Control processes essay

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Control processes essay

Cost Control Processes Introduction The main aim of the report is to elaborate the cost control process for a construction project. To this end, it will explore the operating cycle, budgets, earned value measurement system and strategies that will be adopted to address a possible cost overrun dilemma.

To Control processes essay this, all the personnel incurring costs in the organization will be involved in the cost control process as opposed to merely involving the personnel in Control processes essay project office. Operating Cycle The construction project is expected to span over a three month period during which all the project deliverables will be met.

The estimate is a static document that reflects the quantity of inputs that will be required for the project and their prices before the commencement of the project bid time.

Control processes essay

This budget reflects the actual scope of the project at the site and the actual quantities of inputs that will be used for the construction project and a standard productivity rate.

Unlike the estimate, the project budget is not static because it includes extra work orders and change orders that will result in a significant alteration of quantities and costs. The project budget will therefore reflect the actual quantities utilized and a standard unit rate for each work activity.

Earned Value Measurement System The earned value measurement system will mainly constitute the earned work hour, which can be defined as the budgeted work hours earned for the quantity placed using the budgeted standard. This will be calculated by finding the product of the quantities placed and the budgeted standard work hours per unit rate whr per unit as illustrated below The budgeted quantities will be computed by an individual within the organization with the capacity to determine the quantities for each work item from the construction blueprints.

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This is because these quantities will reflect the actual project being built. It is also imperative that the budgeted quantity takeoffs for each work item are tabulated elaborately so that the quantity can easily be identified. The quantity tabulation form will particularly identify the takeoff by revision numbers, drawing number, equipment item numbers, area numbers, system numbers and evaluation.

These quantity tabulation sheets are used by field officers to keep track of the work completed. Cost Control Reports Three cost control reports will be utilized during the execution of the project, the labor cost report, the earned work hour report and the aforementioned project cost summary report AICCCC, These reports will mainly be used to compare the budgeted costs and actual expenditures by the cost code assigned to each of the resources that will be needed for the project as outlined in the work breakdown structure.

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Earned Work Hour Report This report will be used by the project manager to monitor the productivity of the individual work activities. It will particularly be used to compare the rate of the budgeted work hours per unit to the rate of the actual work hours per unit either daily or weekly for each activity.

The standard unit rate may or may not be incorporated in the estimate. However, for the sake of productivity, it will be imperative that all the superintendents are compared to the same rate. In order to determine the standard unit rate, the base year, daily output for each activity and standard crew size will have to be established.

Even though the budgeted standard will remain fixed throughout the project, it might be adjusted for each job due to the location, working conditions and trade agreements.

The Earned Work Hour Report will mainly be used to facilitate the comparison between the budgeted work hours and actual work hours expended and the projection of the final work hours for the individual activities. The contents of this report are highlighted below: Unique code assigned to each activity Activity Description: Short description of the resources that will be required for each activity Quantities: The quantities of the resources including: Obtained from the estimate ledger Weekly Quantities: Cumulative quantities placed during the week.

Obtained from the Inplace Quantity Report To date quantities: Cumulative quantities placed throughout the scope of the project. The number of hours spent to execute each activity including: Cumulative hours expended per week. Obtained from the Weekly Labour Distribution To date hours: Cumulative hours expended throughout the scope of the project.

Product of the quantities that have been placed to date and the budgeted work hour unit rate. Predetermined estimate of the work hours required to perform a particular activity. Obtained from the estimate Ledger. Ratio of the budgeted work hours and the budgeted quantities expressed in work hours per unit.

Weekly Unit Work Hour Rate: Ratio of the hours expended weekly and the weekly quantities placed. Ratio of the hours expended to date and the weekly quantities placed.

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Control processes essay

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Controlling Processes | Essay Example