UPES – The Nation Builders University

Session 6

7th February 2019

Centre for
Continuing Education
UPES – The Nation Builders University

• BUDGETING AND COST ESTIMATION

(Budget allocation and budget curve)

Centre for
Continuing Education
UPES – The Nation Builders University
Creating Baseline Cost Curve
Project X

A B C D

Activity Time Predecessors

A 5 - A
B 2 - C
B
C 4 B
D 6 B D

Centre for
Continuing Education
UPES – The Nation Builders University
0 1 2 3 4 5 6 7 8 9 10
Cost
A 100
B 70
C 200
D 150

Activity Budgeted cost 1 2 3 4 5 6 7 8

A 100 30 20 20 20 10

B 70 20 50

C 200 70 30 40 60

D 150 40 20 30 30 20 10

Period Total 50 70 130 70 80 90 20 10

Cumulative 50 120 250 320 400 490 510 520

Centre for
Continuing Education
UPES – The Nation Builders University

1 2 3 4 5 6 7 8

Centre for
Continuing Education
UPES – The Nation Builders University
Mr. and Mrs. Tolstoy are building a house on a hill. It is a wooden house with a
slanted tiled roof. The size of the house is 3000 sq. feet, and will cost Rs. 1000
per sq. foot (including the plot and the construction).
The activities in building the house, the precedence, the durations and the
percentage of total cost are given below.

ACTIVITY DESCRIPTION PRECEDENCE DURATION %AGE OF TOTAL

ID (WEEKS) COST

A Excavation and framing - 4 24

B Roof and Fireplace A 3 8
C Wiring roughed in A 1 3
D Plumbing roughed in B,C 2 6
E Siding on D 2 5
F Windows, insulation, walks, plaster and E 8 17
garage

G Furnace B 1 9
H Plumbing fixtures installed D 2 4
J Exterior paint, light fixtures, hardware F,G,H 6 10
installed

K Floors laid and finished H 4 6

L Carpet and trim installed K 1 4
M Interior decoration J,L 2 4

Centre for
Continuing Education
UPES – The Nation Builders University
G1
B3
J6 M2
A4

F8
C1 E2
L1
D2
H2
K4

Activities
A
B
C
D
E
F
G
H
J
K
L
M

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Time (weeks)
Centre for
Continuing Education
UPES – The Nation Builders University

Activities

A 1.80 1.80 1.80 1.80

B 0.80 0.80 0.80

C 0.90

D 0.90 0.90

E 0.75 0.75

F 0.64 0.64 0.64 0.64 0.64 0.64 0.64 0.64

G 2.70

H 0.60 0.60

J 0.50 0.50 0.50 0.50 0.50 0.50

K 0.45 0.45 0.45 0.45

L 1.20

M 0.60 0.60

Week Cost 1.80 1.80 1.80 1.80 1.70 0.80 0.80 3.60 0.90 1.35 1.35 1.09 1.09 1.09 1.09 1.84 0.64 0.64 0.64 0.50 0.50 0.50 0.50 0.50 0.50 0.60 0.60

Cum. Cost 1.80 3.60 5.40 7.20 8.90 9.70 10.50 14.10 15.00 16.35 17.70 18.79 19.88 20.97 22.06 23.90 24.54 25.18 25.82 26.32 26.82 27.32 27.82 28.32 28.82 29.42 30.02

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Time (weeks)

Centre for
Continuing Education
UPES – The Nation Builders University
35

30

25

20

15

10

0
1 3 5 7 9 11 13 15 17 19 21 23 25 27

Centre for
Continuing Education
UPES – The Nation Builders University

ACTIVITY DESCRIPTION IMMEDIATE DURATION TOTAL COST RS. ‘000

PREDECESSORS (WEEKS)
H Basic design - 10 100
I Hardware design for A H 8 64
J Hardware design for B H 6 96
K Drawings for B I 4 16
L Software specifications I 2 36
M Parts purchase for B I 4 84
N Parts purchase for A J 4 80
O Drawings for A J 5 50
P Installation drawings I,J 5 60
Q Software purchases L 5 80
R Delivery of parts for B M 5 0
S Delivery of parts for A N 3 0
T Software delivery Q 3 0
U Assembly of A O,S 1 14
V Assembly of B K,R 5 80
W Test A U 2 24
X Test B V 3 36
Y Final Installation P,W,X 8 104
Z Final system test Y,T 6 66

