NOVA Company Fashion Project: Cost Analysis and Budget Report

This report provides a comprehensive analysis of project management principles applied to a project for NOVA Company, a fashion brand. It begins with an evaluation of key costs at the initial planning stage, identifying marketing, research and development, and staffing costs. It then explains various cost estimation techniques, including analogous, parametric, three-point, and bottom-up estimating, highlighting their strengths. The report further details cost control methods and strategies such as budget planning, tracking costs, project change control, and time management. Suggestions are offered to improve the financial performance of future projects. The report includes a Gantt chart for project scheduling and a budget formulation, outlining expenses such as salaries, accommodation, and software. The report concludes by emphasizing the importance of project management in achieving business goals, covering cost control, budgeting, and the use of tools like Gantt charts.

Project
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Evaluation of key costs at initial project planning stage..............................................................1
Explanation of key strengths of different cost estimation techniques.........................................2
Explanation of key cost control methods and strategies to implement a new project.................3
Suggestions regarding the steps which could be taken to improve financial performance of
future project of NOVA company...............................................................................................4
PART B............................................................................................................................................5
Gantt Chart...................................................................................................................................5
PART C............................................................................................................................................7
Formulation of budget..................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Project management can be defined as the process which is used by business entities for
the purpose of initiating, controlling, executing and planning a project in systematic manner.
Main purpose of using it is to attain all the primary objectives of the organisation (Batselier and
Vanhoucke, 2015). This project is based upon NOVA company which is one of the highly
successful fashion brands. This assignment covers various topics such as critical evaluation of
relationship between project cost control and project financial performance and formulation of
Gantt chart. Along with this, this report also covers the generation of budget planning for the
project is also covered under this report.
PART A
Evaluation of key costs at initial project planning stage
Senior Project Officer of the project is planning to implement new cost control approach
in NOVA company. For this purpose it is very important to identify the key costs for the
organisation which may take place at initial planning stage. All of them which are related to a
fashion project are as follows:
Marketing cost: While planning to work on a fashion project it is very important for
NOVA Company to focus upon the promotion of all the products which are going to be launched
in the market in upcoming period. If managers are not able to determine the same then it may
create issues for it to aware clients about the items which willing offered to them in future. There
will be various expenses which are related to it and these are advertisement, promotions etc. By
estimating this cost the enterprise will be able to bear all its expenditures.
Research and development cost: In order to launch new fashion products it is very
important for the organisations such as NOVA company to conduct market research. With the
help of it the managers will be able to determine the current situations of market and launch such
items which are preferred by clients. In order to perform research and development activities
organisation will face various costs which includes the executives who will be recruited for the
job (Cleden, 2017).
Buying goods to manufacture products: In order to work on a fashion project the
organisations such as NOVA Company it is very important to buy material so that the products
could be manufactured. All the enterprises which are going to launch new items in the market
1

have to face this cost because without purchasing raw material it is not possible to offer a new
good to the customers.
Hiring staff members and professional: It is also one of the main cost which could be
faced by an organisation planning to work of a fashion project. If NOVA is planning to launch a
new item in the market then it will be very important for it to recruit new employees so that they
can help to reach long term goal. In order to make sure that the fashion project gets completed in
a specific time limit it is vital to hire a professional who can guide to make the new product
according to the customer's demand and market trends.
In order to work on a fashion project it is very important for NOVA Company to focus on
all the above described costs and keep an accurate estimation of them. With the help of it,
managers will be able to formulate strategies for future to deal with all the expenses in
appropriate manner (Cunningham, Salomone and Wielgus, 2015).
Explanation of key strengths of different cost estimation techniques
For all the project managers it is very important to estimate the costs which may take
place while working on a project. For this purpose, different estimation techniques could be
used. All of them are described below with their strengths:
Analogous estimating: This is one of the common cost estimating technique which is
used by project managers when they are having very limited information about the project. It
could be used in NOVA company for the purpose of forecasting the cost for new fashion project
as it provides quick results. It is also known as top down estimating model which is used to
determine expenses for future projects. Some of its strengths are listed below:
 While using it detailed information of project is not required.
 This technique can estimate the costs by comparing current project with previously
completed projects.
 The cost of using this technique is very low and it also offers quick results (De Marco,
2014).
Parametric estimating: This technique of cost estimation use historical as well as
statistical data to estimate cost for future project. While using it managers of NOVA Company
can take different variables from other projects and apply them to their present project. Results
which are generated with the help of this technique are more accurate as compare to previous
2

