Case Study: Project Budget, Schedule, and Resource Allocation

Desklib provides past papers and solved assignments for students. This project explores budget, schedule, and resource management.

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....................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
This project deals with various aspects which are to be considered in preparing the appropriate
budget. What all factors are to be taken into consideration while designing an appropriate budget
are discussed in this project. All the assumptions which are included in preparing the budget are
considered and discussed in detail. Another part of the project deals with key milestones that are
to be considered to schedule a case study. Different methods and tools used to prepare a budget
have been properly discussed in this project. Along with this merits of all these tools and
techniques have been briefly discussed in this project. Finally, the project focuses on all the
resources required for the successful completion of the project. Critical paths have been analysed
and discussed in detail.
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1) Development of Budget on the basis of case study inclusive of assumptions.
Budget is a very important part of the organization as it helps the organization in deciding its
future course of action. A budget helps an organization inefficient utilization of resources
thereby making activities of the organization more cost effective. In addition to these budgets
help in variance analysis. Variance is calculated when the organization's activities have deviated
from the budgeted or planned activities. Variance analysis helps the organization in analysing
what shortcomings an organization has in the performance of its activities. The budget also
forms a basis of comparison as it helps the organization in comparing its budgeted activities with
other organizations operating in the same industry. Budget is of great importance to an
organization. Some of these are discussed below: -
Monitors Efficiency- Budgets helps in monitoring the efficiency of the different activities
associated with the organization. Previous budgets can be compared with the current budgets so
as to analyse the efficiency of the organization.
Improves Communication- Budgets helps in improving communication between lower level
management and higher level management as it provides a basis of communication within the
organization.
Sets the priorities- Budget helps in setting up the priorities within the organization. Setting up
priorities is very important in the organization as it helps the organization in deciding which
activities are to performed first as compared to other activities.
Controls Expenditure- Budgets helps in controlling excess expenditure that could have been
incurred had the budget not been prepared. This helps the organization in working in a cost-
effective manner, thereby improving its cost-benefit ratio.
In the given case the company is facing difficulty in storing its oil as most of its tanks are not in
good condition. In the given case the company should prepare the budget with respect to the
amount of expenditure it is willing to incur in respect of repair and maintenance. The company
should also invite quotations from various persons who can provide repair and maintenance
services. The quotation which suits the most to the organization should be selected.
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Various assumptions that are considered in this project are: -
 Assumptions with respect to the life of the tanks.
 The cost to be incurred in repairs and maintenance of the tanks
 Time is taken in repairs and maintenance
 Overhauling charges incurred by the company during the time of repair and maintenance.
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2) Schedule for the case study project identifying the Key milestones of the project
deliverables
Key milestones refer to the mark in a project that signifies or specifies any change or
development. Milestones are a very important aspect in project management as they help in
achieving the desired goals in a unified manner without depending on the outside or external
sources. Different methods and techniques which are used in the preparation of budgets are
discussed as below: -
 Incremental Budgeting- this type of budgeting is based on previous years’ actual data and
modifies that data according to the current situation or conditions. This is considered one of the
most common methods of budgeting. This method of budgeting is helpful when the primary cost
drivers remain constant and do not vary from year to year. This method of Budgeting is very
easy and less time-consuming. The major drawback associated with this type of budget is that it
does not take into account external factors which also affects the organization like Inflation.
 Activity-Based Budgeting- it can be described as top-down budgeting approach which is used to
describe what amount of inputs are required to achieve the desired output. It is considered as top-
down budgeting as major decisions are taken at the top level management and they are further
communicated to the lower level managers. In this type of budget information flow from top-
level management to bottom level management. This type of budgeting takes a lot of time and
consistent efforts of the higher level management as they are mostly involved in the budgeting
process.
 Value proposition budgeting- this type of budgeting is used when a lot of discussion and
questions are to be taken into consideration. While preparing this type of budget, it is considered
that whatever is included in the budget, delivers proper value to the organization within the time
period for which the budget is prepared. This type of budgeting aims at eliminating unnecessary
expenditure and forms a basis of cost-benefit evaluation.
Various points which are considered while preparing this type of budget are, why a particular
amount is included in the budget. Does a particular expenditure create value for the
organization? Cost-benefit analysis is properly done while preparing this kind of budget. Each
and every cost which is associated with the different activities are considered while preparing the
budget. Future outcome of different activities is pre-evaluated, because of which organization is
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able to decide what future course of actions it should take in order to achieve its desired goals or
objectives.
 Zero Based Budgeting- This method of budgeting is also one of the most frequently used method
of budgeting as this method is based on the assumption that all the departmental budgets are
zero. This method of budgeting is very stringent as it focuses on the fact that all unnecessary
expenses are to be eliminated.
In the given case Activity-Based Budgeting is considered for preparing the budget as it is
assumed that information flows from higher level management to lower level management. This
budgeting sits the most to the organization as it future activities can be easily evaluated under
this type of budget.
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3) Resources required for completion of the project
For successful completion of the project it is to be noted that the project should be properly
approved by the competing authority. This ensures that all the key materials associated with the
project have been properly analysed and all the uncertain events have been taken into
consideration before approving the project. All the critical factors are to be analysed in detail
before signing the project. This helps the organization in evaluating major drawback associated
with the project thus helping the organization in evaluating cost and benefit analysis. Once the
project is approved it can be considered as a baseline for the rest of the projects.
Critical path should be analysed in detail as it helps in evaluating which all factors are important
for the successful completion of the project. The organization should focus on these critical paths
so that projects can be completed in a timelier and effective manner thereby meeting
organizational goals. Proper emphasis on critical path helps the organization in gaining an edge
over its competitors which ultimately helps the organization in long run.
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Conclusion
This project concludes various aspects required in the preparation of a budget. Various factors
which are prerequisite for preparation of a budget have been discussed in detail. Along with this,
all the assumptions have been discussed in detail which helps an organization in preparing the
budget. Furthermore, key milestones have been discussed with respect to the budget. In addition
to these different methods and techniques used in the preparation of the budget have been
defined. Along with this merits associated with different method shave been properly defined.
Last part of the project discusses the various resources required for the successful completion of
the project. What are the critical paths of in relation to successful completion of the project have
been discussed in detail.
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References
 Andor, G., Mohanty, S. K., & Toth, T. (2015). Capital budgeting practices: A survey of
Central and Eastern European firms. Emerging Markets Review, 23, 148-172.
 Lauth, T. P. (2014). Zero‐Base Budgeting Redux in Georgia: Efficiency or Ideology?.
Public Budgeting & Finance, 34(1), 1-17.
 Rossi, M. (2014). Capital budgeting in Europe: confronting theory with practice.
International Journal of Managerial and Financial Accounting, 6(4), 341-356.
 Sunarni, C. W. (2013). Management accounting practices and the role of management
accountant: Evidence from manufacturing companies throughout Yogyakarta, Indonesia.
Review of Integrative Business and Economics Research, 2(2), 616-626.
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