QSO 345 Milestone Four Cost Management Plan - Predictive Brandon Meadows

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QSO 345 Milestone Four Cost Management Plan - Predictive Methodology Cost Management Plan Introduction The purpose of the cost management plan is to review the costs associated with Project Destiny, the work breakdown structure, project reporting, a response to cost variance, change control as well as project budget. Cost Management Approach Throughout Project Destiny cost management will be followed carefully until the completion of the project. The project manager will need to establish controls of project costs, analyze the variance between actual cost and planned cost and manage the project within cost constraints (uCertify). Romet facility has never moved before, the analogous estimation technique nor the parametric estimation technique would not be best. Project Destiny would follow the three-point estimation technique. The three-point estimation would be best for this project because it predicts costs and timelines while eliminating uncertainties which calculating cost and duration (Pmp, 2022). To ensure control of the project cost and timeline, the project manager should utilize earned value management. This will give the project manager a snapshot of the current status of the project (uCertify). Following the earned value management approach would allow the project manager to see where they are in the project at any given time and the degree of the work completed. If there is a variance, the project manager can review the cost variance. This will allow the project manager to see the “difference between the earned value and the actual costs for work completed to date (uCertify). The project manager could also use schedule variance to review the “difference between the earned value and the planned value for work completed to date” (uCertify). By utilizing all these options at different points in the project will provide the project manager with the most information. Project Costs The below table reviews the work breakdown structure for Project Destiny. The WBS ID chart has been copied from Milestone Three but updated to include estimated costs and additional WBS information. WBS ID WBS Name Estimated Cost 1.1 Legal and regulatory 1.1.1 Lease $5,000 1.1.2 Permits $3,000 1.1.3 Zoning $10,000

WBS ID WBS Name Estimated Cost 1.1.4 Contractor selection 1.1.5 Certification 1.2 Initial build out $188,000 1.2.1 Quality department & Supervisors $100,000 1.2.2 Proving $30,000 1.2.3 Electrical & Pneumatic $60,000 1.3 Plant 1.3.1 Plant construction 1.3.2 Proving room 1.3.3 Electrical 1.3.4 Pneumatic 1.4 Equipment $162,000 1.4.1 Anodizing line $32,000 1.4.2 Removal 1.4.3 Move 1.4.4 Install 1.5 Moving 1.5.1 Machine shop 1.5.2 Assembly $35,000 1.5.3 Paint line $35,000 1.5.4 Auxiliary $19,000 1.5.5 IT services $76,000 1.5.6 Office $100,000 1.6 Transition 1.6.1 Build Inventory 1

WBS ID WBS Name Estimated Cost 1.6.2 Build Inventory 2 1.6.3 Support customer 1.7 Close Table 1, Project Cost Breakdown (QSO 345 Milestone Four Scenario -Predictive Methodology) Reporting Format The project manager will carefully track project costs during Project Destiny. If at any time the project budget is off track, the project manager will be in contact with the project sponsor to review and discuss change. The project manager should report the earned value analysis to the pertinent stakeholders. As requested by stakeholders, communication will be weekly. This allows effective, timely communication between the project manager and the stakeholders. The reports will be sent in the weekly email communication. The report will cover the earned value management analysis, where the project is financial and timewise as well. The reporting can be in graphs, charts or tables. Cost Variance Response Process Project Destiny will follow the cost variance management approach. This will allow the project manager to closely monitor the budget by calculating the difference between earned value and the actual costs of the project. Depending on where the project is, the threshold on the cost variance will vary. If the area of the project has just begun and is already approaching the cost estimate, the cost will need to be reviewed quickly. Otherwise, as time goes on through the project and the budget is closing in but so is the end of the project stage, the budget will still be reviewed but there may not need to be a change. If the cost goes above the estimated threshold, the project manager will need to discuss quickly with the project sponsor and even the stakeholders. This will need to be discussed immediately rather than waiting until the weekly update. Cost Change Control To implement cost change control for Project Destiny, the project manager must utilize a few different processes. This includes reviewing the project scope to be sure the project is following the scope of the project. Then, the project manager will need to review the cost estimated baseline. If changes need to be made to the project, the project manager will need to put in a change request to the project sponsor formally for best practice (uCertify). The project manager and project sponsor will need to discuss the need for change, formally log and document the change, evaluate the change and the impact, get a decision from appropriate stakeholders, create a new baseline if approved and update documentation and finally, communicate with the team

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and stakeholders (uCertify). Following the process for a cost change will ensure the project manager is abiding by procedures Project Budget The chart below outlines the budget estimates for Project Destiny. The work breakdown is grouped into larger categories for similar project steps creating the budget categories. The chart also allots for a contingency reserve and a management reserve. It reviews the projected costs needed to complete Project Destiny Budget Category Cost Estimate Contingency Reserve Management Reserve Total Budget Legal, regulatory $18,000 $18,000 Construction $378,000 $378,000 Equipment relocation & installation $283,000 $283,000 Information technology services $76,000 $76,000 Office moves $115,000 $115,000 Contingency reserve $20,000 Management reserve $10,000 Total Budget $900,000 Table 2, Project Budget Breakdown (QSO 345 Milestone Four Scenario -Predictive Methodology)

References Pmp, F. U. (2022, August 10). Three-Point estimation Technique in Project Management |. Fahad Usmani. https://pmstudycircle.com/three-point-estimation/ QSO 345 Milestone Four Scenario -Predictive Methodology. https://learn.snhu.edu/content/enforced/1399684-QSO-345-J7739-OL-TRAD- UG.23EW1/Course%20Documents/Predictive/QSO%20345%20Milestone%20Four %20Scenario%20-%20Predictive.pdf? isCourseFile=true&_&d2lSessionVal=3gUtP8pRXmTbkNP3b1sGMUZ7M&ou=139968 4 uCertify. Lesson 5 : Planning, project work, and Delivery: Predictive Methodologies - UCertify. uCertify. https://www.ucertify.com/app/?func=ebook&text=cost %20management&chapter_no=6#07TmA

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