Q.

4 Enumerate the differences between an estimate and budget, Also describe the likely pitfalls which can impede the pricing function.

The Difference between an Estimate and a Budget

The definitions below show the subtle difference between an estimate and a budget.

Estimate - To produce a statement of the approximate cost of (Merriam-Webster Online, http://www.mw.com/dictionary/estimate) Budget - A plan expressed in quantitative, usually monetary, terms that covers a specific period of time (Accounting Text & Cases, Anthony, Hawkins, and Merchant, Twelfth Edition, page 697)

An estimate is a statement of the expected revenue and expenses for a construction project. A budget is a plan of how the construction company is going to reach these expectations. At this point, you may be asking yourself "why not use the project managers estimate or bid as the budget for the project". In a perfect world, the bid or estimate prepared by the project manager could be used as the budget for the project. However, we dont live in a perfect world and in many cases the estimate does not accurately reflect the actual financial performance of the project. This is why it is imperative that you create a budget for all of the projects your company is awarded. Your firms owners, project managers, and financial managers must sit down and objectively estimate what the costs are going to be for the project before the project starts.
Estimating Pitfalls Several pitfalls can impede the pricing function. Probably the most serious pitfall, and the one that is usually beyond the control of the project manager, is the buy-in decision, which is based on assumption that there will be bail-out changes or follow-up contracts later. These changed and/or contracts may be for spare parts, maintenance, maintenance manuals, equipment surveillances, optional equipment, optional services, and scrap factors. Other type of estimating pitfalls include: http://books.google.co.in/books? id=B1u9e0Dgx80C&pg=PA568&lpg=PA568&dq=Also+describe+the+likely+pitfalls+which+can+impe de+the+pricing+function.&source=bl&ots=OpV4rBxsv0&sig=snDley2KUZntkwE5drUqXP_4EDo&hl=en &ei=jnYITIUJomV4gbo28SoAQ&sa=X&oi=book_result&ct=result&resnum=2&ved=0CAoQ6AEwAQ#v=onepage& q&f=false Write from book

Define the Planning in a project? Describe various steps in planning.

Planning Activities
The planning activities that you, with the help of your team members, will need to do for the project are listed below:

To recruit and build the team To organize the project To identify and confirm the start and end dates through a project schedule To create the project budget To identify clearly the customer requirements for the final outcome To define the project scope boundaries - what it included and not included in the project To write a description of the final outcome To decide who will do what To assign accountability

Planning
Planning is a process that is frequently done, but rarely done well. This tool provides guidance regarding the key steps in the planning process.

Selection of short- and long-term objectives and the drawing up of tactical and strategic plans to achieve those objectives. In planning, managers outline the steps to be taken in moving the organization toward its objectives. After deciding on a set of strategies to be followed, the organization needs more specific plans, such as locations, methods of financing, hours of operations, and so on. As these plans are made, they will he communicated throughout the organization. When implemented, the plans will serve to coordinate, or meld together, the efforts of all parts of the organization toward

the company's objectives. Step Step Step Step Step Step Step Step 1: 2: 3: 4: 5: 6: 7: 8: How How How How How How How How to to to to to to to to prepare to plan - analyse stakeholder involvement analyse situations and needs prioritise and select a goal and purpose develop clear objectives identify alternative strategies and select the most effective strategy plan implementation plan for evaluation summarise your plan

Other steps for reference

Note: The planning process should be participatory and consultative, bringing together stakeholders to mobilise social and political support, to create a better understanding of issues, to agree on priorities and to seek local solutions that are built around broadbased consensus.

Step One Analyse the current situation Step Two Assess current responses Step Three Describe the future scenario Step Four Set a goal and objectives Step Five Defi ne strategies and activities
Step Six Select priorities, defi ne target groups and

sequence activities Step Seven Allocate roles and responsibilities

Step Eight Set targets and indicators of progress and

Success Step Nine Find the resources Step Ten Put it all together

http://www.1000ventures.com/business_guide/crosscuttings/project_planning_main.html

Explain how Programme Evaluation and Review Techniques (PERTP is used in project management, support tour answer with suitable diagram. The Program (or Project) Evaluation and Review Technique, commonly abbreviated PERT, is a model for project management designed to analyze and represent the tasks involved in completing a given project. It is commonly used in conjunction with the critical path method or CPM.

PERT is a method to analyze the involved tasks in completing a given project, especially the time needed to complete each task, and identifying the minimum time needed to complete the total project. PERT was developed primarily to simplify the planning and scheduling of large and complex projects. It was developed by Bill Pocock[citation needed] of Booz Allen Hamilton and Gordon Perhson[citation needed] of the U.S. Navy Special Projects Office in 1957 to support the U.S. Navy's Polaris nuclear submarine project. It was able to incorporate uncertainty by making it possible to schedule a project while not knowing precisely the details and durations of all the activities. It is more of an event-oriented technique rather than start- and completion-oriented, and is used more in projects where time, rather than cost, is the major factor. It is applied to very large-scale, one-time, complex, nonroutine infrastructure and Research and Development projects. This project model was the first of its kind, a revival for scientific management, founded by Frederick Taylor (Taylorism) and later refined by Henry Ford (Fordism). DuPont corporation's critical path method was invented at roughly the same time as PERT.

