up budgeting easily gets over master budget that means lower level staff sometimes
demands more money than it actually required. So it will not be economical for the oil
company. There are chances that lower level staff does the cost manipulation to earn the
undue benefits.
v. Comparison between top down and bottom up approach
S.NO Particulars Bottom-up Approach Top-Down Approach
1 Basic Solve the difficulty
at the lower level
Break the big
problem into the
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only. small sub problem
2 Process Examine what data is
to be concise, and
implies the idea of
information hiding
submodules are
individually
scrutinized
3 Communication Require decent
money of
communication
Communication is
not required in the
top down Method
4 Redundancy Useless data should
be removed
It contains the
redundant data
5 Used in Testing Debugging, code
implementation,
module
documentation
Oil Company should use the Top Down method of budgeting to make the budget. Proper
specialization is required in making the budget for the repair of oil tanks. Oil Company requires
proper specialisation in work so that their regular business does not hamper and repair work can
be done simultaneously. In the top Down Method, higher level management conducts the
research work in the market and prepare the budget. Top management will set the budget
according to the requirements of the whole organisation. On the other hand, in bottom-up
budgeting method manager focuses on their individual department goals and not for the
organisation as a whole (Braun, 2017.
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3) Resources required for completion of the project
Tools and technique that can be used to successfully complete the project are:
Skilled Technicians: There should be multi-skilled technicians in each team to complete the
entire project. This project requires installing blinds, ready the tanks for work and move directly
into the cleaning process. Dewatering and stripping are also required to repair the oil tanks;
decreasing the total crossing point is quite often needed when tanks are out of service.
Emergency Response: MOT and EPA certified vacuum full-size trucks are needed to respond
fast to any emergency and environmental clean-up. Oil Company should have access to different
decontamination material and procedure which effectively increase the clean-up process.
Mercury should be handled carefully: Oil company management should understand the
petrochemical plants and mercury contamination on gas is an increasing concern. The company
should have special equipment to handle the mercury-contaminated things like absorbent,
sludge’s and soil and keep them separated from other materials on site.
Tank Clean Up and repairs: Oil Company should have the cold cutting technology to quickly
and safely enter into the tanks in difficult environmental conditions. This will further help the
company to get good access to waste cleaning and any further repairs required. To remove the
residual products, Oil Company should have floor cleaner, blasters and hydraulic dozer and wall
crawlers. Oil Company should have a multi-level skilled team which can remove roof tanks and
does the inspection while cleaning is going simultaneously. Oil Company should have
appropriate skill to manage repair work or demolition at the same time.
Demolition of plant: Suppose, if things will not go to the company's favour and repair works go
wrong. Oil Company should have appropriate knowledge and technique to demolish the tanks
and save the environment from oil pollution. Oil Company should have decontaminated system
vessels, pipework, a chemical flush system to reduce the cost and time.
Protective coatings and surface preparation: Oil Company should be specialised in the
protective coating and surface preparations. The company should have the latest technology to
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protect its assets from damage while doing the repair work. The company should use the
following things:
 UHP and HP hydro jetting for surface preparation and cleaning.
 For surface stripping company should have vacuum cleaning types of equipment.
 Oil company should utilize the recirculated water to reduce the environmental impact and
for minimum waste.
 Oil Company should use the abrasive blasting.
 Coating application should be specialised.
 Rope access, confined space should be used.
 Environmental management should be properly done by waste containment.
 For coating specification company should have certified coating officer.
Treatment and sludge removal: Oil Company should have options including dangerous ranked
pumps, vacuum units and remotely operated the system to achieve better results. CRSRS systems
are the best system that can be used by the oil company for the shortest duration for out of
service tanks and the least number of men power is needed for the space entries
(contractresources, 2019).
All these measures will help the oil company to repair their tanks quickly and efficiently without
hampering the work and environment. Tanks are needed to be repaired quickly to prevent the
company from further legal penalties and natural disasters. If tanks are not repaired immediately
then the company can face huge losses or troubles in near future. The oil company is incurring
the high amount of revenue losses because oil is leaking from the tanks because of its bad
conditions and polluting the environment. It will be better for the company to take the immediate
steps to repairs its tanks and prevent themselves from huge losses.
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Conclusion
After the completion of the above project it can be settled that there are a number of methods
used in the process of budgetary preparation. There are a number of milestones which an
organisation must fulfil for the purpose of fulfilling the targets that have been set in the budgets.
This will ensure effective fulfilment of the budgetary targets. Finally, the analyses of the merits
will enable the organisation to ensure that the techniques used in budgetary preparation are
effective or not.
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References
 Contractresources. (2019). Tank maintenance and environmental services. Retrieved
from https://www.contractresources.com/services/tank-environmental
 Duggan, T. (2019). Project Management Budgeting Tools. Retrieved from
https://smallbusiness.chron.com/project-management-budgeting-tools-58062.html
 Johnson, R. (2017). Bottom-Up/Top-Down Budgeting. [online] Bizfluent. Available at:
https://bizfluent.com/info-8763801-bottomuptopdown-budgeting.html [Accessed 8 Jan.
2019].
 O'SHEA, B. (2019). Budgeting: How to Create a Budget. Retrieved from
https://www.nerdwallet.com/blog/finance/how-to-build-a-budget/
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