Exam 8: Cost Estimation and Budgeting

Juan Valdez trades in his old donkeys for two new llamas in order to transport his mountain grown coffee to the marketplace.Llamas make excellent pack animals and are surefooted,so I should be able to spend more time harvesting and less time wrangling animals,Juan thought to himself as he led the two back to his mountain farm.Much to his dismay,the first time he tried to strap the bags of coffee beans to his new llamas they resisted by running away and when he got close,they spit copiously.However,he was persistent and methodical,and he noticed that things went a little better each day.The time it took to get the llamas loaded up is summarized in the table. What learning rate is evident from the data? How long will it take to load up the llamas next month (on the 30th attempt)if the same learning pattern continues?

The project management research in brief titled "Delusion and Deception Taking Place in Large Infrastructure Projects," describes three reasons that cost overruns occur in large infrastructure project work.Briefly describe these three reasons

The new dock would require 24 piers to support it and it was known that each time a pier is sunk into the harbor it would take 300 man hours of labor at $25 per hour.An activity-based costing of the entire pier system results in a total cost of how much?

Which of these estimates should be the most accurate?

The charge that is most likely a fixed cost is for:

The 1974 model Eldorado is a three-ton behemoth with a 500-cubic-inch engine that is long on style but short on gas mileage.During its five-year development process no one could possibly have anticipated that gas prices would go through the roof in 1973,making it far more expensive to operate and subsequently less attractive to a gas-price-conscious public.Design engineers scrambled to change the car in the last few months leading up to its debut,adding a slimmed down version with a smaller engine.All of the design overtime meant that the project budget took a big hit though,thanks to:

It began as a simple macro that would extract grades and post them on a web site,but once the web programmer began the work,he became obsessed with various charting features,grade summaries,and reports that could be added to make this the grandest web site in the tri-county area.As 2 hours of programming work grew to 20 and then 80,he knew that the client wouldn't be happy with the cost overrun.The only comment he mumbled as he finished his work was:

________ costs might be those associated with charges applied once at the beginning or end of a project.

Unplanned costs incurred when steps are taken to speed up a project's completion are called:

The new pipe and cable fence would require 70 posts be planted in the rock-hard clay along the property line.It was known that each time a post is planted it would take 3 man hours of labor at $12 per hour in the blazing sun.An activity-based costing of the entire pier system results in a total cost of how much?

Normal conditions,by definition,occur the vast majority of the time in project management.

The order of magnitude cost estimate is used when:

A key for developing project cost estimates is to:

There was no way that the study tour to Italy could cost only $1500 for 14 days and 13 nights and include all transportation,meals and hotels,but the smarmy professor knew that students would balk at a higher advertised price.Once they were thousands of miles away from home in a country where none of them spoke the language it would be easier to tell them about unanticipated charges and approach the more realistic price of $3500 per person.This type of:

A normal cost is incurred when:

What are parametric cost estimates and how are they developed?

Effective comparative estimates rely most heavily on:

An expedited cost is one that does not vary with respect to their usage.

What are function points and how do they work?

Cost estimates can be too low if issues outside a firm's control affect the project organization's ability to complete the project.These ________ might include inflation or political instability.