Project Management

Question

1.    The following information is provided. You are required to estimate to execute the project which is turnkey project on the with 35% profitability.

·      The no. of working hours is 8

·      The amount of money that the client is willing to give for the project is Rs.1,00,000/-

·      The profit margin is 35%

·      Indicate the assumptions that you will make while executing the project at the margin of 35%

·      The duration of the project as specified by the client is 90 days

·      Also provide the number of resources which you will need for executing the project

Answer 1

To estimate the execution of your project with a 35% profit margin within a budget of Rs. 1,00,000, you first need to calculate the actual cost of the project excluding the profit. Since 35% of your budget is profit, the cost of execution would be the remaining 65%. Here's how you can calculate it:

1. Calculate Cost of Execution (Excluding Profit):
2. Total Budget = Rs. 1,00,000
3. Profit Margin = 35%
4. Cost of Execution = Total Budget / (1 + Profit Margin) = Rs. 1,00,000 / 1.35
5. This gives you the amount that can be spent on executing the project.
6. Determine Resources Needed:
7. Assume a daily cost per resource (like wages, materials, etc.).
8. Project Duration = 90 days, Working Hours/Day = 8 hours.
9. Estimate the total number of working hours (90 days * 8 hours).
10. Divide the total cost by the total working hours and the assumed cost per resource per hour to find the number of resources.

For example, if you assume Rs. 500 per hour per resource, you'll find that the project is quite tight in terms of resources. You might end up needing at least 1 full-time resource, depending on the specific tasks and their efficiency.

Remember, this is a basic estimate. The actual number of resources and the budget allocation will depend on the specific requirements of your project. It's important to consider the skills needed, the efficiency of the workforce, and any additional costs that might arise during the project.