Project Management Purchase and Renovation

Question: Discuss about the Project Management for Purchase and Renovation. Answer: Introduction The identification and implementation of the different activities in the project are essential for integrating the project components in a holistic manner. Effective management while ensuring the budget and schedule of the undertaken project is essential for achieving the success of the project. This particular project deals with the renovation of a deteriorating three bedroom house. This particular project aims at evaluating the pricing and cost estimation processes followed in the undertaken project. Identification of cost elements The entire project cost is dependent on the various deliverables conducted throughout the project. The deliverable for the purchase and renovation of a deteriorating three bedroom house is further sub-divided into specific work packages and tasks. Kerzner, (2013) defined the cost elements as the particular resources required to complete the task. The identified cost elements for this particular project are: Materials Labor Total Replace 4 main carrying beams in basement and 12 floor Joyce's 1000 1000 2000 Install new footings as required by building codes 1000 1000 2000 Frame propose master bedroom above kitchen and dining area 4000 4000 8000 Roof framing as needed, flashing and window sill metal cover or repair rotted exterior 2500 2500 5000 Electrical for new master bedroom and kitchen expansion and upgrading smoke, outlets, switches, and light fixtures 3000 4000 7000 Install new master bathroom 2500 2500 5000 Install new HVAC system 4000 4000 8000 Insulate walls drywall and plaster and paint 4000 4000 8000 Expand kitchen and siding to match 1000 1500 2500 Install new construction windows, renovation of kitchen, install appliances (range, oven, fridge line, dishwasher) 9000 3000 12000 Install 1 slider and 2 exterior doors 1500 1200 2700 Drywall and plaster living and dining room walls only and paint 1250 1600 2850 Build new two-car garage per plans 6500 5000 11500 Build new wrap around deck to rear of house and repair front steps per plans 2500 2500 5000 Significance of project estimation and project pricing While undertaking the project for the purchase and renovation of a deteriorating house, the most significant aim of the project manager is to deliver the project within allocated time and resources (Rosemann, Brocke, 2015). Accurate estimation of the project cost assists the project manager in developing a robust project plan along with the work breakdown structure and schedule that needed to be followed in the project. Since the project was developed with the cooperation of different contractors; it was essentials for the project manager to develop the pricing. The pricing of the project is essential for determining the effective and robust business decision by the project sponsor. The development of the project pricing assists the project stakeholders to have a clear idea of the charge required for different product and services outsourced by the project manager. In this particular project, the project pricing has allowed the chief financial in providing an accurate budgeting of the project. Furthermore, the through the help of the pricing and cost estimation, the project manager can hire the contractors and employees according to the need of the project and provided financial resources (Khodakarami, Abdi, 2014). Pricing process, labor distribution, pricing out work, and the low bidder dilemma Pricing Process: Devaux, (2015) defined pricing as one of the dynamic and complex process related to the project management. The application of the project pricing in the renovation project has assisted the project manager in balancing the different stakeholders associated with the project. In the renovation of the three bedroom house project, the pricing process helps the project manager in determining the work-breakdown structure required for the project. Due to the unique nature of the renovation project, the pricing of the project included the contract cost of the different stakeholders, overhead profit, material cost, and legal document bidding. Labor Distribution: For the distributing the labor cost in the project, the project manager distributed the man-hour according to the lowest pricing element in the work breakdown structure in the project (Aliverdi, Naeni, Salehipour, 2013). In addition to that, the man-hours are distributed for the renovation in the time-phased events in the renovation project. The labor rate is estimated based on predicted salary of the 12 months work in the project. Apart from that, in various short duration tasks like expanding carrier beams and installing sliders in kitchen and bathroom, the labor cost is estimated depending on the effort provided to complete the task. Pricing Out Work: For the pricing out process in the renovation project, the project manager has scheduled the activities and WBS according to the lowest pricing units and performance required in the different activities of renovation (Yet et al., 2015). In the later part, the cost estimation of the project was rolled up for meeting the actual requirement of the renovation project. In addition to that, the potential impact of the different facilities like the renovation of the bedrooms, kitchens and house are analyzed on the basis of the equipment, money, and people available in the project. In addition to that, all the allocations of the resources are managed and monitored properly while conducting each task in the renovation project. While handling the final cost of the project, the chief financial manager approves the cost allocated to the each activity and resources in the project. Low Bidder Dilemma: According to Mir, and Pinnington, (2014), the low every project manager has to overcome the low bidder's dilemma while selecting the contractor for the project. For this particular renovation project, the project manager had to contract for site preparation, fencing and parking in the deteriorating three bedroom house. For overcome the low-bidding dilemma, the project manager should avoid price as the selecting criteria for the project (Wilson, 2015). In addition to that, while outsourcing the contractors, the project manager should access the competence of the contractors while accepting the bidders. Furthermore during conducting the renovation project, the project manager needs to evaluate the effectiveness of the contractors. Direct and Indirect Impact of the Cost elements over the project Estimation of the cost elements in the renovation project is considered as one of the critical tasks that determine the success and completion of the project (Hwang, Ng, 2013). The accurate estimation of the cost elements in the renovation project has the potential to successfully implement the integrated task in the project. In addition to that, the cost elements provide an overview of the total budget required for completely renovating the three bedroom house. The incorrect estimation of the cost elements along with the budget has the potential to hinder the progress of the project. If any cost element has been estimated with high cost than required, the project will become over budget. On the other hand, the low estimation of the cost of the element will lead the project to under budget and renovate will not be properly done. Khataie, and Bulgak, (2013) showed that if any significant element has been missed from the cost element estimation, the project will fail to meet the scope of the renovation project. Conclusion In this particular project, it has been found that the estimation of the accurate cost elements in the renovation of the three bedroom house is the significant driving force for successfully developing and conducting the project. The schedule ad WBS structure of the project is dependent on the correct estimation of the cost element. Correctly addressing the pricing out work and low bidder dilemma in the renovation project assist the project manager in conducting the project within allocated time and resources. References Aliverdi, R., Naeni, L. M., Salehipour, A. (2013). Monitoring project duration and cost in a construction project by applying statistical quality control charts. International Journal of Project Management, 31(3), 411-423. Devaux, S. A. (2015). Total project control: a practitioner's guide to managing projects as investments. Total project control: a practitioner's guide to managing projects as investments. Hwang, B. G., Ng, W. J. (2013). Project management knowledge and skills for green construction: Overcoming challenges. International Journal of Project Management, 31(2), 272-284. Kerzner, H. R. (2013). Project management: a systems approach to planning, scheduling, and controlling. John Wiley Sons. Khataie, A. H., Bulgak, A. A. (2013). 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