To open a bus transport
Explain the principles of cost-driven project design optimization?
Effective cost management is the primary measure of accountability for opening any business leadership. Cost management is very important for the success of the business. It includes a suitable and effective strategy implementation, reliability and productivity, ensure high level of quality, process discipline as well as providing the resources at the lowest cost. Effective cost management is the process of developing performance of the business in every situation. It is both strategic and operational. To open a bus transport, we need to acquire finance whether from near and dear one’s or loan from bank. After acquiring finance, we need to purchase a bus and select area in which we need to work. For such area, the owner of the bus has to take permission from the local authorities and government. Then, after proceeding with the legal working, the owner of the bus has to hire employees as much as lower cost to make large profit. It is the owner responsibility to lower the cost as much as possible (Nelson & Winter, 2001).
There are some basic principles of cost-driven project design optimization:
It provides clear and consistent project performance objectives.
The first of this process is the assurance of clear and consistent expectations. This is a bitter truth in the cost management where many managers experience in cost reduction such as reduction in the number of employees, cutting capital budgets, and product and designing rationalization. Cost reduction is necessary for any type of business. These actions are sometimes necessary, cost reduction lies in everyday process that address the root cause of staff reduction, cost cutting in expensive equipment’s, unprofitable expenses, and unnecessary product design. For example: to run a bus, it is necessary to schedule the shortcut of every root to reduce the over-expenses of the petrol and diesel (Mikkelsen, 2010).
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Cost effective management provide knowledge and various tools to succeed:
The level of basic knowledge and capability of doing any work becomes the essential component for the growth and success of any organization or transport business. The owner or manager of the business must know how to succeed in this massive competition. The owner of the bus must know that where he can find many passengers. He should to know the shortcuts of large routes to avoid the wastage of the petrol. The owner must know that the worker must talk to the passengers politely so they travel with them again on the same root (Nelson, 2013).
Understand the true cost of the business:
The standard cost is the primary component in large variety of decision making, from pricing and reporting to budget preparation, strategy formulation, and performance measurement. These are ie under the standard cost which is necessary for any kind of business. It is very difficult for any business to accept the base data which is used for many years (Busco & Riccaboni & Scapens, 2010).
Performance target:
An organization measures its performance with simple comparison of past and current level of performance which results in the success. Today, customer does not accept the delay or performance defects. Hence, it is very important for any company to work with minimum mistakes as much as possible.
The reduction in the organizational complexities:
Earlier, Luxuries are burden. Today, individual want high value products and services which can be used to describe the basic necessities of the life. To open a bus transport, we need to acquire finance whether from near and dear one’s or loan from bank. After acquiring finance, we need to purchase a bus and select area in which we need to work. For such area, the owner of the bus has to take permission from the local authorities and government. Then, after proceeding with the legal working, the owner of the bus has to hire employees as much as lower cost to make large profit. It is the owner responsibility to lower the cost as much as possible(Gale, 2001).
DEVELOP A FEASIBLE STUDY OF OPEN A BUS TRANSPORT:
Feasible Study Report is the officially documented feasibility study that summarizes results of the evaluation and analysis conducted to review the current solution. The purpose of the feasible study is to get the plans for the specific project which is really feasible, profitable and cost-effective. It supports the best solution for the comprehensive project (Mikkelsen, 2010).
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There are some steps to develop a feasible study report of open bus transportation:
- Set up of a business plan – A business plan is the official written documents which contain the plans of the future. This is a document which tells us what to do in future and what not to do to reduce the level of uncertainty in the future. A business plan is just like a strategic plan that tells how the work has to be started. Today, people have ample resources and abilities to take the business with full-fledged plan to a next level. For example: to open a bus transport, the owner of the bus has to plan about the area in which he has to work or from where he will get the financial support (Gigglier & Hemmer, 2011).
- Description of the business – The main idea behind opening bus transport is to help the people to connect with two different places easily. This project supports the main idea that a bus helps the common people to move in different places for different purposes within the affordable rates. The buses are used not only for corporate purposes, but also prominent for common people to access healthcare, education, and employment. The project claims about the fact behind the opening of various luxury bus transportation business is to provide people a feel of luxury that is unable to drive a car. The project throws a light to understand the different phases of bus transportation like planning before purchasing the bus, registration of buses or taking permits for those selected areas of local government and state government, or apply for a business license (Mikkelsen, 2010).
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- Management team – The manager of the company plays an important role in the success of the business. It is a responsibility of the managers to hire skilled employees. Managers must communicate with the employees in the regular intervals to know how they are feeling about the work or how they working. If any new employee needs some level of training, then must organize some training sessions for those new employees to make them familiar with the current working conditions. Managers should know that which employee is doing best or which employee is not doing well towards his job role. He must inform this to the owner of the business. To run a bus, there should be well skilled driver to run the bus. The owner of the bus must take a quick test to know how the employee is working (Kristina, 2015).
- Selection and permission of area – This is the most important part of any business to select the area in which they have to work and take permissions from the local authorities to work on the same. To run a bus, the owner of the bus has to select the area in which he will carry passengers on daily basis. The passengers would be much familiar that this bus will come to this route to take them to their destination. After the selection of the area, the owner of the bus has to seek permission from the local authority to drive in that area (Kristina, 2015).
