Posted: October 17th, 2013
Cost and Scheduling Basic
Cost and Scheduling Basic
Since the project would take thirteen weeks, it means that Arnie and hit team would have worked for seven extra weeks. According to the contract, they have to pay $5,000 per week for the seven weeks. Consequently, he should request for a minimum of $35,000 as additional funding. The $5,000 is multiplied by the seven weeks to come up with this figure. This amount will be penalty payment for the extra time it takes the project to be complete. The total amount of money required to complete the project will be $25,000 + $35,000 = $60,000. The $25,000 is the total additional crash cost, and the $35,000 is the penalty for work extension. This means that it will cost Arnie more money to complete the project in thirteen weeks than it would have cost him were he to complete it in normal time. Even when the contract says that the customer wanted the project completed in less, Arnie knows that he needs to finish it, and this will cost his managers extra money.
There are several factors to consider before deciding whether to do an eight-week or a nine-week project. It is vital to consider physical factors involved in the project such as weather. If the weather is favorable, then the project would take shorter than expected, however, if the weather conditions are not suitable for construction then it will take longer periods to complete the project. The total cost of running a project should also be considered before deciding on whether to do an eight-week or nine-week project. Considering the contractual terms, it might take cost more to exceed the expected time. I would suggest going through the budget and ensuring that there is extra money to cover the penalty charges.
Avoiding extra costs might mean seeking external help. This will cost the company extra for their services. Exceeding the time indicated in the contract comes with its advantages and disadvantages. The only advantage is that the work will be done slowly and to perfection with the required details. However, the disadvantages are more than the advantages therefore; it is paramount that careful considerations are made before taking the necessary steps when working on a project. Project management requires accurate management of procured goods and services (Humphreys, 2005). The link between suppliers and the project manager determines the pace of the project. Timely delivery of procured goods and services is vital for the project to run smoothly. This means that project managers have to ensure that they are working with reliable suppliers.
Project owners are known to change their needs and instructions especially in the middle of the projects. Project managers should consider all possible changes that might be made by the project owners especially if it is a construction project. Changes made to ongoing projects will cost both the owner and the project managers and these extra changes will determine the speed of the project completion (Newitt, 2009). Location and community opposition should be considered before deciding on the amount of time it will take to complete the project. Some communities do not support storey buildings therefore project managers and owners would have to consider completing the work earlier than expected to avoid hostility. Many project managers make mistakes when planning. These mistakes are weighty when it comes to completion and quality of the projects. Planning mistakes also lengthen the time it takes to complete projects, and when they are made by the managers, it means penalty fines have to be paid to the project owner.
Humphreys, K. K. (2005). Project and cost engineers’ handbook. Morgantown, W. VA: AACE International. Print.
Newitt, J. S. (2009). Construction scheduling: Principles and practices. Upper Saddle River, N.J: Prentice Hall. Print.
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