Question 1

Your team has been asked to test and document enhancements to a web application
that allows buyers to purchase custom-printed canvas shoes. The tasks and
dependencies are as follows:
 Create a testing plan
Once the testing plan is ready, your team can:
 Test the user interfaces
 Test the database
 Test the network
 Write the documentation first draft
When the user interface tests are complete, you can:
 Perform user testing—enlist some users to test the user interface
When the database and network testing are complete, you can:
 Perform integration testing—network with the database
When the user testing of the user interface and the database testing are complete, you
can:
 Perform integration testing—database, network, and user interface
When all integration testing and user testing are complete, you can:
 Perform system testing
Then you can:
 Review and revise documentation
After all other tasks are complete, you can:
 Obtain management approval
Duration estimates for the tasks:
a. 3 days

b
10 days
.

c. 6 days

d
7 days
.

e. 20 days

f. 5 days

g
3 days
.

h 2 days

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 .

i. 8 days

j. 4 days

k. 5 days
1. Create a network diagram and a Gantt chart for the project tasks. Ask your instructor if
you are permitted to use software such as Microsoft Project to help you prepare your diagrams.
Letter Task Name Duration
A Create a testing plan 3
B Test the user interfaces 10 Once the testing plan is ready
C Test the database 6 Once the testing plan is ready
D Test the network 8 Once the testing plan is ready
E Write the documentation first draf 20 Once the testing plan is ready
F Perform user testing—enlist some 5 When the user interface tests are complete
users to test the user interface
G Perform integration testing—network 3 When the database and network testing are complete
with the database
H Perform integration testing— 2 When the user testing of the user interface and the
database, network, and user interface database testing are complete
I Perform system testing 8 When all integration testing and user testing are
complete
J Review and revise documentation 4 Then you can
k Obtain management approval 5 Afer all other tasks are complete

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 The blue represents the critical path, green represents activities that are not on the critical path,
and the peach represents float time.

1. What is the planned duration for the testing project

A (3) + B (10) + F (5) + H (2) + I (8) + J (4) + K (5) = 37 Days

2. What is the critical path for the testing project?

A-B-F-H-I-J-K
3. For each task NOT on the critical path, calculate the amount of slack available.

C (6) + D (4) + E (20) + G (3) = 33. It could also be looked at that there are different paths that
are not taken.
A (3) – C (6) – G (3) – H (2) – I (8) – J (4) – K (5) = 31
A (3) – D (8) – G (3) – H (2) – I (8) – J (4) – K (5) = 33
A (3) – E (20) – J (4) – K (5) = 32
4. If the user testing of the user interface takes 15 days, what will the impact be on
the project duration?
If the user testing of the user interface takes 15 days, the impact it would have on the duration of
the project would that it would push back the start dates for the rest of the steps in the project.
This would also increase the duration of the project to 47 days, since user testing would go from
5 days to 15 days (increase by 10 days).

Question 2
Wedding cost estimation: Given the following information, calculate the estimated costs for a
wedding with 250 guests and a bridal party of six, using the methods indicated. Show your work.
Note that members of the bridal party are already counted as guests, you don’t need to add them
twice.
1. Parametric estimate
According to Value Penguin, the average cost per person in the state is $206 per person but for
this exercise I choose a smaller amount. So at 250 guest plus bride and groom the cost would be
252 * 147 = $37,000

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 2. Bottom-up estimate
3.
Resources Sub- Cost
Categories
Day of Wedding Venue 9,000
Food & Drinks 2000
Church 800
Cake 700
Music 1000
Decorations 1500
Photographer 3000
10,00
Tips 0
Invitations 500
Bridal Party Gifts 1,000
Wedding Dress & 7,500
Suite
Total 37,00
0
For the venue I choose the Historical Calcasieu Marine National Bank, the price includes the
venue, set up on the day, and a nonrefundable deposit. I did not add include the damage deposit,
as it would be refunded 10 days after the event if no damage was done. The cost for the other
items were determined what the average cost would be for each resource

4. Analogous cost estimate

The Lodge and Club $25,250

Farmer's Table 22,000
The Don CeSar 43,500
Hilton Clearwater Beach Resort and Spa 32,750
Fort Lauderdale Marriott Pompano Beach 36,500
Resort and Spa

For the Analogous cost estimator, I looked at different all-inclusive destination weddings in
Florida. These packages can hold up to 250 people and include everything from the ceremony to
food and drink.

