Lesson 8 Flashcards
- describe what makes a project unique from other activities that occur within a company
Projects are unique from other processes within a company in that they have a limited time frame, are multi-disciplinary, have very specific objectives, and are often a one-time process. Projects also involve a level of uncertainty—costs and project outcomes are not
fully definable. More often than not, projects involve more than one department. For example, a project to implement an inventory management system will involve staff from technology, production, sales, procurement, and accounting. Projects have defined start and finish dates.
- classify various types of projects and project costs
Within an organization, projects can take many forms. For example - implemented to develop a new product, to implement a software application throughout a
company, or to build a new factory. Projects can be one-time ventures where a company has no precedent to help guide the project. For example, an ERP (enterprise resource planning) software implementation is usually a one-time project that encompasses all departments and employees. Similarly, building a new library for an elementary school is a one-time event.
In some companies, the day-to-day work can be almost solely related to projects. For example, companies involved in new product development (such as Apple Inc.) are constantly implementing new projects.
direct vs indirect costs
recurring vs non-recurring costs
fixed vs variable costs
normal vs expedited costs
- apply cost estimation techniques to projects.
ball park estimates - often used in a preliminary estimate
comparative estimates - based on assumption that historical data can be used as a frame of reference for current estimates on similar projects
feasibility estimates - based as a guideline on real numbers. Often expressed in terms of degree of accuracy of +-10%
definitive estimates - given only on completion of most design work
- outline the challenges associated with project costing.
- low initial estimates
- unexpected technical difficulties
- lack of definition
- specification changes
- external factors
