Question

Question 3                   (Marks: 15) Q.3.1 Discuss any three items you would consider when determining the cost of the proposed project. In your answer state why each item is important to consider. (9) Q.3.2 Explain what a contract is and then identify a suitable contract type for Project A and Project B below: A You think that your project is well defined and carries little risk. B You think that your project involves risksQuestion 3                   (Marks: 15) Q.3.1 Discuss any three items you would consider when determining the cost of the proposed project. In your answer state why each item is important to consider. (9) Q.3.2 Explain what a contract is and then identify a suitable contract type for Project A and Project B below: A You think that your project is well defined and carries little risk. B You think that your project involves risksQuestion 3                   (Marks: 15) Q.3.1 Discuss any three items you would consider when determining the cost of the proposed project. In your answer state why each item is important to consider. (9) Q.3.2 Explain what a contract is and then identify a suitable contract type for Project A and Project B below: A You think that your project is well defined and carries little risk. B You think that your project involves risksQuestion 3                   (Marks: 15) Q.3.1 Discuss any three items you would consider when determining the cost of the proposed project. In your answer state why each item is important to consider. (9) Q.3.2 Explain what a contract is and then identify a suitable contract type for Project A and Project B below: A You think that your project is well defined and carries little risk. B You think that your project involves risks

Answer 1

Q.3.1 Discuss any three items you would consider when determining the cost of the proposed project. In your answer state why each item is important to consider.

1.Anticipated Cost: This includes all the costs such as labour cost, prject quipment cost, management and software required for management and development cost, travel cost, office supplies and equipments cost etc.Hence for any plan to be complete specific amounts of the total budget need to be assigned to different categories of costs.

2. Preparing for a budget altering: Usuall the bugest initially propsed is just an approximation of the total amout that'll be required hence some budget should be kept aside for unexpected alterations of the costs. Hence one should always be prepared to jeopardize the final project’s outcome.

3. Managing and monitoring budget: Many organizations pre-define their cost and obectives way before the project is started off. However it is impossible to carry things out this way. All costs and budgets need to be continously monitored and planned accordingly while the project is in progress in order to make sure they are in line with the initially planned budget.

Q.3.2 Explain what a contract is and then identify a suitable contract type for Project A and Project B below: A You think that your project is well defined and carries little risk. B You think that your project involves risks

A contract is an agreement executed between two or more parties that can include terms such as proposals and procurement statement of work, definition of roles and responsibilities of the parties involved and other payment related details.

For Project A one will require a Fixed Price Contract because here your project is well defined and carries little risk and hence to counter that the buyer is assured of a fixed price to be paid once the defined scope of work is completed by the seller.

For Project B one will require a Cost Reimbursable Contract because here the project is not well defined hence the buyer will be required to pay the actual cost incurred by the seller and an additional cost .