Define and discusses top down and bottom down budgeting for project management, and also the different types of project networks. Includes APA formatted references.© BrainMass Inc. brainmass.com October 25, 2018, 10:11 am ad1c9bdddf
Project management involves expectations and outcomes. It is crucial that a project manager is able to establish a budget in order to meet the expectations of the client and generate the anticipated outcome. Budgets are defined as "cost estimates that have been approved by management and formally established for cost control" (Dinsmore & Cabanis-Brewin, 2011). Managing the budget during a project is key since resources are generally limited and must be optimized. There are two approaches of budgeting: top-down and bottom-up. These approaches use different methods and have different risks and opportunities.
Top-down budgeting is the most widely used approach in contemporary project management. In this form of budgeting, all directions come from the top, beginning with establishing project objectives by the top management. Top management is responsible for providing direction, guidelines, information and plan to project participants. The advantages of top-down budgeting include the ability of top management to handle all budget allocations completely. This ensures that the budget remains on track as specific accounting processes are followed. This is an effective method for ensuring the project has clear direction and is aligned with the organization's goals and resources. However, top-down budgeting can lead to ambiguity, resulting in a higher chance of project failure, unless there is open and clear ...
This solution discusses top down and bottom up budgeting and project networks for project management. Includes APA formatted references.
Project Management: PERT Network Diagram
The information presented in Table 1 represents the optimistic activity time (a), most probable activity time (m), and pessimistic activity time (b) in weeks for each activity associated with the project.
See attached file for table 1.
1. What is the expected activity time (t) in weeks for each activity? Enter this information in the appropriate data field provided for each activity in PERT Network Diagram 2 below for use later in this assignment.
PERT Network Diagram 2
2. What is the variance for the expected activity time for each activity? Enter this information in Table 2 below for use later in this assignment.
Check attached file for Table 2
3. What is the expected total activity time in weeks for each of the five separate paths through the network?
4. What is the critical path for the network and associated overall project completion time in weeks?
5. What is the project variance and standard deviation (i.e., the variance and standard deviation for the critical path)?
6. What is the probability of the critical path activities being completed in less than or equal to 20 weeks?
7. What is the Earliest Start, Earliest Finish, Latest Start and Latest Finish times for each activity? Record this information in Table 3 below for use later in this assignment.
See attached file for table 3.
8. What is the slack time in weeks for each activity? Record this information in Table 3 also.
The information presented in Table 4 represents the total budgeted cost for each activity associated with the project. See attached file for table 4
9. What is the difference in total project cashflow through week seven based upon using the Earliest Start Date for each activity and using the Latest Start Date for each activity?
Table 5 represents the percentage of completion and actual cost of work performed data for each activity associated with the project at a certain point in time during the project.
See attached file for table 5.
10. Which activity evidences the single largest activity difference (regardless of whether it is a cost overrun or cost underrun) at this particular point in time?
11. Does the overall activity difference for the project at this particular point in time represent a cost overrun or cost underrun for the project?
Table 6 represents the estimated crash time in weeks and associated total crash cost for each activity. See attached file for table 6.
12. If you crash the network in order to reduce the expected project duration to 20 weeks, while minimizing the overall crash cost, which activities on the critical path would be the most logical choices for crashing and why?
13. What is the minimum total crash cost associated with crashing the network to reduce the expected project duration to 20 weeks?
14. After successfully crashing the network to reduce the expected project duration to 20 weeks, which path through the crashed network would constitute the critical path?View Full Posting Details