Detailed Cost Management Approach Plan for Revitalization Project

This document outlines a comprehensive cost management approach for a fish pond revitalization project. It details the cost approach, relevant policies and procedures, cost estimation tools, and considerations for long lead time and large capital items. The plan also covers cost management and information systems, cost reporting arrangements, and cost control mechanisms, including change thresholds. Furthermore, it defines cost management roles and responsibilities, assumptions, and constraints, and includes a risk review and lessons learned. The project's budget is around $52,200, and control accounts are created to manage costs effectively, utilizing Earned Value calculations to monitor financial performance. Cost variances are managed through change requests approved by the project sponsor, ensuring the project stays within budget and scope. This document is designed to provide a transparent and accountable framework for managing project costs effectively.

Table of Contents
Document Control.......................................................................................................2
Version Control................................................................................................................. 2
Document Release............................................................................................................ 2
Conditions of Use.............................................................................................................. 2
Table of Contents........................................................................................................3
Cost Management Approach.....................................................................................4
Cost Approach................................................................................................................... 4
Policy & Procedure............................................................................................................4
Cost Estimation Policy/Tools...........................................................................................4
Long Lead Time and Large Capital Items........................................................................4
Cost Management & Information Systems...............................................................5
Cost Reporting Arrangements.........................................................................................5
Cost Control.................................................................................................................5
Cost Changes and Thresholds.........................................................................................5
Cost Management Roles & Responsibilities...................................................................6
Assumptions and Constraints..........................................................................................6
Risk Review....................................................................................................................... 6
Lessons Learned............................................................................................................... 7

Cost Management Approach
Cost Approach
Cost approach is defined as one of the real estate valuation method that generally
surmises cost that must be paid by the buyer for the property that should be equal to the cost
that is used for building it. The budget that is assumed to be needed for completing the fish
pond revitalization will be around $52,200. It is found in order to manage the cost of the project;
control accounts will be created. The calculations that are related with Earned Value must
measure as well as manage the entire financial performance of the project. Although the cost
estimation for each of the activity is done so that the cost needed for executing each of the
activities of the project can be tracked quite easily there is chances of cost variances. The cost
variances can be managed by getting approval for the changes from the sponsor.
Policy & Procedure
The policy and procedures that are needed for the cost management approach are listed
below:
 It is very much necessary to track the expenditure of the project on regular basis in order
to keep track on the budget of the project
 Earned value calculation must be utilized for managing the entire financial plan of the
project
 The cost variances must be managed by the project manager by requesting for the
changes which should be approved by the project sponsor.
Cost Estimation Policy/Tools
The cost estimation tools are listed below:
 Expert judgement
 Analogous estimation
 Parametric estimation
 Bottom up estimation
 Three-point estimation
 Reserve analysis
Long Lead Time and Large Capital Items
Item
Descriptio
n
Long
Lead
/
Large
Capit
al /
Both
Phase
Required
Cost Funding Approva
l
Drawing
plan
Long
lead
Phase 1 $900 $950 Approved
Breaking
ground
Both Phase 2 $6,000 $6,500 Approved

Excavation Long
lead
Phase 2 $3,000 $3200 Approved
Fish pond
revitalizatio
n
Both Phase 2 $18,000 $18,200 Approved
Fencing the
area
Long
lead
Phase 3 $1500 $1590 Approved
Fertilization
of water
Both Phase 4 $5000 $5060 Approved
Cost Management & Information Systems
System Used For Name and Access Level
ERP system Managing the
services and products
Please fill
Cost Reporting Arrangements
The cost reporting arrangements are generally elaborated below:
 The costs of for each resources of the project should be analyzed and documented in
the form of needed project budget report
 Tracking the expenditure of the cost through project cost report
 Analyzing the profit of the project through cost benefit analysis report
Cost Control
Cost Changes and Thresholds
Activity Cost Funds Threshold
Drawing plan $900 $950 $920
Breaking ground $6000 $6,500 $6300
Excavation $3000 $3200 $3100
Fish pond
revitalization
$18,000 $18,200 $18,100
Fencing the area $1500 $1590 $1560
Fertilization of water $ 5000 $5060 $5040

Cost Management Roles & Responsibilities
Ref. Rule/Decision Category Comments
Role
Sponsor
Project Manager
Project Support
Project Steering Committee
Supplier
Project Team
PMO
1. Tracking the budget of
the project
Project
cost
The
budget of
the project
is tracked
so that the
entire
project
will be
completed
within the
approved
budget.
N/A
Yes
N/A
N/A
N/A
N/A
N/A
2.
Changes in the
resources of the
project
Resourc
e cost
Changes in
the
resource
of the
project
will rise
the cost of
the
project.
Yes
Yes
N/A
N/A
N/A
N/A
N/A
Assumptions and Constraints
The assumptions of the project are provided below:
 The project will be executed within the approved budget that is around $54,000

 It is assumed that the entire project will be completed within the expected time.
The constraints of the project are listed below:
 It is very much important to finish the project within the approved time and budget
 It is important to follow the project scope in order to achieve the project objectives.
Risk Review
Risk Impact Probability
Hiring cost of resources High Medium
Improper tracking Medium High
Lack of budget High High
Lack of experienced team
members
Medium Medium
Lessons Learned
Lesson Interna
l/
Extern
al
Source
What is being done in this project?
Proper management of
project cost is necessary for
achieving success.
Internal
source
The cost of the project is managed successfully
for finishing the project within the approved cost.
Earned value analysis must
be conducted for analyzing
financial performance
Internal
source
Earned value analysis is necessary for
analyzing the financial performance.

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