Method of cost estimation
A key component of a successful project is the precise estimation of the costs that are involved. We as a team have decided to break down the steps for estimating the costs tangled with this project.
Step 1: laying down on paper all the resources that are needed and the approximate costs that are related to these resources
Step 2: adding additional budget to the resources just in case more capital needs to be pumped into acquiring them
Step 3: managing the currency in which we will need to pay to acquire these resources, be it local or foreign.
Step 4: the accrual amount that is existing and the amount that needs to be paid upfront in the form of full payment or deposit
Step 5: managing the loan that is required to fund this project and the interests that we will be paying on this loan.
An approach that we have decided to use is that production function cost method. The amount of work that can be done with the least amount of input that’s needed would help derive a more efficient cost. Output= in terms of completion, and input= in terms of labour and capital. A production function relates the amount or volume of output to the various inputs of labour, material and equipment. For a specified level of output, we may attempt to find a set of values for the input factors so as to minimize the production cost.
The table below summarizes each of payments made to the external contributors, giving us an overview of what the cost is.
Hiring of Hyatt Regency hotel ballroom i.e. Catering (food & drinks)
Signing of contract
Dj, equipment and lighting, Emcee
Putting a deposit
Cameraman and Video man
Checking of their photos and video quality
Looking at their previous decorations at past events
The budget breakdown is done using bottom-up...