Cost Overruns

Introduction How many times do you hear about stick out hails overrunning and exceeding their budgets? No doubt far also many compared with the number of times you can remember a project coming in well within budget. holding equals within the project budget and getting range for money and return on investment is even much important in these times of economic hardship and trade competitiveness but how many companies address this openly turbulently and proactively with well tried tools and methods. Putting your head in the backbone is not the answer! This paper explains the typical causes of project cost overruns and provides some insights on the use of various techniques and tips for managing and reducing costs. consort to Wikipedia Cost overrun is defined as excess of demonstrable cost over budget. Cost overrun is also sometimes called cost escalation, cost increase, or budget overrun. It is simply compute in one of two ways: either as a percentage, namely actual cost minus budgeted cost, as a percentage of budgeted cost, or as a ratio, to wit actual cost divided by budgeted cost. For example, if the budget for a project was £ light speed million and the actual cost was £cl million then the cost overrun may be expressed as 50 percent or by the ratio 1.5.

Background Cost overrun is reportedly very greens in infrastructure, building, and technology projects. One of the most comprehensive studies [1] of cost overrun that exists entitled Megaprojects and Risk by Bent Flyvbjerg in 2003, found that 9 out of 10 projects surveyed overran, and that overruns of 50 to 100 percent were common. For IT projects in particular, an industry study [2] by the Standish meeting in 2004 found that the average cost overrun was 43 percent, and that 71 percent of projects were over budget, over time, and under scoped. spectacular examples of cost overruns have been well documented. For example, the Sydney Opera House had a 1,400 percent overrun and the Concorde supersonic aeroplane... If you want to get a full essay, order it on our website: Orderessay

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