Project Budget : Cost Management Essay

Project Budget : Cost Management Essay

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Week 6 Project Schedule and Budget
Bongbong Alfaro
MGMT 404
Professor Andre Franklin
DeVry University

Project Schedule and Budget
Part 1: Project Budget (Cost Management)
1. Explain your approach to estimating the project cost (e.g. top down, bottom up, etc.) and why that method was chosen.
In estimating the project cost, I need to determine which method is preferred to use either top down or bottom up approach. As an owner, I will choose that will fit my project which is the top down strategy because I should know how much the project should cost. In addition, this amount is divided between the work packages. Also, according to the text, the advantage of the top-down budgeting approach is that it focuses on achieving the project within the budget allocated and leads to efficiencies and reduction in wasteful practices. In other words, project will equally distribute evenly to all the workers who are part of the project.
2. Create a table that shows the original budgeted costs (from the charter) and the actual budgeted cost (side by side). Include line items for labor, materials, contract, equipment, travel cost, and so on.
The Filipino’s Best Cuisine Restaurant
Estimated Budget $200,000
Labor cost $20,000
Materials/Equipment Cost $80,000
Travel Cost $10,000
Number of Contractors 5
Total Project Costs $125,000
Extra Savings $75,000

3. Compare the budget from the charter to the final budget and explain any variances that occurred from your original budgeted cost in the project charter and the current project cost (include your original cost for the project).
The project began in July 6, 2015. Day one, the estimated budget for this project is $200,000. The labor cost is $20,000, materials/equipment cost is $80,000 an...

... middle of paper ...

...greement or comprising is the best solution for all problems. Also, recognizing other ideas is important especially working as a team.
3. What structure would you select for your project: functional, weak matrix, balanced matrix, strong matrix, or pure project? Why?
The structure I selected for my project is functional because for a reason. First, functional can be distinguish and easy to build instead of other structures. Second, functional structure is more general than other structure because it is more commonly type used in business today. According to the text, the logic of the functional structure is to group people and departments performing similar activities into units. In other words, organizations using functional structure work on multiple projects.
Pinto, J. K. (2013). Project management: Achieving competitive advantage. Boston: Pearson.

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