- Examination of problems and risk – To avoid any kind of uncertainty, the owner of the company must plan for various alternatives. To run a bus, it’s a duty of owner to know what risks can come in their way and find the solution though. There is a possibility that the bus may stopped, they must have one mechanic with them to avoid such delays for passengers. They must have some liters of petrol with them to avoid any delay (Burns, 2013).
- Financial plans- To start any business, money play a key role to run it successfully. The owner of the business can take loan from the bank, friends, and family. They can take loan by having a legal agreement in which the owner promises to pay the money on the stipulated time. The level of basic knowledge and capability of doing any work becomes the essential component for the growth and success of any organization or transport business. The owner or manager of the business must know how to succeed in this massive competition. The owner of the bus must know that where he can find many passengers. He should to know the shortcuts of large routes to avoid the wastage of the petrol. The owner must know that the worker must talk to the passengers politely so they travel with them again on the same root (Gigglier & Hemmer, 2011).
Technique to study a data to run a bus
PERT technique is the useful tool to manage and schedule complex projects (Maury, 2012). A Gantt chart helps us to plan all the important tasks that must be completed on time as a part of the project. PERT review technique acts as the core both for resource planning and project evaluation. During the project management, they allow us to detect attainment of project goals. It provides you remedies that need to be taken for the success of the project. For the project, it is likely that you will display the project as Gantt charts (using Microsoft excel, spreadsheets or other software) (Burns, 2013).
For example: Opening a bus transport
SEASON REQUIREMETS OF CASH INFLOW AND OUTFLOW:
CASH INFLOW BUDGET (2018)
Riding fee from customer 10,000
Non-collections (-2000)
Total inflows: 8,000
CASH OUTFLOW
Salaries 20,000
Registration fee for permission 5000
Total outflow: 25,000
Accounting Principles:
Accounting principles are the guidelines and rules that an organization or a company must follow when reporting financial data. The set of accounting principles is also known as generally accepted accounting principles. Accounting principles are different around the world (Selvi, 2011).
Types of accounting principles:
Business Entity Concept
Going Concern Concept
Money Measurement Concept
Cost Concept
Accounting Period Concept
Dual aspect concept
Planning out and working on your company requirement and financial projections each year could be one of the best decision for your business. The formal type of projection are less important than any other business process. The strategic planning helps you to come out of daily problems of the running company (Gray & Owen & Adams, 2010).
Regular planning helps the company to deal with inside and outside problems of the company. Regular planning helps in tackle with the new developments. Planning is a tool to control big mistakes. We know that rapid growth creates a cash shortage due to big investment. Planning helps in calculate the how much the company should invest in the following matter (Mikkelsen, 2010).
There are several types of projections:
This is a model which depicts the current year or 12 month period.
A plan should be strategically used over 5 years.
Budgets, generally covers 1 year.
The financial projection should be broken in months for a year. It must include both income statement and balance sheet. Cash inflow and outflow should be clearly identified. The project claims about the fact behind the opening of various luxury bus transportation business is to provide people a feel of luxury that is unable to drive a car. The project throws a light to understand the different phases of bus transportation like planning before purchasing the bus, registration of buses or taking permits for those selected areas of local government and state government, or apply for a business license (Mikkelsen, 2010).
FINANCIAL PROJECTION:
Revenue:
2009
2010
2011
2012
2013
2014
2015
Bus
–
123
500
1200
3500
7000
4000
T.Revenue
–
123
1000
3500
3500
3000
9000
Expenses:
salaries
10
53
505
1353
2352
3299
4338
Licensing
10
9
43
80
125
177
263
Equip.
0.3
45
158
388
663
995
1537
labor
–
32
668
1464
2252
3787
4798
Total expenses:
22.3
107
122
1415
1608
1748
2064
REFERENCES:
Burns, J. 2013. The dynamics of accounting change: inter-play between new practices, routines, institutions, power and politics. Accounting, Auditing and Accountability Journal, 13: 566–596.
Busco, B, Riccaboni, A and Scapens, RW. 2010. Trust for accounting and accounting for trust
Dr. K. Selvi, D. (2011). Contemporary practices. Indian Journal of Applied Research, 3(3), 238-240.
Gale, J. (2001). Critical Path Methods. OR, 18(3), 319.
Gray, R., Owen, D. and Adams, C. (2010) Accounting and accountability. London: Prentice Hall.
Gigglier, F. B. and Hemmer, T. (2011) Conservatism, Optimal Disclosure Policy, and the Timeliness of Financial Reports. Accounting Review, 76 (4), pp. 471.
Kristina, (2015). Project development by involving PERT. Operations Research, 11(1), 156-156.
Mikkelsen, H. (2010). Quality of project work and project management. International Journal of Project Management, 8(3), 138-143.
Meyer, P., & Visser, J. (2012). IMPROVING PROJECT SCHEDULE ESTIMATES
Maury, E. (2012). How to identify path critical to a project. Journal Of Critical Path, 19(1), 23-28.
Nelson, R and Winter, S. 2008. An Evolutionary Theory of Economic Change
Pfeffer, J. (2017): Competitive advantage through people: unleashing the power of the workforce. Boston: HBS Press.
Rogers, J. L. and Stocken, P. C. (2012) Credibility of Management Forecasts. Accounting Review, 80 (4), pp. 1233-1260
Scapens, RW. 2012. Never mind the gap: towards an institutional perspective on management accounting practice. Management Accounting Research, 5: 301–321
Sisson, K. (2012). Human resource management and the personnel function – a case of partial impact? In J. Storey (Ed.), Human Resource Management – A critical text. London: Blackwell.