Estimate the Cost of a Project - Essay Example

Estimate of Cost Project The present project comes with two major forms of cost. These are monetary cost and non-monetary cost. Examples if non monetary include time and energy. There is indeed no way that such costs can be overlooked as they go a long way to have indirect monetary repercussions. For instance the time spent on a particular activity in the project could be used in a direct money making venture. The same goes for the energy used in undertaking an activity in a particular venture.

Having said this, the non-monetary cost aspects of the project shall be quantified and included in the estimate of cost. For each itemized activity also, a very detailed consideration is made with regards to the duration that the project members had to take to complete the activity. It is for this reason that a decomposed version of the work breakdown structure would be used. It is also important to note that before the final values of costs were reached, a comprehensive cost management plan was put in place to ensure that the final values are the best market values available.

ACTIVITYESTIMATED DURATIONMONETARY VALUE (expressed in USD)NON-MONETARY VALUE (quantified time and energy expressed in terms of high, medium or low prorioty)ESTIMATED COST (MONETARY + NON-MONETARY)Feasibility study7 days7000High 7900Development of project charter2 days30Medium 35Conference on project charter2 days 300Low 320Project sponsor approval1 day20Medium 23Seeking and securing of sponsorship4 days 5000High 5500Preparation of scope statement2 days 200Medium 220Formation of project team1 day100Low 110Project team conference2 days 300Medium 330Team’s official planning5 days -High 30Official Plan submission1 day30Low 31Approval of plan1 day-Medium 30Project inauguration meeting1 day300High 330Project inauguration1 day500Low 520Verification of user requirements3 days 300High 390System Designing3 days 500High 590Procurement execution14 days 11,000High 11700Installation and Testing of Engines20 days 1,500High 2,300Project Management28 days 3,000High 3,300Quality Control28 days 2,000Medium 2,200Risk Management28 days 1,000Medium 1,100Update of Project delivery7 days 300Medium 330Project Auditing7 days 500High 580Evaluation of Project 4 days200Medium 220Archiving of files and documents5 days 200Low 210TOTAL34,28038299From the cost estimation, it can be seen that the present project is a high risk project in the sense that it involves a lot of cost.

To mitigate the possible scenario of higher cost, it is admonished that the procurement stage, which entails the highest cost should be deprived of sole sourcing. The company ought to open up a public procurement bidding process to ensure that the company gets very good value for the project. It is also admonished that as much as possible, the company should depend on internal labor instead of external labor. This will actually go a long way to ensure that non-monetary costs are cut down.REFERENCE LISTLuther T. A (2009). Economic Mastery in times of Global Crisis.

Multimedia Press Limited: ChicagoProject Management Documents (2012) Work Breakdown Structure (WBS) Template. Accessed April 11, 2012 from http://www.projectmanagementdocs.com/templates/work-breakdown-structure-wbs.htmlTomhill R. (2008). Innovation for new Economic Dispensation. Ultimate Press Limited: Cairo