PM&E Unit 4 Part 1 Long Answers

Que4.1. What’s design cost estimation? What are the rudiments of cost estimation in design operation? Answer 3 4. 5. Project Financing PART- 1 Project Cost Estimation and Working Capital Conditions. i Questions Answers Long Answer Type and Medium Answer Type Questions design Cost Estimation Cost estimation in design operation is the process of vaticinating the fiscal and other coffers demanded to complete a design within a defined compass. Cost estimation is the process that takes colorful factors into account. and calculates a budget that meets the fiscal commitment necessary for a successful design. Estimating cost is an important process in design operation as it’s the base for determining and controlling the design budget. Cost estimation accounts for each element needed for the design from accoutrements to labour and calculate a total quantum that determines a design’s budget Once the design is in stir, the cost estimate is used to manage all of its related costs in order to keep the design on budget. 6. Good cost estimation is essential for keeping a design under budget. numerous costs can appear over the life cycle of a design, and an accurate estimation system can be the difference between a successful plan and a failed one. The rudiments of cost estimation in design operation Labour The cost of platoon members working on the design, both in terms of stipend and time Accoutrements and outfit The cost of coffers needed for the design, from physical tools to software to legal permits. iii. installations The cost of using any working spaces not possessed by the association. iv. merchandisers The cost of hiring third- party merchandisers or contractors. Que4.2. Answer The significance of cost estimation in a design includes More accurate planning By directly prognosticating what tasks and coffers are needed to complete work, Estimator will be suitable to efficiently produce a work breakdown schedule, assign work to staff. and cleave to projected timelines. 1. 2 Advanced profit perimeters Accurate estimating accounts for anticipated and unanticipated costs and helps cover the profit perimeters. OURCES 3. bettered resource operation With lesser sapience into the tasks and timelines needed to complete work. One can manage the capital and coffers needed in the design in the effective way that helps the design to move forward efficiently at low cost. 4. 5. Better character and reprise business When systems are delivered on time and on budget, it’ll probably to produce happy guests, palm reprise business, and gain further referrals. Que4.3. Explain the process of developing cost estimation. 1. Answer The process of developing cost estimation includes Define Estimate’s Purpose Determine the purpose of the estimate, the position of detail which is needed, who receives the estimate and the overall compass of the estimate. 2 Stronger customer connections When guests understand the why behind a design’s cost, they’re more likely to trust your moxie and anticipate changes to the cost estimate as the design progresses, performing in better working connections. 3. Develop Estimating Plan Assemble a cost- estimating platoon, and outline their approach. Develop a timeline, and determine who’ll do the independent cost estimate. Eventually, produce the platoon’s schedule. Define Characteristics produce a birth description of the purpose, system and performance characteristics. This includes any technology counteraccusations , system configurations, schedules, strategies and relations to being systems. 4. Determine Estimating Approach Define a work breakdown structure( WBS), and choose an estimating system that’s stylish suited for each element in the WBS. Cross- check for cost and schedule motorists; also produce a roster. 1 design Backing Capital budgeting is also known as investment decision timber, capital expenditure opinions planning capital expenditure and analysis of capital expenditure 11. Capital budgeting ways are always used in all types of investment openings from the purchase of a new piece of ministry to whole 5. To expedite co- ordination of inter- departmental design finances among the contending capital systems. 6 To guarantee maximization of profit by allocating the available budget. Que4.11. Explain all the phases in the process of capital budgeting. L plant. objects of Capital Budgeting To insure the selection of the possible profitable capital systems. To guarantee the effective control of capital expenditure in order to achieve by vaticinating the long- term fiscal conditions. Answer 2 To make estimation of capital expenditure during the budget period and to see that the benefits and costs may be measured in terms of cash inflow. Determining the needed amount takes place as per authorization and warrants. 6. It helps in determining the company’s investment in the long term fixed means similar as investment in the addition or relief of the factory & ministry, new outfit, exploration & development, etc. Process of Capital Budgeting Capital Budgeting process is the process of planning which is used to estimate the implicit investments or expenditures whose quantum is significant. It’s the process of deciding whether or not to invest in a particular design as all the investment possibilities may not be satisfying. While capital budgeng several phases are involved in the process. These processes are given below in sequence. Phases of capital budgeting Planning The planning phase encompasses investment strategy and the generation and primary webbing of design proffers. The investment strategy offers the frame that shapes and guides the identification of individual design openings. Analysis If the primary webbing proposes that the design is worth investing, a detailed analysis of the marketing, specialized, fiscal, profitable, and ecological aspects is conducted. Que4.14. Explain different types of pitfalls and query in a design? Answer 3 2 Security pitfalls These pitfalls are veritably important that in the product developed is secure and doesn’t allow unauthorized access, unintentional/ purposeful variations, and is available when needed. Legal pitfalls These pitfalls are also about the contractual scores and handling or avoiding any suits against the company. The client contracts must be read and understood duly to avoid these types of pitfalls 4. 6. Project Financing 1. Different types of pitfalls in a design are functional pitfalls These types of pitfalls involve making the right processes and also technologies and handling the product, procurement, and distribution of the products or services,etc. 4 Strategic pitfalls The strategic pitfalls correspond of choosing the right design, opting the right people for the work, opting the right tools, and opting the right technology for the consummation of the products or the services in the design operation. Performance pitfalls These pitfalls are about the performance of the products as well as the design. The specifications maintained in the design insure that the product is as per the conditions and performs satisfactorily. request pitfalls These pitfalls are pertaining to the request prisoner, brand image of the association and the products, and how to hold on to the aged request and expand the request in the future. Different types of query in a design are Variation This refers to a range of possible values over which a certain variable characterizing the information can vary. 2 previsioned query This refers to all preliminarily linked misgivings which may or may not do during the course of a design. 3 unlooked-for query This refers to misgivings which aren’t identifiable during design planning. In this case, the design platoon is ignorant of the possibility of the circumstance of this uncertain event, and as similar there’s no indispensable plan of action. Chaos In this case, the design itself lacks stable descriptions of objects, hypotheticals, and pretensions. Que4.15. Explain the threat operation process.

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