We said that a project is defined as a temporary endeavor that consumes resources, incurs cost and produce deliverables over a finite period of time to achieve a specific goal. They come in all shapes and sizes and can vary in length or complexity.
Operation type activities are similar to project activities in that they too produce deliverables, consume resources and incur cost. However they are on-going or repetitive in nature, hence they are not project activities or tasks. Some examples of operation activities are weekly maintenance of databases, paying invoices or help desk operations activities.
Programs are much larger than projects. They are made up of many projects and on going activities such as operation type activities and are similar to projects as they consume resources, incur cost and produce deliverables. However programs are more complex and include repetitive operation type activities such as maintenance work, facility administration etc, and are funded typically on a…
One way to report on cost control and forecasting during project execution is to use the Variance Analysis method, that is, explaining the difference (or variance) between actual costs and the budgeted costs with numbers and make new estimates for completing the work. Please consult this link Earned Value Management for related literature and references.
For the purpose of making these calculations, I will use an hypothetical project example (but it could also be a task or phase).
"A company has contracted a service provider to deliver a project in 10 working days (80 hours) for the estimated cost of $10,000 and a work effort of 200 hours. The contract is Time and Material, this means that the company pays the provider for the number of hours actually required to perform the service. So, the provider has no incentive to minimize the number of hours expended on the service. The less efficient the provider is, the more money it makes!" Summary of Time and Material Contract (re…
A simple way for estimating tasks is to use the PERT (Program Evaluation review technique) weighted average method. This method uses a weighted average duration estimate to calculate task duration, it gives the opportunity to take into account information based on different types of estimates values (such as poorly defined areas, probabilistics, and ranges for the schedule). This method is based on the Beta distribution model because it can model events which are constrained to take place within an interval defined by a minimum and maximum value. (For this reason, the Beta distribution is used extensively in PERT, CPM and other project planning/control systems to describe the time to completion of a task).
The term weighted average means that the equation uses weighted factors to calculate the expected task duration. The equation and process modelling a task for PERT is the following:
E= Expected Value
O= Optimistic Value (this is equivalent to a minimum val…