Post Graduation Adventure

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Chapter Chapter 5 5 Estimating Estimating Project Project Times Times and and CostsCosts 153153

Sharp Sharp Printing, Printing, AGAG
Three Three years years aago go the the Sharp Sharp Printing Printing (SP) (SP) strastrategic tegic management management grgroup oup set set a a goal goal ofof
hahaving ving a a color color laser laser printer printer aavailavailable ble ffor or the the consumer consumer and and small small business business markmarket et
ffor or less less than than $200. $200. A A few few months months lalater ter the the senior senior management management met met ofoff-site f-site to to
discuss discuss the the new new prproduct. oduct. The The results results ofof this this meeting meeting were were a a set set ofof general general technical technical
specificaspecifications tions along along with with major major deliveradeliverablesbles, , a a product product launch launch dadatete, , and and a a cost cost
estimate estimate based based on on prior prior eexperiencexperience..
Shortly Shortly afterwafterward, ard, a a meeting meeting was was arrarranged anged for for midmiddle dle management management explaining explaining

the the prproject oject goalsgoals, , major major responsibilitiesresponsibilities, , the the project project start start dadatete, , and and importance importance ofof
meeting meeting the the prproduct oduct launch launch date date within within the the cost cost estimaestimatete. . Members Members ofof all all depart-depart-
ments ments ininvolvvolved ed attended attended the the meeting. meeting. ExExcitement citement was was high. high. Although Although eveveryeryone one
sasaw w the the risks risks as as high, high, the the prpromised omised rewrewards ards ffor or the the compancompany y and and the the personnel personnel
werwere e emblazoned emblazoned in in their their mindsminds. . A A few few participants participants questioned questioned the the legitimacy legitimacy ofof
the the prproject oject duration duration and and cost cost esestimatimatestes. . A A couple couple ofof R&D R&D people people wwere ere wworried orried
aabout bout the the technology technology rrequired equired to to prproduce oduce the the high-quality high-quality product product ffor or less less than than
$200. $200. But But givgiven en the the excitement excitement ofof the the moment, moment, everyeveryone one agragreed eed the the project project wwas as
wworth orth doing doing and and doadoableble. . The The color color laser laser printer printer project project wwas as to to hahave ve the the highest highest
prproject oject priority priority in in the the compancompanyy..
Lauren Lauren wwas as selected selected to to be be the the project project manamanagerger. . She She had had 15 15 years years ofof experience experience in in
printer printer design design and and manmanufactureufacture, , which which included included successful successful manamanagement gement ofof sever severalal
prprojects ojects relarelated ted to to printers printers for for commercommercial cial markmarketsets. . Since Since she she was was one one ofof those those
uncomfortauncomfortable ble with with the the prproject oject cost cost and and time time estimatesestimates, , she she felt felt getting getting good good
bottom-up bottom-up time time and and cost cost estimaestimates tes ffor or the the deliveradeliverables bles was was her her first first concern. concern. She She
quickly quickly had had a a meeting meeting with with the the significant significant stakstakeholders eholders to to creacreate te a a WBS WBS identifyingidentifying
the the wwork ork packages packages and and ororganizational ganizational unit unit responsibresponsible le ffor or implementing implementing the the worworkk
packagespackages. . Lauren Lauren stressed stressed she she wwanted anted time time and and cost cost estimates estimates frfrom om those those who who wwouldould
do do the the wwork ork or or werwere e the the most most knowledgeaknowledgeableble, , ifif possible possible. . Getting Getting estimates estimates frfrom om
more more than than one one soursource ce was was encouraencouraged. ged. Estimates Estimates wwere ere due due in in two two wweekseeks..
The The compiled compiled estimates estimates wwere ere placed placed in in the the WBS/OBSWBS/OBS. . The The corresponding corresponding cost cost

estimaestimate te seemed seemed to to be be in in errorerror. . The The cost cost estimate estimate wwas as $1,250,000 $1,250,000 ovover er the the senior senior
management management estimaestimate; te; this this represents represents aabout bout a a 20 20 percent percent ooverrun! verrun! The The time time
estimaestimate te from from the the dedeveloped veloped prproject oject networnetwork k was was only only ffour our months months ovover er the the top top
management management time time estimaestimatete. . Another Another meeting meeting was was scheduled scheduled with with the the significant significant

CaseCase

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