Generally, risk is considered to be a concept which is difficult to measure. Uncertainty in cost and risk has always been a complex part of every project. The purpose of cost analysis is to help decision makers to recognize and represent different variables affecting investment risk and eventually predict the cost of the project. The general practice in cost analysis is to divide the project into smaller cost variables and probabilistically estimate the uncertainty of each item which ultimately assists in the final calculation of project cost. However, dependencies among these items should also be considered otherwise the accuracy of the cost estimation is jeopardized.
A project success is dependent on the careful calculation and organization
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The model in this paper suggests the handling of the correlation issue by modeling the uncertainty and indicators which affect cost items. Introduction
Project managers use cost analysis in order to make estimates about the cost of the projects. The difficulty in this type of analysis is that, when a project becomes complex, there are a lot of items that affects the cost. Cost analysis also includes cost uncertainty analysis which helps decision makers to understand not only the potential investment risk but also the nature of risks for a particular project and help to understand possible measure to mitigate such risks.
The trouble in project cost uncertainty is that the interdependency between the cost items or the effect of cost changes of one cost item to another is rarely considered. Without considering such factors, there is always a risk of the over exceeding the initial cost estimation of a project. Such risk also creates other risks like times delays and performance issues (Elkjaer, 2000) (Wang, Wang, & Lai, 2008).The success of a project has generally been associated with the achievement of the goal estimation of time, cost and quality of the project (Atkinson,
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It hasfrequently been used in various fields like medical diagnosis, forecasting, automation, and productioncontrol (Heckerman, Mamdani, & Wellman, 1995). A Bayesian belief network is constituted of both quantitative as well as qualitative parts (Van Der Gaag, 1996).All projects are unique to each other by nature (Project management institute, 2013).Due to this reason; the data and facts obtained from one project may not always be relevant or if relevant may not always be applied to others due to their variations. Often the data collection from long-term projects is timely and costly. However, experts and their opinionsare often obtainablewhen required which can be beneficially used as a source of information (Shepherd, Hubbard, Fenton, Claxton, Luedeling, & de Leeuw, 2015). This is where BN comes as a handy tool to take advantage of this expert knowledge with combination of available facts and information to derive necessary prediction whenever
Cost is the allotted budget required to complete the project. Cost includes material, resources, labor and any item within the project which has a cost associated with it. The three constraints are interdependent and a change to one can affect the one or both of the other constraints. If more requirements are added to the scope of the project, then it is likely for the amount of time and cost to increase as well.
This allows them to make the most accurate decision that they could with the information
In the article, “Past Experience is Invaluable For Complex Decision Making,:” it
Sensitivity Analysis The sensitivity analysis focuses on examining how Chipotle’s valuation changes when some key inputs vary. Two of the most important inputs of the valuation are the weighted average cost of capital (WACC) and the perpetuity growth rate. In this thesis, it is assumed that Chipotle would have a WACC of 6.65% and a perpetuity growth rate of 2.84%, which would result in a share price of $443.90 for Chipotle.
There are many benefits that the BIS can bring to an organization such as boost productivity, sales and market intelligence, the setting of more accurate and realistic goals, positive return on investments, gain insights into consumer behaviors, operational visibility and identification of key trends (Holley, A. 2015). Recommendations for developing and using the BIS described in this case, include the use of an effective BIS that incorporates different factors or circumstances in the internal and external environment of the organization such as sales, costs, weather, items or services offered by the company, and trends. Another reason to implement BIS is to reduce voluminous amounts of irrelevant data, poor data quality, and user resistance that affect the effectiveness of
Abstract The Wilkerson Company started facing declination in profits due to the price cutting on their pumps. On the contrary, while the price pumps were decreasing to record numbers, the flow controllers, which controlled the rate and direction flow of chemicals, could increase its prices without significant loss or any competitive response. Wilkerson, his controller, and manufacturing manager developed an activity-based cost model (ABC) to better comprehend the various demands that each product line makes on the organization 's indirect and support resources. Exhibit 1 showed us our operating results, Exhibit 2 showed us our product profitability analysis, Exhibit 3 displayed our product data, and Exhibit 4 was a compilation of the monthly
Companies like FedEx use them to determine the effects of price change or new services, and has seen 65%-90% accuracy. This ability to determine the best solution before it happens is an incredible achievement. Making changes that aren’t well receptive can cost your business customers, reputation, and much more. Putting out the right plan the first time can save your face and more importantly, you cash flow. For the city planner, predicting which bus stops will have the
Risk responses are guided by our established risk tolerance. In setting these goal one of which was to finish six months eelier than the project actual did we all see the project management description of coming in on time and budget with projects.
Over the years, mass communication has been defined in several ways. While some view it as a process, others perceive it as a skill. But apart from these two classifications, I particularly view mass communication as a tool since it is an essential device that can be used in one’s everyday life. It is an instrument all humans can make use of in delivering their intended messages to their family, friends and even to strangers. Charles Berger and Richard Calabrese suggested the same perception as they proposed their theory called the Uncertainty Reduction Theory.
e. How would you gauge the project’s success? Could success be measured? If so, when? Ans.
By being fully aware of its function and implications is an important aspect of the project manager’s role and responsibility. The triple constraint is meant to be an asset to the project manager’s arsenal and should not be viewed as a hindrance. This assignment has shown about how and the importance of comprehensive evaluation on the Triple Constraint (Time, Cost, Scope) in a project under uncertainty situation. We introduce an index called as Project Reliability.
Plant-wide allocation method - method of allocating costs that uses one cost pool, and therefore one predetermined overhead rate, to allocate overhead costs. Departmental allocation method – is very similar to a plant-wide allocation method, however in this method one cost is allocated to a particular department. Activity-based costing (ABC) method was created in 1980s. It uses several cost pools, organized by activity, to allocate overhead costs in contrast to previously popular models of allocation of overhead, e.g. plant wide allocation uses one cost pool for the whole plant, and department allocation uses one cost pool for each department (K.Heisenberg, J.B.Hoyle, n.d.). Let’s have a look at five basic steps used in activity-based costing:
EXECUTIVE SUMMARY TABLE OF CONTENTS Executive Summary 1 Introduction 3 Competitive Situation 4 Variable Costing 5 Existing Costing System 6 Diagram ABC 8 Activity Based Costing & Profitability 9 Conclusion 14 Bibliography 15 INTRODUCTION COMPETITIVE SITUATION Firstly, here is a brief description of what Wilkerson Company specializes in. According to our case study and various online sources, Wilkerson manufactures and markets a complete line of compressed air treatment components and control products.
Assignment: Teradyne Corporation: Jaguar Project Case Students Name Institutional Affiliation Teradyne Corporation: The Jaguar Project Case Introduction Teradyne corporation is a semiconductor test machine manufacturer. The new range of testing equipment had been eagerly awaited since the traditional system had exhibited quite a number of challenges in project development. The project introduced useful aspects of project management such as formal project tracking tools, effectively and adequately designed development process and the principle of upfront planning. O’Brien’s strategies had experienced much success especially in hardware development but seemed to struggle in the software department in software implementation. The main question is `Did the new tools affect development processes.
Reflective Journal Student Name: Talita Silva Lima Programme: Higher Diploma in Science – Cloud Computing Month: July 1. Project Management In this section I will explain in detail my project management through a Gantt Chart and what I have done since my last journal until now, how my time management is going in order to delivery this project before the deadline and some of my achievements.