Step #1: Review the attached PM University Case Study that has been updated to include additional cost information.

Step #2: Calculate cost estimates for each blank cell and indicate each the type of contingency in the attached Cost Estimate template.

Project Case Study - PM University Cycling Event Project Case Study - PM University Cycling Event Case Study Background PM University plans to host a 25-mile bike race through its campus and neighboring area to kick-off the fall semester and promote the school's focus on fitness. The university's Cycling Club President (Leonard) suggested the event to the university's Student Life Director (Penny) based on their membership in the College Bicycle Association (CBA). Project Information The CBA chooses the host university each year based on the quality of their business case justifying the project. Penny and Leonard submitted a business case in January to the CBA expressing PM University's interest in hosting the event. Howard, the CBA's Chairperson, informed PM University in late February that they had been selected to host this year's race. Penny knows that you are taking an MBA course in Project Management and asks you to be the Project Manager for this event. Although you are concerned that you may not have enough Project Management experience for such a visible project, you take comfort in the fact that the University has established a supportive PMO that provides consulting services for all Project Managers who request assistance. After accepting your unpaid assignment to accumulate some Project Management hours towards the PMP certification, Penny requests that you prepare a Project Charter for her review and approval by March 1". . . The CBA is a regional organization that selects and endorses a university to sponsor a race each year in the North-East region of the United States that attracts cyclists from other university Cycling Club's in states as far north as Maine, as far south as Virginia and as far west as Illinois. The hosting university for the bike race keeps all proceeds from the event but is responsible for all project expenses other than the race's promotional expenses. The CBA provides the hosting university with $15,000 that must be used to promote the race including prize money totaling $10,000. The hosting university provides a free lunch for all participating cyclists after the race. The hosting university also provides entertainment the night before the race to encourage overnight stays at local establishments as well as reduce the number of biker registrations on race day. In addition to the actual race and entertainment, the event also includes a Fitness Exposition with about 20 vendors that occurs the day before the Race. Each vendor normally pays $250 to rent a booth. The vendors are also expected to donate items and coupons for the gift bags that the hosting university provides to all the participants at registration. The event generally starts on Friday with the actual race on Saturday. This enables the actual race to be postponed until Sunday in the case of adverse weather conditions. Due to the CBA endorsement, this annual event usually draws numerous cyclists and spectators representing about 100 different universities. The entry fee for the race is $35 for each individual cyclist or $150 for a team of 5 cyclists. Based on historic stats, the CBA estimates 150 teams as well as 1,500 individual cyclists will enter the race each year. The CBA uses post-event surveys from all the participating universities to determine the success of the event. The hosting university can earn up to an additional $5.000 from the CBA based on their survey scores. The University's Student Life department has committed to provide the necessary funding to host the event with the expectation that the funds will be fully reimbursed from all of the event proceeds. As such, Penny has approved the establishment of an initial project budget up to $85,000 to fund all project expenses including the CBA subsidized promotional expenses. She also suggests that the bike race should occur on a weekend in mid-September to take advantage of the regions great fall season weather . . . After reviewing the business case, you ascertain that in addition to demonstrating that they could sponsor a successful event, PM University was selected to host this year's race based on the following benefits: The PM University Cycling Club expects to raise enough money after the costs of the event to partially offset the 30 club member expenses for a cycling trip to Vermont the following year. The trip is expected to cost $1,000 per member and the club hopes to defray half the costs through this bike race fundraising event. The Student Life department expects to leverage this successful, well-publicized event to promote PM University's support of a wide variety of fitness activities. Through surveys of incoming freshman over the last 3 years, the university discovered that providing an environment for physical fitness was very important to students when choosing a college. The County Commissioner's office expects to leverage this successful, well-publicized event to promote the county as a bike friendly place to live. The county is considered a "college town" so its reputation is very closely linked to the university's reputation. . . . . Since the race route will go past many local businesses, the university must involve county government officials. The event will cause traffic issues that disrupt normal business operations the day of the race, but the lost sales will be more than offset by the additional business the weekend of the race from the spectators, cyclists and visitors to the Fitness Exposition. The CBA estimates that the local economy around the university that hosts the race will realize $300,000 to $350,000 in additional revenue which equates to significant additional sales taxes for the county. In recognition of the additional revenues, the local governments usually provide free police and paramedic services the day of the race to ensure the safety of both participants and spectators as well as traffic control. . During your initial meeting with Penny, you are pre-assigned the following project core team members: Leonard - President of the PM University Cycling Club and Project Team Lead Bernadette-Treasurer of the PM University Cycling Club and Project Finance Coordinator Raj - Assistant to the County Commissioner and Project Liaison to County Commissioner Office Amy- PM University's Event Coordinator and Project Marketing Lead As Project Manager, you schedule a meeting with the Project Core Team as well as Penny, Howard (CBA Chairperson) and Sheldon (County Commissioner) to kick-off the Project. . . Additional Cost Information The Project Sponsor establishes a total budget for this project as the total estimated revenues generated from the project. Penny assumes that the Project Team will earn the extra funds from the post-event survey results and she also asks the Project Team to include defrayal of the costs of the Vermont Cycling trip within the Project Budget. Revenue Calculations: Entry Fees Individual Team Fitness Exposition Event Promotion & Prizes Post Event Survey 52,500 22,500 5,000 15,000 5,000 $35 per 1,500 cyclists $150 per 150 teams $ $250 per 20 vendors Received from CBA Additional Resource Information In addition to the people and groups specifically named within the Case Study, the following supplementary resources will be involved in the project: The County Sanitation department will clean-up after the Race including take-down of all the vendor booths. The Bicycle Club members not on the project core team will volunteer to set-up vendor booths and work the pre-event as well as day of race registration tables. They will also serve lunch to the participants after the race. The Project Team selected Garth Brooks as the pre-race event entertainment. Garth offered to perform the concert within the team's project budget since he is a PM University alumnus. Event Advertising, a local company used often by the University, was hired by the project team to create all advertising materials as well as course signage and perform all advertising campaign activities. The Police department agreed to install the course signage since they are already involved with traffic control the day of the race. Total Revenues $ 100,000 Cost Estimate Data: . Since you are an inexperienced project manager, the Project Team decides to engage a third-party consulting firm to assist with Project Management activities. The Project Team estimates that they will need to spend an average of $125 per work period for the duration of this Managment support. They estimate that the activity duration for this support is 70 days and that 2 consultants will be assigned 25% of their time. The Project Team estimates that they will need to spend $100 per day throughout the project for third-party Integration support not including Marketing & Promotion. Using the Pert Technique to estimate activity durations, their most likely estimate is 100 days for this support whereas their optimistic estimate is 85 days and their pessimistic estimate is 115 days. The Project Team Estimates that they will need to spend a third of the money from the CBA for Marketing & Promotion. The Project Team estimates that they will need to spend 20% of the expected Total Revenues on the Pre-event Entertainment. - The Project Team estimates that they will not need to spend any money on the Vendor Fitness Exposition other than the third-party Integration Support referenced above. The Project Team estimates that they will need to spend the following on Race Day: o $6 per race participant on the race day lunch All remaining money from the CBA on prizes The project team establishes a Contingency Reserve equal to 5% of the total Project Budget and the Project Sponsor establishes a Management Reserve with the excess revenues above the estimated project costs. Amount Project Cost Estimates Project Management Support Integration Support Marketing & Promotion Pre-event Entertainment Race Day Lunch Race Day Prizes Vermont Trip Reserve Cost Baseline $ Reserve Project Budget