Week 4 Assignment: Present Your Budget Plan ✓ Solved

Week 4 Assignment Present Your Budget Plan

This week you will work on developing the project baseline budget, which is part of the project plan. Using your ongoing project scenario for your Signature Assignment, construct a balanced budget for your project, discussing each item and the rationale behind the estimated amounts, so that it is close to a real budget. Keep in mind both typical organizational financial constraints as well as theoretical and conceptual contexts for budgeting. You will need to support your budget justifications with scholarly references. These numbers and figures must be sustained by reasonable explanations that recreate a real budget.

You can use software like MS Project or MS Excel for your budget table. A sample project budget is shown below for reference. Figure 4.2: Sample Project Budget After you have completed your balanced budget, prepare an executive summary justifying each item. As part of this summary, discuss how you used diverse cost estimation tools (rough order of estimates, budgetary estimates and definite estimates), and techniques like top-down estimates, bottom-up estimates, parametric modeling, and techniques for controlling costs. Conclude the summary with a definition and discussion of earned value management (EVM), cost estimate and performance management technique, and the main values evaluated or calculated as part of the performance management measuring process (planned value [PV], actual cost [AC] and earned value [EV]).

As part of this discussion, use the accompanying table to compute the earned value management (EVM) for the following scenario. You are a project manager for a mobile app design project. The design, coding, testing, and implementation process will have a cost of $50,000 per function, screens, or views, and a security module. The project is scheduled to last three months (12 weeks). After three weeks since the project start, $30,000 has been spent, and only 3 modules out of 10 have been completed and deployed.

Using the EVM formulas shown on the table below, calculate BAC, PV, EV, AC, CV, CPI, SPI. As you work with this exercise as part of Sprint 3 of your project, research and discuss techniques for budget and cost management, starting with the EVM technique, and present your recommendations to manage and balance your project budget. Figure 4.3: Example table

This assignment does not follow APA format expectations for citations and references. You must submit the budget table and the EVM calculations in a separate document or another tab in the budget spreadsheet. This will serve as Sprint 3 of your Signature Assignment—The Project Plan Proposal.

Length: 3-5 pages not including cover page and references. The main document must include the budget table and the EVM analysis, and if the budget was developed using a spreadsheet, the spreadsheet file must also be submitted along with the budget plan. References: At least two scholarly references.

Sample Paper For Above instruction

Effective project management requires meticulous budgeting and cost control to ensure project success within constrained financial resources. Developing a comprehensive project budget entails estimating costs for each task or deliverable, justifying these estimates, and employing various tools and techniques to monitor and control expenditures throughout the project lifecycle. This paper presents a detailed project budget for a hypothetical mobile application development project, coupled with an analysis of earned value management (EVM) techniques to oversee project performance and ensure financial discipline.

Project Budget Development

The baseline project budget is constructed based on the scope of work, resource requirements, and organizational constraints. The project involves designing, coding, testing, and deploying ten modules, each costing $50,000, with an additional security module included. The total estimated cost, assuming linear costs per module, amounts to $550,000 ($50,000 x 11 modules). This estimate incorporates direct costs such as labor, software tools, testing resources, and contingency reserves for unforeseen expenses.

Each component of the budget is justified using historical data, industry benchmarks, and expert judgment. For example, module development costs are estimated based on previous similar projects and adjusted for current resource rates. The security module is allocated a similar cost due to comparable complexity. Cost estimates account for potential scope changes, inflation, and resource availability, ensuring a realistic and balanced budget aligned with organizational financial constraints.

Cost Estimation Tools and Techniques

The project budget integrates diverse cost estimation methods. Rough order of estimates provided initial budget ranges based on historical data. Budgetary estimates refined these figures by consulting with stakeholders and analyzing current market conditions. Finally, definite estimates were derived through detailed resource planning and vendor quotations. These layered approaches enabled accurate, credible budgeting.

Top-down estimates were used to allocate organizational budgets based on project importance and strategic priorities. Bottom-up estimating detailed individual task costs, aggregating to a comprehensive budget. Parametric modeling employed formulas relating cost to size or complexity, such as cost per module, enhancing estimation accuracy and consistency. Cost control techniques include regular variance analysis, forecasting, and adjusting project scope or resources to stay within the approved budget.

Earned Value Management (EVM) Explanation

Earned Value Management (EVM) is a systematic project performance measurement technique integrating scope, schedule, and cost. It provides quantifiable metrics for assessing project health and predicting future performance. The key EVM variables include Planned Value (PV), Actual Cost (AC), and Earned Value (EV). PV represents the budgeted cost of work scheduled; EV reflects the budgeted cost of work actually completed; AC indicates the actual expenses incurred.

For the mobile app project, after three weeks, the planned progress (PV) is 25% of the total budget, assuming uniform distribution over 12 weeks. Given the total budget of $550,000, PV for three weeks amounts to approximately $137,500. The actual cost (AC) reported is $30,000. The actual work completed involves three modules, which equates to 30% of scheduled work (3 out of 10 modules), but the budgeted cost for these is $150,000 (10 modules x $15,000, if evenly distributed). The earned value (EV) for the completed modules is therefore $165,000 (30% of total scope x total budget).

Key performance metrics derived from EVM include Cost Variance (CV) = EV - AC, Schedule Performance Index (SPI) = EV / PV, and Cost Performance Index (CPI) = EV / AC. These indicators reveal whether the project is ahead or behind schedule and whether it is over or under budget.

Techniques for Managing and Balancing Project Budget

To manage the project budget effectively, techniques such as contingency planning, variance analysis, and regular progress reviews are essential. Implementing Earned Value Management allows early detection of cost and schedule deviations, enabling timely corrective actions. Forecasting future costs through trend analysis helps project managers anticipate potential overruns and adjust scope or resources proactively. Employing a disciplined change control process ensures that scope changes are evaluated for their impact on the budget.

Advanced methods such as parametric modeling improve estimate accuracy, and value engineering can reduce costs without compromising quality. Continuous stakeholder communication and transparent reporting foster accountability and facilitated informed decision-making. These practices, combined with EVM-based monitoring, support balanced project performance within predefined financial limits.

Conclusion

In conclusion, developing a realistic project budget combined with rigorous performance measurement techniques such as EVM is critical for project success. The integration of diverse estimation methods, ongoing cost control, and performance analysis ensures that project managers can effectively monitor financial health and take corrective actions when necessary. As demonstrated in the mobile application project scenario, applying systematic budget management techniques fosters cost efficiency, promotes stakeholder confidence, and ultimately contributes to the successful delivery of project objectives.

References

• Publication manual of the American Psychological Association (7th ed.). APA Publishing.
• Earned value project management (4th ed.). Project Management Institute.
• Project management: A systems approach to planning, scheduling, and controlling (12th ed.). Wiley.
• Information technology project management. Wiley.
• Information technology project management (8th ed.). Cengage Learning.
• A guide to the project management body of knowledge (PMBOK® Guide) (6th ed.). PMI.
• Practice Standard for Earned Value Management (2nd ed.). PMI.
• Journal of Project Management, 36(2), 125-137.
• International Journal of Business and Management, 14(4), 89-104.
• International Journal of Managing Projects in Business, 11(3), 678-693.