Cost Management Plan
PROJECT COST AND FINANCE MANAGEMENT
ASSIGNMENT # 2
Submitted to:
“SIR MUHAMMAD SHOAIB”
Submitted by:
MAHAM MANGRIO (01-298172-045)
SYED ABDUL HANNAN SHERAZI (01-298172-118)
Program & Section:
“MS (PM) 1-C
Dated: 26th October, 2017
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Cost Management Plan
COST MANAGEMENT PLAN
CHAMBER OF HORROR
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Cost Management Plan
TABLE OF CONTENTS
INTRODUCTION .......................................................................................... 4
ROLES AND RESPONSIBILITY ..................................................................... 4
UNIT OF MEASURE ..................................................................................... 5
LEVEL OF PRECISON ................................................................................... 6
LEVEL OF ACCURACY ................... Ошибка! Закладка не определена.
ORGANIZATIONAK PROCEDURE LINKS ...................................................... 6
CONTROL THRESHOLD ............................................................................... 8
RULES OF PERFORMANCE MEASUREMENT................................................. 8
REPORTING FORMAT .................................................................................. 8
PROCESS DESCRIPTION .............................................................................. 8
ADDITIONAL DETAILS ........................................................................ 9
APPROVAL…………………………………………………………..10
ANNEXURE…………………………………………………………..11
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Cost Management Plan
1. INTRODUCTION
i.
PURPOSE
The purpose of designing this Cost Management Plan is to clearly describe the
methodology for monitoring and controlling the cost of this project i.e. Chamber of
Horrors during the project lifecycle. It includes the system and baseline for measurement
of the project costs, their reporting, and controlling mechanism so that the successful
completion of the project within the allotted budget can be ensured. For successful
completion of this project within a given time and budget all the key project members
and stakeholders must adhere to and work within this Cost Management Plan and the
overall project plan it supports.
ii.
The cost management plan of Chamber of horrors will describe following components in
detail:a. Unit of Measure
b. Level of Precision
c. Level of Accuracy
d. Organizational Procedure Linkage
e. Control Threshold
f. Rules of Performance Measurement
g. Reporting formats
h. Process Description
i. Additional Details
2. ROLES AND RESPONSIBILITIES
The project manager will work with the project sponsor to define roles and expectations for
resources involved in managing the overall project cost. These roles should define ownership
for review, approval of all project activities, approval of project expenses and day to day cost
management. The Project manager will be entirely responsible for coordinating with the sponsor
so that there shall be smooth process and it will also help in completing project on time and
within specific budget.
The project manager will be responsible for assigning the task to the team and for that he must
have good communication skills and he will also be responsible to monitor the execution of all
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Cost Management Plan
the activities. The project manger will be responsible for managing and reporting of project cost
throughout the project duration. A meeting will be arranged monthly on the status of the project
and project manager will be responsible to give updates on the project cost management of the
preceding month. The following table will illustrate the roles & responsibilities more clearly:ROLE
RESPONSIBILITY
REPORTING
Project Manager
Manages the overall project
Sponsor & Stakeholder
Project Team
To accomplish tasks assigned Project Manager
by project manger
Sponsor
Provides funding for project
Stakeholder
Provides Feedback
3. UNIT OF MEASURE


The area of the building is measured in acres.
Element
Unit
Area
1 Acre
1Acre
43560
The human resource cost is measured on the basis of man hours and days. It will be
based on man hours and days consumed by project manager, project team and other
support staff.
Element
Unit
Human Resource
Man hours
12 per day
Staff days
6 days

All monetary resources is managed in Pakistani Rupees (PKR).

The material of the projects will be measured accordingly:
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Cost Management Plan
Elements
Unit
Material
Paint
litre
Cement
bags
1 bag
20kg
Tiles
Sqft

All the decoration items are measured on Lump sum basis.

Machinery operating cost will be managed in terms of per electric unit.
4. LEVEL OF PRECISON

If any of the amounts contains decimal point less than 5 than it will be ignored, the value
before decimal points will be considered. For example 2.3 will be rounded off to 2.

If amount will have decimal value more than 5 it will be rounded off to the nearest net
value. For example 2.8 will be rounded off to 3.

The cost of each activity will be rounded off to the net whole figure in tens & thousand
places. For example 12356 will be rounded off to 12360.
5. LEVEL OF ACCURACY

The level of accuracy of this project is +/-10%.
6. ORGANIZATIONAL PROCEDURE LINKAGE
This part of the plan contains following points:-
i.
Annex A refers to the WBS of this project
ii.
Annex B refers to the WBS dictionary
iii.
Annex C refers to details of cost breakdown
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Cost Management Plan
7. CONTROL THRESHOLD

The maximum cost for chamber of horror is 30 million.

Acceptable threshold level set for this project is +/- 5%. If the cost exceeds this level
than the change in cost management plan will be requested.
8. RULES OF PERFORMANCE MEASUREMENT

Earned Value Management (EVM) technique will be used to control cost throughout
the project life cycle. Project Control Accounts Manager will be responsible for
tracking costs and reporting it to PFO and Project Manager. Project Finance Officer
will be responsible for finding out Cost performance indexes (CPI) and Schedule
performance indexes (SPI) on monthly basis to keep track of cost and expenditures.
Earned Value
Threshold
Metric
Frequency
of
Blue
Red
Reporting
CPI
+/- 15%
Weekly
0.8≤CPI≤1.2
CPI<0.8 or CPI>1.2
SPI
+/- 15%
Weekly
0.8≤SPI≤1.2
SPI<0.8 or SPI>1.2