method because estimation of it is based upon more than one data. There are various strengths
of it which are as follows:
 More than one data bases are used to estimate cost with the help of this technique.
 The results provided by this method are more accurate as compare to analogous
technique.
Three point estimating: This costing technique is used by most of the project managers
for the purpose of reducing uncertainties and biases in the estimation process of costs. In NOVA
Company this technique is also used to estimate cost of fashion project (Techniques of cost
estimation, 2019). One of the key element of it is PERT (Program Evaluation and Review
Technique) which is the most common method of forecasting cost in three point estimation.
 In this technique three different estimates are determined by managers to get accurate
results.
 With the help of this technique, biases and uncertainties could be reduced.
Bottom up estimating: This technique of cost estimation is also known as definitive
technique. It is considered as the most time consuming, accurate and costly manner of
forecasting costs for business projects. In order to determine cost of all the activities it could be
used in NOVA Company which will help to forecast expenses of fashion project. All the
strengths of it are as follows:
 It provides highly accurate results which can help to estimate the right cost.
 With the help of it cost of different activities could be estimated separately (Harris,
2017).
Explanation of key cost control methods and strategies to implement a new project
There are various methods and stregies of cost control which could be used by business
entities such as NOVA Company. All of them are as follows:
 Planning the project budget: In order to control the costs which are taking place for
different business projects this method could be used. If managers of NOVA Company
are planning to create a project budget then they will be able to control the costs because
it will help to reduce over spending of funds. With the help of this strategy the
management will be able to meet all the organisations goals.
 Keeping track record of all the costs: It is also one of the effective strategy which can
help to control the costs because if all of them are recorded properly by management then
3

it can help to find the ways in which all of them are responded properly. In NOVA
Company this method could be used by project manager to control the cost because it can
help to find the areas which are resulting in very high expenditures and it can also guide
to form the plan to deal with it (Muriana and Vizzini, 2017).
 Project change control: It is also an effective strategy which can help to control the
costs for the projects on which companies are working. With the help of it managers in
NOVA Company will be aware of all the changes which have been made while
completing the projects. It can help them to estimate the costs which are taken place due
to the modifications. If they are aware of such expenses then they can formulate plans to
reduce them in effective manner.
 Effective time management: In order to complete project goals successfully it is very
important to focus on time management because with the help of it costs could be
reduced. If a project is completed before time then it will be beneficial to save different
costs such as salaries to staff, rent etc. In order to reduce the cost NOVA Company can
use this method as it will make it easy to run the project successfully in less time.
From the above discussion it has been determined that all the above described strategies
could be implemented by project managers in NOVA company because all of them can help to
reduce the cost for whole plan. All of them can also help to reduce the possibility of
overspending of budgets which are allocated to different project activities (Shirley, 2016).
Suggestions regarding the steps which could be taken to improve financial performance of future
project of NOVA company
There are various steps which could be taken by the management in order to improve
financial performance of future project at NOVA Company. All of them are as follows:
 Management within the organisation can compare its policies with other company which
will helps it to strengthen its policies.
 Managers should update the financial records on regular basis so that they can be aware
of latest changes in performance of company.
4

PART B
Gantt Chart
In order to complete the project of implementing new cost control approach Gantt Chart
is an important tool as with the help of it the total duration of a project could be determined. It
also helps to analyse that the activities which are performed by the staff members are conducted
according to the time limit which are decided for them previously. In order to complete the
project on time and track its progress it is vital to prepare Gantt Chart (Tsaturyan and Müller,
2015). The chart which is formed for NOVA Company is as follows:
5

6

PART C
Formulation of budget
In order to meet the cost of travel, training and other activities of the project organisation
is required to formulate a budget. With the help of it estimation of future costs could be made.
The budget for NOVA Company is as follows:
Particulars Amount
Own salary (3250*3) 9750
7

Two secretary's salary (120*2*60) 14400
Two Consultant's salary 14400
Accommodation cost 7200
All new PC Hard ware 4000
Project cost control software 5000
Total miscellaneous expenses 10000
Total expenses 64750
From the above table it has been analysed that to accomplish the goal of the project
completion it is very important for NOVA Company to arrange funding of at lease 65000 pounds
so that expenses could be dealt properly.
CONCLUSION
From the above project report, it has been concluded that project management is an
approach which is used by all the companies to manage, control and evaluate a project so that
long term business goals could be accomplished. There are various costs which may take place at
initial planning stage of a fashion project. These are marketing, research and development,
recruitment of new staff etc. Different cost estimating techniques includes analogue, parametric
etc. the strategies which could be adopted by companies for the purpose of cost controlling are
time management, project change control etc. For the successful completion of a project Gantt
Chart and budgets should also formulated by organisations.
8

REFERENCES
Books and Journals:
Batselier, J. and Vanhoucke, M., 2015. Evaluation of deterministic state-of-the-art forecasting
approaches for project duration based on earned value management. International
Journal of Project Management. 33(7). pp.1588-1596.
Cleden, D., 2017. Managing project uncertainty. Routledge.
Cunningham, J., Salomone, J. and Wielgus, N., 2015. Project Management Leadership Style: A
Team Member Perspective. International Journal of Global Business. 8(2).
De Marco, A., 2014. Project management for facility Constructions. Springer.
Harris, E., 2017. Strategic project risk appraisal and management. Routledge.
Muriana, C. and Vizzini, G., 2017. Project risk management: A deterministic quantitative
technique for assessment and mitigation. International Journal of Project Management.
35(3). pp.320-340.
Shirley, D., 2016. Project management for healthcare. CRC Press.
Tsaturyan, T. and Müller, R., 2015. Integration and governance of multiple project management
offices (PMOs) at large organizations. International Journal of Project Management.
33(5). pp.1098-1110.
Online
Techniques of cost estimation. 2019. [Online]. Available through:
<https://pmstudycircle.com/2012/06/4-tools-to-estimate-costs-in-the-project-
management/>
9