Part 4: Project Cost Management

Tony Prince and his team are working on the Recreation and Wellness Intranet Project. They have been asked to refine the existing cost estimate for the project so they can evaluate supplier bids and have a solid cost baseline for evaluating project performance. Recall that your schedule and cost goals are to complete the project in six months for under $200,000.

Tasks

1. Prepare and print a one-page cost model for this project using spreadsheet software. Use the following WBS, and be sure to document your assumptions in preparing the cost model. Assume a labor rate of $100/hour for the project manager and $60/hour for other project team members. Assume that none of the work is outsourced, labor costs for users are not included, and there are no additional hardware costs. The total estimate should be $200,000.

1. Project management
2. Requirements definition
3. Web site design

1. Registration for recreational programs
2. Registration for classes and programs
3. Tracking system
4. Incentive system

4. Web site development

1. Registration for recreational programs
2. Registration for classes and programs
3. Tracking system
4. Incentive system

5. Testing
6. Training, rollout, and support

2. Using the cost model you created in Task 1, prepare a cost baseline by allocating the costs by WBS for each month of the project.
3. Assume that you have completed three months of the project. The BAC was $200,000 for this six-month project. You can also make the following assumptions:

PV = $120,000

EV = $100,000

AC = $90,000

1. What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project?
2. How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget?

Use this template for task 1.

Task 1: Recreation and Wellness Project Cost Estimate

Use this template for task2

# Units/Hrs. Cost/Unit/Hr. Subtotals WBS Level 1 Totals % of Total WBS Items 1. Project Management Project manager* Project team members 2. Requirements Definition 3. Web Site Design 3.1 Registration for recreational programs 32 Registration for classes and programs 3.3 Tracking system 3.4 Incentive system 4. Web Site Development 4.1 Registration for recreational programs 42 Registration for classes and programs 4.3 Tracking system 4.4 Incentive system 5. Testing 6. Training. Roll Out, and Support Total project cost estimate 6 Total S $ Recreation and Wellness Project Cost Baseline Month 1 2 3 WBS Items 1. Project Management Project manager* Project team members 2. Requirements Definition 3.Web Site Design 3.1 Registration for recreational programs 3.2 Registration for classes and programs 3.3 Tracking system 3.4 Incentive system 4. Web Site Development 4.1 Registration for recreational programs 4.2 Registration for classes and programs 4.3 Tracking system 4.4 Incentive system 5. Testing 6. Training, Roll Out, and Support Total project cost estimate $0 $0 $0 $0 $ $ $ $ $ $ $ $ $ $ $0 $ $0