Cost Performance Index (CPI) will be reported weekly and is the project’s EV/AC

Schedule Performance Index (SPI) will be reported weekly and is the project’s EV/P
9. REPORTING FORMATS
Document
Expenditure status
Frequency
Monthly
RESPONSIBLE
Submitted TO
Control accounts manager
Project manager &
report
Project finance
manager
Detail project report
Quarterly
Work package manger
Project Manager &
Sponsor

Apart from documentation to control the project cost and schedule performance, the
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Cost Management Plan
project manager will check the project on daily basis and for effective monitoring.
10. PROCESS DESCRIPTION
i.
Project Cost Tool
TASKS
TOOL
Budgeting Information
Cost Estimation
EVM analysis Graphs
For All these tasks MS Excel will be used as Cost tool
Budget Tracking
ii.
Cost Reporting
Reporting for cost management will be included in the monthly project status report. The
Monthly Project Status Report will include a section labelled, “Cost Management”. This section
will contain the Earned Value Metrics identified in the previous section. All cost variances
outside of the thresholds identified in this Cost Management Plan will be reported on including
any corrective actions which are planned. Change Requests which are triggered based upon
project cost overruns will be identified and tracked in this report.
Analysis of project performance may result in a change request to the cost baseline or other
components of the project management plan. Change requests may include preventive or
corrective actions, and are processed for review and disposition through the Perform Integrated
Change Control process.
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Cost Management Plan
iii.
Control Costs
Project cost control includes:









11.
Influencing the factors that create changes to the authorized cost baseline;
Ensuring that all change requests are acted on in a timely manner;
Managing the actual changes when and as they occur;
Ensuring that cost expenditures do not exceed the authorized funding by period, by WBS
component, by activity, and in total for the project;
Monitoring cost performance to isolate and understand variances from the approved cost
baseline;
Monitoring work performance against funds expended;
Preventing unapproved changes from being included in the reported cost or resource
usage;
Informing appropriate stakeholders of all approved changes and associated cost; and
Bringing expected cost overruns within acceptable limits.
ADDITIONAL INFORMATION
i.
CONTINGENCY PLAN
Following is the procedure for applying contingency to cover cost increases or schedule
slippages. Contingencies are under the sole control of the management of horror house. The
application of contingency will be transparent to customers and will occur when the project
manager makes a request to company management to apply it.
The steps to apply contingency are as follows:
1. Identify the reason for the cost increase or schedule slippage and the expected total
impact.
2. Present the contingency request to the management of Chamber of Horrors project
3. Upon approval, update the project plan, reducing the cost contingency available.
4.
If the request is not approved, follow company management’s directions for dealing with
the cost increase.
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Cost Management Plan
a)
Potential Causes of Increases in Costs and Efforts:
Following is the list for each cost category, of the factors that could lead to
increase in costs:
i.


Designing project activities may require more effort of developers than planned,
resulting in increased labor cost.
Unplanned, paid overtime may require completing the project activities on schedule.
ii.


Software Acquisition Costs:
Additional software is required by the project team to complete the project.
The cost of acquiring material is higher than planned.
iii.

Labor Costs:
Other Costs:
Additional functionality or module may be added.
12. APPROVALS
The signatures of the people below indicate an understanding in the purpose and content of this
document by those signing it. By signing this document you agree to this as the formal Cost
Management Plan for the Building Expansion Project.
Approver Name
Title
Ali Quresshi
Project Sponsor
Maham Mangrio
Project Manager
Hannan Sherazi
Project Manager
Signature
Date
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Cost Management Plan
Annex-A
Work Break Down Structure (WBS)
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Cost Management Plan
Annex -B
ACTIVITY LISTING
WORK
PACKAGE ID
1.1
WORK PACKAGE
Building
Outdoor Environment
1.2
2.1
2.2
3.1
3.2
4.1
Interior designing
Exterior Designing
Dummies
Actors
Mask
ACTIVITY
Selection of building (21780 sq/ft)
which must have two floor s and a
basement.


Artificial trees/bushes
Artificial Graveyard





Wall decoration
Placement of props
Design furniture
Design wall hangings
Maintain intensity of
lightening effect in each area




Outdoor graveyard
Design Horror park
Design horror parking area
Maintain intensity of effects in
external environment of house
The collection of dummies includes:
 Witches
 Dracula
 Horror dolls
 Mermaids
 Mummy
 Monkey
Proper training will be given to each
actor and after final test of they will be
selected.




Design Horror animated masks
Paints
Dough
Brushes
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Cost Management Plan

Clothes
4.2
Wigs
4.3
.
Music

Collection of Wigs of all shades and
style.


Collection of horror songs
Sequencing all the songs
according to the activities


Maintain intensity of fog
Arrange different qualities of
fog according to the
requirement of attractions

Arrangement of dim and bright
lights
Maintenance of lightning effect
5.1
Fog
5.2
Designer for designing clothes
will be appointed.
Clothes will be designed
according to the shows
requirement.
5.3
a. M
n
c
e
Lights

o
f
l
6.1
Props
The props that will be designed are :
 Skeleton
 Soldiers
 Bats
 Dentist chair
 Webs
 Pumpkins
 Tombstones
 Tags
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Cost Management Plan
6.2
Instruments
Crockery
6.3



Musical instruments
Hammers
Tool kits
Horror themed crockery will be
designed.
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Cost Management Plan
COST BREAKDOWN
WORK PACKAGE ID
1.1
Annex- C
WORK PACKAGE
Building
Outdoor Environment
Cost
3000000
300000
1.2
2.1
2.2
3.1
3.2
4.1
4.2
4.3
Interior designing
500000
Exterior Designing
500000
Dummies
10000
Actors
200000
Mask
100000
Clothes
500000
Wigs
10000
Music
5.1
Fog
50000
Lights
400000
Props
50000
5.2
5.3
6.1
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