Project Management: Budgeting, Risk, and FMEA Project Analysis

This project management assignment delves into various aspects of project management, including the disadvantages of top-down and bottom-up budgeting approaches. It examines the logic behind charging administrative costs, the impact of learning curves on task completion, and the importance of tracking signals in improving budgetary estimates. The assignment also discusses different types of project changes, distinguishes between highly probable, extremely serious, and highly vulnerable risks, and addresses budgetary problems associated with project life cycle curves. Furthermore, it explores program budgeting, its value, and utility, and concludes with a detailed explanation of the Failure Mode and Effect Analysis (FMEA) process, outlining its six key steps and application in project contexts. The assignment draws on several academic references to support its analysis.

Running head: PROJECT MANAGEMENT
Project Management
Name of the Student:
Name of the University:

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1. Disadvantages of top-down budgeting and bottom-up budgeting
The to-down budget has some disadvantages such that it creates project budget which
is not involved with daily activities and result is requirement of extra project expenses. A low
level of project budget is accepted due to lack of resource participation. In this case, there is
few chance in providing training to the junior staffs regarding budgeting (Meredith, Mantel
Jr, & Shafer, 2017). Therefore, estimating the budget without taking input from key
personnel lead to underfunding and overfunding of the project.
Disadvantage of bottom-up budgeting is that it requires more time as compared to
top-down budgeting. The manger creates project budget by considering past budget and
expenditure patterns while including cost projections (Wangchuk & Turner, 2019). In top-
down budgeting, the experts involved in project budgeting have lack of skills in field of
budgeting and financial reserve allocation.
2. Logic behind charging of administrative cost
Charging of the administrative cost in project planning is focused on total completion
timeline of project. There is an increase in cost of administrative due to length of the project
plan. Long project should take more administrative resources as compared to short time
project. The administrative cost in any projects are wages and benefits of accounting staffs,
consult expenses, depreciation of office equipment, office suppliers, rent of building, wages
and benefits of legal staffs and corporate management (Talib & Ismail, 2017). Therefore,
those expenses are concerned ion finishing time of the project.
3. Task uses complex equipment to have learning curve rate
Learning curve is graphical representative of how there is an increase in learning
comes from greater experiences or how individual can perform complex tasks. The learning

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curve rate is corresponding to decrease in time as well as cost that each time output becomes
double. A lower rate of learning curve decodes in faster rate of learning. In this case, if it is
assumed by complex and machine is automated, then the manufacturing plant has slow
learning rate of 95% (Robbins, 2019). In addition to this, by complex, it is expected that the
workers are required high skill to operate complex equipment, then it is expected to have a
learning rate of 70%.
4. Tracking signals improve budgetary estimates
Tracking of project cost involves with estimation of project budget, establishment of
project control and measurement of project cost results. Therefore, when there is any
disturbance in tracking signals, it provides impact on cost and budgetary estimation. It is
possible that the impact would be both positive and negative. The project manager is
responsible to prepare future estimates and allowed the project members to understand cost
controlling (Nan & Saligrama, 2017). By investigating the cost errors, the project manager
can study how to do unbiased estimation.
5. Kinds of changes in project
As mentioned in section 4.4, there are three major changes in a project, budget as well
as schedule. Some changes are occurred owing to error in cost estimation done in what way
to attain the project tasks. Those changes are occurred due to technical uncertainties. Other
changes occurred as the project team and client should learn about project scope. It derives
from increase in knowledge of project team and client as well as sophistication of the
development (Meredith, Mantel Jr, & Shafer, 2017). The third change occurred due to
passing of new law, policy by governmental agency and standards. Those changes can
change rules of conduct in which the project is functioned to determine budget. Among these
three changes, two of the causes are occurred at same time (Sharp & Yu, 2019). New

