Time and cost estimates are important to project management for the following reasons:
- Estimates are key inputs to project planning and control.
- Estimates support good decisions.
- Estimates are used to determine project duration and cost.
- Estimates are used to develop time-phased budgets and establish the project baseline.
- Without estimates you have inaccuracies, which result in time and cost under/overruns.
Most project tasks are unique and require the project manager to estimate duration/cost for each and every task separately; however, projects may also have repetitive tasks completed by the human resources assigned to the project. To estimate the labor hours/cost for these tasks the project manager may use an estimating technique that relies on learning curve theory to estimate the time and/or cost for completing repetitive tasks.
In this assignment, you will:
Task #1. Define and thoroughly discuss the Learning Curve Theory and how it applies to project management.
Task #2. Explain how you would apply the principles of the Learning Curve Theory to a real project in which you are familiar (as a project manager, team member, or one that you have read about in current events).
Task #3. Complete the following exercise on learning curves (see Page 2 of this assignment).
Instructions for completing the assignment:
- Before you begin this assignment, review the grading rubric for this assignment to understand how your work will be graded.
- Search out scholarly resources related to the subject of this assignment; use the UMUC online library databases as a start. You may also use the PMI site as a resource.
- In MS Word, compose a paper of 300-400 words (approximately 1 page) that addresses Task #1 and Task #2.
- Insert your response to the Exercise on learning curves (Task #3) and include all supporting calculations.
- Format your assignment response in accordance with APA 6th edition, include a title page and References page, and save the file as PMAN634_IA5_yourlastname.
- Submit your assignment through the Assignment folder of the course no later than 11:59 p.m. on Sunday, Week 5.
EXERCISE: Using the concept of Learning Curves for Estimating consider the following scenario and respond to each question (all work should be shown in your Word document):
Suppose that you are the assigning costs to a major project to be undertaken this year by your firm, University Applications. One particular coding process involves many labor-hours, but highly redundant work. You anticipate a total of 200,000 labor-hours to complete the first iteration of the coding and a learning curve rate of 70%. You are attempting to estimate the cost of the twentieth iteration of this coding sequence.
Based on this information and a $60 per hour labor rate, what would you expect to budget as
A. The cost of the twentieth iteration?
B. The cost of the fortieth iteration?