5. You will probably notice some differences in the estimated values. Are these differences
significant? What might cause the differences? If you were estimating a significant project in the
future, which method(s) would you use and why?
After looking at these different cost estimators I did not notice much of a price difference.
Overall all the wedding packages I looked at range from $22,000 to $44,000. I am assuming the
location prices are different because of the different locations that I originally looked at. If I was
estimating a significant project in the future I would us the bottom-up estimate because I think
you are able to see everything that goes into each cost. With the parametric estimate and the

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 analogous cost estimator you do not get an indebt look at what goes into each portion of the
project.

Wedding Cost Estimates

Item Dollars

Groom’s brother’s wedding, last year, 175 guests, similar venue

$20,300
and style

Catering $65 per person

Photographer $1,500

Rental of hall $500

Clothing, bride $2,000

Clothing, groom $750

Flowers $800

Other décor items $500

Cake $500

Gifts for bridal party $80 each

Wedding planner $2,000

Wedding planner’s estimate of typical cost for this kind of $10,000 plus $75 per
wedding guest

Question 3

1. Cost reimbursable contract calculation.

A contract calls for a total payment of $800,000 with a guarantee. Essentially the contractor is
guaranteed to make at least $200,000 above his costs. If the contractor can demonstrate his costs
exceed $600,000, the project will pay the difference, with a $50,000 ceiling on the overage. The
contractor demonstrates he spent $623,000. How much (gross) must the project remit to the
contractor?

The total that project must remit to the contractor is the sum of two things. First is the guaranteed
payment of $800,000. Second is the cost incurred by the contractor above $600,000 with a
constraint that a maximum of $ 50,000 will be paid. Now the contractor has demonstrated that
the cost incurred is $623,000 which is $23,000 above the limit of $600,000. As this difference is

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 still less than $ 50,000, the project will remit this to the contractor. Hence the gross which the
project has to remit to the contractor is $800,000 + $23,000 = $823,000

2. Another option for the same contract has the contractor guaranteed to be paid his costs plus
20%, for costs that exceed $600,000. With the same initial assumption—guarantee of $800,000
gross payment (no requirement to itemize costs), but if the contractor can show that costs exceed
$600,000, the project will pay $800,000 plus the costs that exceed $600,000, plus 20% of those
excess costs, with a ceiling of $900,000 gross. The contractor demonstrates he spent $623,000.
How much (gross) must the project remit to the contractor?

In this case the total that the project must be remit is a sum of three things. First is the guaranteed
payment of $800,000. Second is the cost incurred by the contractor over and above the limit of
$600,000 .Third is the 20% of the cost incurred by the contractor over and above the limit of
$600,000. If this total exceeds $900,000, then the project will only remit $900,000. Now the
contractor has demonstrated that the cost incurred is $623,000 which is $23,000 above the limit
of $600,000. 20% of the costs that exceed $600,000 is equal to 20% of $23,000 = $4,600. The
total of these three sums is $800,000 + $23,000 + $4600 = $827,600 = $827,000. As this total is
less than $900,000 project will remit $827,000 to the contractor

2. Under option 3.2, at what dollar amount of total costs would the contractor be assuming
all of the excess costs beyond that point?

The dollar amount of total costs beyond which the contractor would be assuming all the excess
cost is that point where the gross payout to contractor would be $ 900,000

If TC is the total cost of the contractor, the gross payout will be 800000+(TC-600000)+0.2*(TC-
600000)

Gross Payout = 800000+1.2*(TC-60000)

Gross Payout = 80000 + 1.2*TC

We need to find TC where Gross Payout would be 900000. Hence we get

900000=80000+1.2*TC

Hence TC = (900000-80000)/1.2 = 820000/1.2 = 683333.34

Hence when the total cost exceeds $683333.34 the contractor would be assuming all of the
excess costs beyond that point.
3. In which option did the project assume more of the risk of a cost overrun? Explain.

In first option the maximum the project has to pay over and above the guaranteed amount of
$800,000 is $50,000, however in second option, the project may have to pay a maximum of
$100,000 to the contractor above the guaranteed price. Consequently in first option, the risk
transfer of extra cost happens to contractor at a cost of $650,000 but in second option the risk

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 transfer to the contractor happens only at the cost of $ 683333.34. Hence the project has assumed
more risk of a cost overrun in second option.

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