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knowledge of opponent’s new product can lead to make changes on performance goal of
project and require changes in how to achieve the project tasks.
6. Distinguish- highly probable, extremely serious and highly
vulnerable areas
Highly probable risk: It is a type of risk which is very likely to occur. It is not
focusing on how major and minor risks are just likely to happen. This risk has higher
probability and likelihood to occur. The consequences of this highly probable risk are
negligible.
Extremely serious risks: It is a type of risk which will take major influence if it
happens. It is not pay attention to how likely the risk is going to happen. The outcome of this
risk provides effect on project cost, time as well as scope. Then, the project plan becomes
unacceptable by the project sponsor and project stakeholders (Meredith, Mantel Jr, & Shafer,
2017). This type of risk has significant consequences which its likelihood of incidence is
from low to very high.
Highly vulnerable areas: It is referred to project risk which is both probable and also
extremely serious. Therefore, highly vulnerable area is a combination of both type of risks.
The consequences of this risk is either negligible or consequence will be low to very high.
7. Budgetary problems
In each of the project, there are difficulties of budgeting with S-shaped as well as
exponential formed life cycle curves. A straight line of the project life cycle defines impact of
the budget cut which is constant through entire project work. A slope greater than 45 degrees
defined that there is a change in project budget and it is proportional to large impact on
completion of plan work (Meredith, Mantel Jr, & Shafer, 2017). In addition to this, slope less

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than 45 degrees defined that there is a change in project budget as well as it is proportional to
less impact on completion of project work.

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8. Program budgeting
Thiry (2016) stated that the program budget is designed for particular activity and
program. It is the project budget included revenue as well as expenses for particular project
program. Program budget is used in various organizations like businesses as well as schools.
The program budget is a cost uses resources to perform task. The activity budget is such a
budget where costing is done using activity based cost considered overhead cost. Based on
outcome of project, there is allocation of resources on activity (Meredith, Mantel Jr, &
Shafer, 2017). The activity budget is contained expenditures like phone, labour and others.
No, if the firm usages program budget for its project, formerly activity budget is not
wanted. The program budget is related to project expenditures directly to the plan action plan
in addition shortened the problem of manager to manage budget.
9. Value and utility of program budget
When the firm is decided to use the program budgeting for project, then the program
budget is provided a basis to make costing decisions. It is provided with procedures of
resource allocation that can incorporate business efficiency along with accountability
(Harrison & Lock, 2017).
10.Failure Mode and Effect Analysis
Following are six steps used for relating FMEA to various projects:
Step 1: FMEA Number: It is a log controlled number used in the project to track
documents.
Step 2: Part number: FMEA is used for a specific part or process. When it is used for
a project process, then it is required to follow every step in the process. It is required to
capture it in first column of FMEA sheet (Meredith, Mantel Jr, & Shafer, 2017).

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Step 3: Potential failure mode: From this step, the critical part is started, and in this
step it is required to understand failure mode for process part. It is required to understand
how process fail to meet with its specifications, how the customers consider failure and
rejection.
Step 4: Potential causes of failure: In this step, there is identification of causes which
provide direct impact on failure mode means root causes (Lee et al., 2017).
Step 5: Potential effects of failure: It describes effects of what the customers can
notice and experiences (McElroy et al., 2016).
Step 6: Current control: In the final step, there is capturing of current controls to
prevent and notice failures mode, besides based on it there is assigning detection rating.

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References
Harrison, F., & Lock, D. (2017). Advanced project management: a structured approach.
Routledge.
Lee, H., Lee, H., Baik, J., Kim, H., & Kim, R. (2017). Failure mode and effects analysis
drastically reduced potential risks in clinical trial conduct. Drug design, development
and therapy, 11, 3035.
McElroy, L. M., Khorzad, R., Nannicelli, A. P., Brown, A. R., Ladner, D. P., & Holl, J. L.
(2016). Failure mode and effects analysis: a comparison of two common risk
prioritisation methods. BMJ Qual Saf, 25(5), 329-336.
Meredith, J. R., Mantel Jr, S. J., & Shafer, S. M. (2017). Project management: a managerial
approach. John Wiley & Sons.
Nan, F., & Saligrama, V. (2017). Adaptive classification for prediction under a budget.
In Advances in Neural Information Processing Systems (pp. 4727-4737).
Robbins, T. R. (2019). A Learning Curve‐Based Assembly Game. Decision Sciences Journal
of Innovative Education, 17(4), 344-362.
Sharp, I., & Yu, K. (2019). Link Budgets and System Design for Positioning Systems.
In Wireless Positioning: Principles and Practice (pp. 241-271). Springer, Singapore.
Talib, N. F. M., & Ismail, R. A. M. (2017). Effect of Financial Management on Budget and
Budgeting Process. International Journal of Business and Management, 1(1), 18-21.
Thiry, M. (2016). Program management. Routledge.
Wangchuk, D., & Turner, M. (2019). Aligning top‐down and bottom‐up in development
planning: The case of B hutan. Public Administration and Development, 39(2), 59-68.