Cost and Value Management Case Study Example | Topics and Well Written Essays - 2000 words

Cost and Value Management - Case Study Example This certainly shows the pragmatism of the firm with regards to its products in the sense that none of the products are rushed into production whatever the results these said products show on the testing phase. That is directly linked to the cost management practices of the firm i.e. the firm is willing to bear some short-term costs given that these cost can initiate the birth of products that are successful and long-lasting in the long run. In addition, the entire case of the Boeing 7X7 shows the commitment and drive of Boeing towards research and development. It says in the case study before the name was changed to 767, approximately $100 million had been spent on this project which were demarcated as costs for the on-going research and development. Therefore, we can see that the costs management practices of Boeing had a significant place in them for large scale research and development projects. Suffice to say, the cost management practices of Boeing are pragmatic yet expansive a nd directed towards the long run. [1] [2] [3] Now, after determining these facts, we will now look at the strengths and weaknesses of these practices of Boeing in light of the concept of earned value management. Before, I delve much deeper into this topic, it is critical to explain that contrary to popular belief, there is a world of difference between the factors that determine earned value and earned value management systems (EVMS). ... ts importance vis--vis the mechanism can be gauged by the fact that large adapt ably priced military defense contracts have required the presence of these prerequisites in order to ascertain the reliability of the results given by the earned value metric as far back as 1967. It is important to note that despite the great important of these prerequisites, they are not essential for the workability of the earned value method. However, the presence of a management control system that fulfills at least part of the standards that have been demarcated by the prerequisites is extremely essential in this case. From here on, the term "earned value management process" will include the pre-requisites for both the earned value and the EVMS criteria. [4] [5] [6] I will first look at the strengths of these practices at Boeing. The earned value approach of Boeing is directly in line with the cost management practices that we have seen in the case study. Despite the very large initial expenditure that is related to the product, the project only went into productions when commitments to purchase were received from one foreign and two domestic airlines, and preproduction orders totaled at least 100 planes. This showed the risk management abilities of the company in the sense that they wanted to ascertain to the minimum a certain number of prospective clients which would be interested in their products. This also showed the strengths of the earned value management process of the business as they want to determine a flexible budget of costs which they would need to undertake in order to complete a theoretical number of orders. Now, this theoretical number would be based on the pre-posed number of prospective clients who had guaranteed their intere st to purchase. Therefore, the entire

Decision in Paradise Essay Example | Topics and Well Written Essays - 1000 words

Decision in Paradise - Essay Example The company was establishing itself on an island located in south Pacific. My post at this very prestigious company is the senior business executive. I am the personal assistant to the company manager who is Alex. Chris, my other friend is the proprietor and the owner of Marvel Construction. My core responsibility as an executive is to unearth the problems at Kava and eradicate them so that the company can attain its goal and fulfill its mission on this most difficult island. However on my arrival at Kava, I realized that my dream did not exist. It was shattered. It was after all not the paradise I had thought it was. Kava is an incapacitated island country situated in the South Pacific. This island is experiencing very hard times and someone should rescue it soon. The island quickly needs reconstruction in many areas. Kava Island is aged 15 years and below. It is a culturally diverse island with a combination of people with 50% coming from indigenous tribes, French, Americans, Africans, and Spanish. The people of Kava are basically of indigenous belief. As a matter of, 50% of the people have an indigenous faith while the rest is a mixture of English, French and Spanish. The main economic activity is farming of spices, cocoa bananas and coffee. They also are involved in extraction of petroleum. Marvel Construction Company is one of the largest construction companies with an international reputation. The company has over 20 branches across the US. Since its establishment 20 years ago in Nevada, Marvel construction company has expansively grown through the setting up of new premises and expansion of the existing ones. Marvel is focused on creating loyalty and value with its clients through the provision of outstanding services, fine products and technology advancement. The mission of Marvel Construction Company to the people of Kava is to bring forth prosperity, and establish a