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PROJ592 Final Exam 3

PROJ592 Final Exam 3

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Author: Christine Farr
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1. (TCO B) Estimating Procedures

(a) You are the project manager for a new high rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton.
What is the expected price of the material? Round to two decimal places.

(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons, and as much as 56 tons might be required.
What is the expected amount of the material needed for the project? 

(c) Using the estimates from (a) & (b), what is the expected cost for the material over the life of the project using the COMPLEX method?
(Points : 30)
2. (TCO B) Contingency Allowance: 

You are a project manager for the development of Motorola's new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones:
ITEM
COST
ESTIMATE
TYPE OF ESTIMATE
Case
$20.00
Order of Magnitude
Handset
$12.00
Definitive
Labor
$2.00
Definitive
Speaker
$2.50
Budget
Mouthpiece
$5.50
Budget
Antenna
$1.70
Definitive
Keypad
$3.00
Order of Magnitude
Circuit boards (handset)
$6.50
Budget
Circuit boards (base unit)
$8.50
Definitive
Battery
$1.20
Order of Magnitude
Charger
$16.00
Order of Magnitude
Total cost
$78.90
NA
The estimating department currently defines estimate accuracy as follows:
Order of Magnitude
-25%, +85%
Budget
-10%, +25%
Definitive
-5%, +10%


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