Cost Estimation Proposal

Question

The triple constraints for creating cost estimates include resources, time and money. What cost estimation approaches provide consistent triangulation of triple constraints for creating accurate estimates? Should different approaches be used for different types of projects?

For this Assignment, you will practice using WBS to create a cost estimate and model for building a new, state-of-the-art multimedia classroom for your organisation. The timeline for this project is six months.

To complete this Assignment:

Your cost estimate and model for building a new, state-of-the-art multimedia classroom should include:

• 20 high-end personal computers with appropriate software for your organisation
• A network server
• Internet access for all machines
• An instructor station
• A projection system

Include personnel costs associated with the project management for this project. Document the assumptions you made in preparing the estimate. Provide explanations for key numbers.

Answer

Cost Estimation Proposal

Figure 1.1. Work Breakdown Structure for a Multimedia Classroom Construction Project

Assumptions

The first assumption in this project is that the multimedia classrooms will be used by master students pursuing computer science, information technology and engineering courses at the university. The second assumption is that there will be no significant changes in the cost of various outlined equipment to be used in construction of the multimedia classroom during the entire period. Third, it is also assumed that the systems, materials, and various equipment will be as indicated in this cost estimation proposal. Lastly, it is assumed that all the current and new funding sources that may come along during building of the multimedia classroom will cover all the expenses and ensure all facilities are in place.

Cost estimations for personnel and materials required

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Project management

The entire project will take a period of 6 months. During this period, the team will ensure that 20-high end personal computers can facilitate learning in a multimedia classroom. The demands of this project are not high comparing the number of computers and facilities to be installed with the timeframe given. As such, a project manager and two other individuals will be able to complete the work in due time. The project managers will receive remuneration of $80 per hour. The project manager will work 4 hours a day for 5 days in a week, making a total of 80 hours a month. For the entire period, the project manager will work a total of 480 hours, the total cost coming to $38,400.

The staff members will also be responsible for training. They will each receive a remuneration of $50 per hour. They will work for a total of 160 hours per month, and 960 hours for the entire project. Hourly wage for the project manager and the team members was arrived at based on the mean hourly wages provided by Bureau of Labor Statistics 2015. Since the project is for a 6-month duration, it was agreed that the project manager and team members would receive an above market rate remuneration. According to the United States Department of Labor (2015), those individuals engaged in computer occupations earned a mean hourly wage of $41.43 in 2015.

Hardware components

The project requires 20 high-end personal computers. The brand chosen was Apple’s MacBook series. Specifically, Apple iMac 27” has been outlined as the best for this project. The specific features of the personal computers are: 3.2 GHz, 8 GB RAM, 1 TB hard drive, 4th generation, and Intel Core i5. These personal computers can be acquired at a cost of $1,999 each (“iMac,” 2016). The network server to be installed will be Apple Xserve. The price of this server is $2,999. Internet access for the entire 20 personal computers will cost $10,000. This will provide high speeds unlike other cheaper options in the market. Reliability and stability of internet connectivity were also considered in deciding on the local area network for internet access. This includes installation as well as the configuration charges for the computers, server and instructor station. The instructor station will be set up at a cost of $2,500. The projector system will cost $1,254. This cost is divided as follows: $804 is the cost of a Benq 1080p Full HD DLP projector and $450 will go to EluneVision Luna projection screen (106”).

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The following table shows the cost estimates for the entire project.

From the above cost estimation table, it is clear that labor costs make up a large proportion of the entire budgeted costs. Labor costs make up 70 percent of the entire budget costs, while hardware and other components comprise of 30 percent of the total project costs. Team members will take the largest share of the labor costs. The project manager will work half time as he/she will only be involved in supervision of the entire project. Among hardware and other components, high-end personal computers will take up the highest share of the budget. It is important to acquire high-end computers which will provide high speeds, storage capacity, and high display. The Apple iMac 27” will deliver all these. In addition, Apple personal computers are better since they offer more compatibility with various software and spreadsheet applications. The Apple iMac 27” also comes with pre-installed system with multiple software for use.

References

iMac. 2016. Buy all-new iMac with breakthrough improvements-Apple. Retrieved from: http://www.apple.com/ca/shop/buy-mac/imac

United States Department of Labor. (2015). May 2015 National Occupational Employment and Wages Estimates United States. Retrieved from: http://www.bls.gov/oes/current/oes_nat.htm#15-0000

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