Discussion Question #1: What is the function of a project budget? Why is it important to include management contingency in a project budget and how you would calculate the amount of contingency needed? What is the function of a project budget? When undertaking a project, a budget must be set to assure spending is under control. “…the act of budgeting is the allocation of scarce resources to the various endeavors of an organization” (Meredith & Mantel, 2006, p.326). The budget is a control mechanism. Why is it important to include management contingency in a project budget and how you would calculate the amount of contingency needed?

 

Project Management Paper

A project can be a wide variety of activities. According to Kerzner, 2006, a project can be considered to be any series of activities and tasks that have a specific objective to be completed within certain specifications, has defined start and end dates, has funding limits (if applicable), consume human and nonhuman resources (i.e., money, people, equipment), and are multifunctional (i.e., cut across several functional lines) (p. 2). Remodeling a home, restructuring an organization, opening an additional business location, purchasing new equipment, etc are all considered projects. Each of these projects will have an objective, defined start and ending dates, funding limits, consume resources, and are multifunctional.