GMS 450 Lecture Notes - Lecture 5: Manvi, Ds2, Observational Error
3 Nov 2016
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Senior cost more, but use less time. Junior cost less, but use more time. Project budgets amount: dependent on what resources are used, use to create project budgets and schedules. Level of accuracy dependent on information available and tools that are used: project budgets are different from operational budgets. Done by work packages, not accounting codes. Done for the project duration which often cross fiscal years. Projects can be capitalized or expensed: one of the budgeting challenges is to align with the organizations chart of accounts and accounting policies and procedures. Budgeting problems: project are unique activities, no history to aid estimators, projects may be multi-year with cost escalations. Changes in technology, materials, prices: organization tradition impacts project budgeting. How overhead and indirect costs are charged. Accounting idiosyncrasies: project managers see costs differently than accountants. Top-down budgeting: based on collective judgments and experiences of top and middle managers, overall project cost estimated by estimating the costs of major tasks, advantages.