Centre for
Continuing Education
UPES – The Nation Builders University

Q5
L2
T3
M4
R5
I8 K4 V5 X3
H 10
P5 Y8
Z6
J6
N4
W2
S3

O5
U1

Centre for
Continuing Education
UPES – The Nation Builders University

PREDECESS
DURATION
IMMEDIAT
ACTIVITY

(WEEKS)
ORS
DESCRIPTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47
E

H Basic design - 10
I Hardware design for A H 8
J Hardware design for B H 6
K Drawings for B J 4
L specifications J 2
M Parts purchase for B J 4
N Parts purchase for A I 4
O Drawings for A I 5
P Installation drawings I,J 5
Q Software purchases L 5
R Delivery of parts for B M 5
S Delivery of parts for A N 3
T Software delivery Q 3
U Assembly of A O,S 1
V Assembly of B K,R 5
W Test A U 2
X Test B V 3
Y Final Installation P,W,X 8
Z Final system test Y,T 6

Centre for
Continuing Education
UPES – The Nation Builders University

PREDECESSO

TOTAL COST

COST/WEEK
IMMEDIATE

DURATION
ACTIVITY

(WEEKS)

RS. ‘000
RS
DESCRIPTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

H Basic design - 10 100 10 10 10 10 10 10 10 10 10 10 10

I Hardware design for A H 8 64 8 8 8 8 8 8 8 8 8

J Hardware design for B H 6 96 16 16 16 16 16 16 16

K Drawings for B J 4 16 4 4 4 4 4
Software
L J 2 36 18 18 18
specifications
M Parts purchase for B J 4 84 21 21 21 21 21
N Parts purchase for A I 4 80 20 20 20 20 20
O Drawings for A I 5 50 10 10 10 10 10 10
P Installation drawings I,J 5 60 12 12 12 12 12 12
Q Software purchases L 5 80 16 16 16 16 16 16

R Delivery of parts for B M 5 0 0 0 0 0 0 0

S Delivery of parts for A N 3 0 0 0 0 0

T Software delivery Q 3 0 0 0 0 0
U Assembly of A O,S 1 14 14 14
V Assembly of B K,R 5 80 16 16 16 16 16 16
W Test A U 2 24 12 12 12
X Test B V 3 36 12 12 12 12
Y Final Installation P,W,X 8 104 13 13 13 13 13 13 13 13 13
Z Final system test Y,T 6 66 11 11 11 11 11 11 11
990 10 10 10 10 10 10 10 10 10 10 24 24 24 24 24 24 51 51 83 83 58 58 38 0 0 30 28 28 16 16 12 12 12 13 13 13 13 13 13 13 13 11 11 11 11 11 11
100
124
148
172
196
220
244
295
346
429
512
570
628
666
666
666
696
724
752
768
784
796
808
820
833
846
859
872
885
898
911
924
935
946
957
968
979
990
10
20
30
40
50
60
70
80
90

Cumulative Cost
0

Centre for
Continuing Education
UPES – The Nation Builders University

1200

1000

800

600

400

200

0
1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031323334353637383940414243444546

Centre for
Continuing Education
UPES – The Nation Builders University

Activity Predecessor Time Cost

A - 3 2100
B - 5 2000
C A 1 600
D B 9 3600
E A,B 12 1200
F C,D 15 9000
G D 2 1200
H G 5 4000

Centre for
Continuing Education