PROJECT MANAGEMENT ZIMBABWE
(PMZ)
PMZ-POST GRADUATE DIPLOMA IN PROJECT
MANAGEMENT
COURSEWORK COVER PAGE
MODULE:..............................................................CODE:............................
STUDENT NAME:................................................ NUMBER.........................
ASSIGNMENT/PRACTICAL/TEST №...................
QUESTION:..........................................................................................................
................................................................................................................................
................................................................................................................................
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SUBMISSION DATE:.........................MARKS AWARDED:..................%
LECTURER
NAME:.............................................................SIGN:...................DATE:..../..../
Lecturer’s
comments........................................................................................................
1 ai) Principles to be followed when estimating costs for this project are
1 Risk and Uncertainty-Costs should be determined for uncertainties within an estimate.
The total cost of constructing the feed run could be affected if there is a natural disaster
during construction.
2 Team of Experts - A skilled, interdisciplinary team should produce estimates. In this case
a person with knowledge in poultry production management will be needed in estimating the
amount of chicken feed needed for the chicken
3 Integrity-This principle allows avoiding false precision and rash decisions by integrating
all people involved in the process into a team which works as a single mechanism and uses
the same sources of information. This entails that in order for successful estimation there is
need to incorporate the whole team from builders to the poultry manager.
4 Basis of a Cost Estimate-Estimates should be developed using the best information
available. The estimates for chicken feed needed per day should be based on past projects.
5 Validation-The expert and unbiased team should validate cost predictions. In this case
there will be need for independent judgement from animal vets different poultry producers.
ii) Factor that will affect quality of estimates
1Economic State-Inflation can affect the cost of the labour for running the chickens
2) Project duration-As the duration of the project increases some of the chicks may die
hence the affecting the estimates and also as they grow amount of feed needed changes
3) People-Staff turnover and whether people have worked on projects together in the past
also influences accurate estimating
4) Padding estimates
5) Time of the year-Poultry production is also affected by seasons as during the winter
season more medicines could be needed.
b) i) Project cash flows
For 1 cycle
Costs
Column1
Expenses
Chicks
Operating Costs
Column2
$/Unit
Column3
Quantity
1
5000
Column4
$
5000
Chicken feed
Chicken Medicine
Labour Costs
Transport Costs
Utilities
Total Cost
30
2500
5
100
150
42
6
42
6
1.5
1260
15000
210
600
225
22295
Break even Total Cost =Total Revenue
Therefore at assuming a breakeven of 5000 chickens
Cost of a chicken = $ 22295/5000
= $4.459
Assuming a markup of 25%
Selling Price = 1.25 x 4.459
= $ 5.57 per chicken
For 1 cycle total revenue = 5000 x 5,57
= $ 27850
For 1 cycle Net Profit = 27850-22295
= $ 5555
For 5 cycles Net Profit = $ 27775
ii) Initial outflow in cycle 1 includes the cost of setting up the chicken run which is
Cycle
Outflow
Inflow
r
Netflow
NPV
1
26795
27850
0.05
1055
US$1,004.00
2
22295
27850
0.05
5555
US$5,038.00
3
22295
27850
0.05
5555
US$4,798.00
4
22295
27850
0.05
5555
US$4,570.00
5
NPV
22295
27850
0.05
5555
US$4,352.00
US$19,762.00