Personnel

FIGURE 14-10. The pricing review procedure.

FIGURE 14-10. The pricing review procedure.

The base case, with the perturbation analysis costs, is then reviewed with upper-level management in order to formulate a company position for the program and to take a hard look at the allocation of resources required for the program. The company position may be to cut costs, authorize work, or submit a bid. Corporate approval may be required if the company's chief executive officer has a ceiling on the amount he can authorize.

If labor costs must be cut, the program manager must negotiate with the functional managers as to the size and method for the cost reductions. Otherwise, this step would simply entail authorization for the functional managers to begin the activities.

Figure 14-10 represents the system approach to determining total program costs. This procedure normally creates a synergistic environment, provides open channels of communication between all levels of management, and ensures agreement among all individuals as to program costs.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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