Cost Management

So Fresh sponsors has provided the initial funding of $175,000 to host a 3-day convention for its 200 employees in Orlando, Florida. During the first budget meeting a rough draft for the total cost of the event was completed. An additional $32,000 was estimated through sponsorships and exhibitors presale. Through subsequent budget review meetings it was determined that the best method to raise the additional funds would be by attracting local vendors to market and sell their product at the convention for a predetermined fee. Another method would be to bring in corporations through sponsorship opportunities. The idea is to pre-sell spaces at the convention to these vendors as an opportunity to showcase local artisans, entrepreneurs, farmers and manufactures, among others, while providing additional capital investment to host So Fresh convention successfully. The project team along with the So Fresh business team established that in the case of any remaining capital after the completion of the convention, shall be intended to support So fresh research and development and to fund next years convention. Due to the level of details in the Work Breakdown Structure (WBS) and the number of work packages for this project, the team decided to create the cost estimate using the Bottom up technique, where each SME was responsible to provide cost estimation for their own areas of expertise. This approach allowed the team to estimate an accurate costs throughout all the stages of the project. Although additional funding was close to being secure, however the project manager realized that some policies needed to be in place in order to minimize cost variance. The strategies used to control the cost creep are based on accurately reporting and regularly assessing the progress throughout all phases of the project. The project manager will keep a close track on spending trends, as

well as, anticipated unbudgeted costs, in which cases the impact to the project will be documented and designated SME will submit a change request to the stakeholders, who then have the decision of denying or approving the proposed change. It is critical for the success of the project to ensure that the organization understands the impact of approved changes and how they will impact the total variation from the BAC. The project manager and stakeholders agree that governance over the contingency and management reserves would be overseen by the project manager, who will then allocate the funds as needed on changes approved by the stakeholders.