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Estimations job was not so accurate during planning.
High expectations that costs won't be that high.
Cost control management and risk management should have had more control.
Direct and indirect increase in prices.
more often than their clients would care to admit, consultants do not ... Consulting firms, on the other hand, are skilled at managing the expectations of their ... but by applying their own considered perspective as to the best approach for ... value-adding expertise in the project, while cost-effectively filling non-expert ...
also goods can get more expensive if for one reason or an other freight, unforeseen customs fee's have not been added to the cost of the product...
In one case I remember a project almost been changed from a manufacturing facility to a bottling station and purchasing the licensed product ... the solution to the problem was scrapping a3rd floor office in order to make up the amount for the missing pipes
oef, many factors...
First when you accepted to be the manager , you have seen all the costs and break downs, and you agree?
Goods are caught in contracts with all kind of escapes, tax escapes, import taxes, government taxes.
Think small , in small parts, also with goods
Following are some of the reasons for the project cost hike:
Price fluctuation
delay in starting the project
delay in finishing the project
bad budgeting
major or minor changes to the project while work in progress
sudden product demand
sub standard supervision or work force
Lack of :
Unfortunately, many new project managers receive little training in how to do the job. Anyone can learn to draw a Gantt chart, but effective project managers also rely on the savvy that comes from painful experience.
Most likely because the variables are not estimated for.
There has to a buffer always included in your estimation. This is for handling leaves, attrition and handover, defects and rework etc.
Project costs are divided in prior known costs (like licenses, fees,rents, ....) and estimated costs. The estimated costs are built out of human resources, materials and machines which are subject to many external factors such as suppliers, sub-contractors, politics, raw material prices.... These can vary causing delay (extra man-hours) and/or extra material costs which is difficult to be predicted.
Probably because not good enough planning
Usually good projects go over budget because of the cost of execution is much more expensive than making the study itself. And moreover, some accidents may surprise you , and the pyramid of making the project itself .
1. Inflation rate.
2. Zero based budgeting.
3. Lack of forecasting.
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