A PERT chart is a tool that facilitates decision making; The first draft of a PERT chart will number its events sequentially in 10s (10, 20, 30, etc.) to allow the later insertion of additional events. Two consecutive events in a PERT chart are linked by activities, which are conventionally represented as arrows (see the diagram above). The events are presented in a logical sequence and no activity can commence until its immediately preceding event is completed. The planner decides which milestones should be PERT events and also decides their proper sequence. A PERT chart may have multiple pages with many sub-tasks.

PERT is valuable to manage where multiple tasks are going simultaneously to reduce the redundancy

Terminology
PERT event: a point that marks the start or completion of one or more activities. It consumes no time, and uses no resources. When it marks the completion of one or more tasks, it is not reached (does not occur) until all of the activities leading to that event have been completed. predecessor event: an event that immediately precedes some other event without any other events intervening. An event can have multiple predecessor events and can be the predecessor of multiple events. successor event: an event that immediately follows some other event without any other intervening events. An event can have multiple successor events and can be the successor of multiple events.

PERT activity: the actual performance of a task which consumes time and requires resources (such as labour, materials, space, machinery). It can be understood as representing the time, effort, and resources required to move from one event to another. A PERT activity cannot be performed until the predecessor event has occurred. Optimistic time (O): the minimum possible time required to accomplish a task, assuming everything proceeds better than is normally expected Pessimistic time (P): the maximum possible time required to accomplish a task, assuming everything goes wrong (but excluding major catastrophes). Most likely time (M): the best estimate of the time required to accomplish a task, assuming everything proceeds as normal. Expected time (TE): the best estimate of the time required to accomplish a task, assuming everything proceeds as normal (the implication being that the expected time is the average time the task would require if the task were repeated on a number of occasions over an extended period of time). TE = (O + 4M + P) 6 Float or Slack is the amount of time that a task in a project network can be delayed without causing a delay - Subsequent tasks (free float) or Project Completion (total float) Critical Path: the longest possible continuous pathway taken from the initial event to the terminal event. It determines the total calendar time required for the project; and, therefore, any time delays along the critical path will delay the reaching of the terminal event by at least the same amount. Critical Activity: An activity that has total float equal to zero. Activity with zero float does not mean it is on the critical path. Lead time: the time by which a predecessor event must be completed in order to allow sufficient time for the activities that must elapse before a specific PERT event reaches completion. Lag time: the earliest time by which a successor event can follow a specific PERT event. Slack: the slack of an event is a measure of the excess time and resources available in achieving this event. Positive slack would indicate ahead of schedule; negative slack would indicate behind schedule; and zero slack would indicate on schedule. Fast tracking: performing more critical activities in parallel Crashing critical path: Shortening duration of critical activities

[edit] Implementation
The first step to scheduling the project is to determine the tasks that the project requires and the order in which they must be completed. The order may be easy to record for some tasks (e.g. When building a house, the land must be graded before the foundation can be laid) while difficult for others (There are two areas that need to be graded, but there are only enough bulldozers to do one). Additionally, the time estimates usually reflect the normal, non-rushed time. Many times, the time required to execute the task can be reduced for an additional cost or a reduction in the quality. In the following example there are seven tasks, labeled A through G. Some tasks can be done concurrently (A and B) while others cannot be done until their predecessor task is complete (C cannot begin until A is complete). Additionally, each task has three time estimates: the optimistic time estimate (O), the most likely or normal time estimate (M), and the pessimistic time estimate (P). The expected time (TE) is computed using the formula (O + 4M + P) 6.

Time estimates Activi Predeces Expected Opt. Normal Pess. ty sor time (O) (M) (P) A B C D E F G A A B, C D E 2 3 4 4 4 3 3 4 5 5 6 5 4 5 6 9 7 10 7 8 8 4.00 5.33 5.17 6.33 5.17 4.50 5.17

Once this step is complete, one can draw a Gantt chart or a network diagram.

A Gantt chart created using Microsoft Project (MSP). Note (1) the critical path is in red, (2) the slack is the black lines connected to non-critical activities, (3) since Saturday and Sunday are not work days and are thus excluded from the schedule, some bars on the Gantt chart are longer if they cut through a weekend. A Gantt chart created using OmniPlan. Note (1) the critical path is highlighted, (2) the slack is not specifically indicated on task 5 (d), though it can be observed on tasks 3 and 7 (b and f), (3) since weekends are indicated by a thin vertical line, and take up no additional space on the work calendar, bars on the Gantt chart are not longer or shorter when they do or don't carry over a weekend.

Q.6 What do you understand by Implementation? Explain various actions carried out in a project in this stage.

The goal of the implementation phase is to implement a system correctly, efficiently, and quickly on a particular set or range of computers, using particular tools and programming languages. The implementation stage is primarily environmental and works with the realities of particular machines, system, language compilers, tools, developers, and clients necessary to translate a design into working code. Just as the design phase may include some analysis efforts approached from a computational standpoint, the implementation phase essentially always includes design efforts. Implementation level design is a reconciliation activity, where in principle executable models, implementation languages and tools, performance requirements, and delivery schedules must finally be combined. All while maintaining correctness, reliability, extensibility, maintainability and related criteria.