Discussion Question 1
Why is it important to identify and schedule resources correctly early rather than later?
Correctly identifying and scheduling resources early helps to build a more realistic budget and avoid the cost overruns. High risk schedule and budget often come in a rush. The later the resources are identified and scheduled, less time is available to review the schedule plan and to avoid the cost overruns.
Some practices I would use if faced with situations where resources were over allocated:
Because the over-allocated resources may be caused by different reasons. A change to the project work calendars, requirements or constraints all may make the resources over allocated. So, practices to solve this problem should be taken depending
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Building “a solid budget and cost reporting system” (p. 1) would make the control system be maintained more easily.
2. Keep tracking on and reviewing the process, change it if necessary to maintain or reduce the cost.
3. Carefully analyze and choose the methods of cost reduction. A method like strategic cost reduction should be considered prior to other traditional methods that might make big changes to the process.
The most common reasons for cost overruns is the unrealistic budget caused by an inappropriate cost estimating.
3 steps to address cost overruns:
1. Preventing the appearance of cost overruns is the most important. According to Balaji (2012), And 6 ways are given: “1. Pay a lot of attention to project planning 2. Check a vendor’s capabilities before hiring 3. Attempt to stay within the scope that was originally planned 4. Use good scheduling tools & charts 5. Make sure the stakeholders in the project are on the same page 6. Constantly track and measure the progress” (p.1)
2. If the cost overruns have appeared, identify and analyze it carefully and find the root reasons. It may be an unrealistic budget or the poor management.
3. Taking specific actions immediately to solve the cost overruns caused by specific reasons.
Departmentalization base is the big plan by which jobs are grouped into units.in facts few organization show only one departmentalization base. The most common bases are function, product, location, and customer. The decision to use many bases is usually based on the specific needs of the corporation and on the strong
What are the symptoms of cost system failure? The system assigns overheads only based on “normal volume, which usually are labor and materials. This lead to distortions cost in the calculation of products cost, and many indirect and support cost, which are not used by products in normal volumes base, are included. Therefore, the system provided inaccurate information, as Sinclair recalled: “we didn’t even know our costs.”
-A monthly claim report lists all claims the insurance carrier has denied or not paid by the required time limits set by the state. It also has a listing of detailed information about the claim itself to better identify the exact claim listed. The monthly claim report is necessary for reimbursement because they must be sent to an auditing team to make sure the correct attention to the overdue claims so that they are paid and if not paid the provider should be send a notice on why the claim is not being paid or why the provider is going to be receiving a partial payment. This is called a remittance advice sent to the providers office so that they claim may be edited and resubmitted.
When using routers, you need many routers in order to route the information to the correct location, as one router will not be able to manage this task. Explain how the routing schemes handle this problem.
Even though a myriad of tools and techniques learnt in the Strategic Cost Management and Strategic Business Analysis courses are not fully exploited in this essay, it is generally recognised that those techniques are useful for a corporate to formulate strategy, do strategic planning, control costing and quality, as well as eventually elevate its values, regardless the nature and size of organizations.
There are some valid examples from literatures as to why budgets are may be unnecessary tool in a company. The problem with budgets is that the managers may be rewarded when the planned budgets are achieved. This system may lead a poor quality of budgets, because the managers would most probably only focus on achieving the target and will try to set lower goals. Jensen (2003, p.381) stated that people is getting rewards for lying in the budget-based system; as a matter of fact, the reality is that in most organizations would use budget system that rewards people for ruining important information and punishes anyone who does something that give benefit the organization. This type of activity is certainly unhealthy and completely misused the budgeting system. Other than that, if a company have a fixed-performance contract, may lead the managers into fear that if they do not spend any left overs in the budgets by the end of the year, their funding in upcoming years will be cut down (Gary, 2003). Based on Hackett survey, it showed that between 60 per cent and 90 per cent from the top 2000 global companies implement this type of contract. Hence, these practices are not that practical and may drag down the company’s performance. As stated by Welch (2005 cited in Libby and Lindsay, 2010, p.56) that budgets may conceal any opportunities and stunt growth of the
outlined in this report, but will need to be executed to ensure the increased profitability of
After analyzing our most recent annual report from 2012. We noticed that our operational cost is approximately $20,000 over our revenue. Looking at our data from previous years, the $20,000 over-budget has occurred in the past. In 2010, Partners in Health had approximately $90,000 in unused funds which carry over at the end of ...
The traditional budgeting approached consumed a lot of the time of the companies and still are unresponsive any change in external environment (Neely et.al, 2003).
Risk management is a major success key of project management in business world. With major budget overruns in parallel with significant delays, Sydney Opera House is a real example of poor risk management. Risk management requires effective planning, budgeting, and scheduling. First of all, the highest risks should be identified and evaluated in order to find methods to reduce their impact and exposure. Then, factors that cause risk should be addressed while factors that only correlate with the negative impact but do not affect it may be omitted. At this stage, interrelation between various risks should be accounted for to spot the core factors that should be treated in order to ensure effectively and stability of the project's functioning.
The overall purpose of cost accounting is to advise top administration and the management team on the most suitable and cost effective methods and actions to employ based on cost, capability and efficiencies of a given product or service. It can be defined as the method where all the expenditures used during execution of business activities are gathered, categorized, examined and noted down (Horngren & Srikant, 2000). Once these numbers are gathered and recorded the information is used to determine a selling price and/or to identify possible investment opportunities. Although the principal aim or function of cost accounting is to help the business administration with their decision making and business planning process, the cost accounting data
“A budget is a plan” (Finkler, Kovner, & Jones, 2007, p. 232). The budgeting process consists of two components forecasting the budget and maintaining the budget (Clark, 2005). In the budgeting process, the manager 's responsibilities include accountability, analyzing variances and managing expenses. When the actual budget differs from the forecasted budget, a variance has occurred and needs to be examined further. Budgets can be used in the both the internal and external benchmarking process to see how the organization is performing compared to similar organizations.
...h the full expenses included. Challenge overseeing and incorporating over a huge supply change and developing patterns.
The process of creating a budget takes management away from its short-term, day-to-day management of the business and forces it to think longer-term. This is because when a company creates budgets on their annual basis, they need to obey the limit of how much money can be spent on certain operations and try not to exceed the budget. Budgets are usually used to count the company’s expenditure to ensure that capitals are not wasted on unessential or unimportant items or the company does not overpay for economic resources used in the business. Therefore, by limiting the amount of capital that are able to be spent by the business may require owners and managers of the organisation to find new vendors or suppliers to acquire new business inputs, save money and meet budget limits.
Scheduling plays a vital role in the success of the project. Without scheduling, you do not know what is happening within the project and if you are on track for success or leading towards the pit for failure. Hence, lot of emphasize is given on scheduling of the project. It aids the project manager in multiple folds. It helps Project Manager manage the Cost of the Project, take decisions regarding the scope or time change within the project looking at all the activities scheduled. Scheduling also helps project manager to sync-up with higher management and provide a status update on the health of the project. A good schedule can eradicate the