Here is a detailed explanation in paragraph format covering:
✅ Administrative Aspects of Project Review
✅ Principles of Network Cost System
✅ Meaning of Cost Overrun and Time Overrun
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? Administrative Aspects of Project Review
Project Review is a critical administrative process conducted periodically to assess a project’s progress, performance, and alignment with objectives. The administrative aspects of project review focus on collecting accurate data, monitoring adherence to the project plan, and evaluating deviations. This includes reviewing schedules, budgets, quality standards, and compliance with legal and organizational policies. Effective project review requires proper documentation, coordination between departments, transparent reporting mechanisms, and involvement of key stakeholders such as the project sponsor, project manager, finance officers, and technical leads.
Administratively, project reviews are structured in phases—initial review, mid-term review, and post-completion review. Each phase requires the management team to verify whether project milestones, resource usage, and costs are within the approved limits. Reviews also involve risk re-evaluation, stakeholder communication, feedback from execution teams, and, if needed, corrective action planning. A well-administered project review ensures that the project remains under control and aligned with the strategic goals of the organization.
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? Principles of Network Cost System
The Network Cost System integrates cost management with time-based project planning tools such as CPM (Critical Path Method) and PERT (Program Evaluation and Review Technique). The core principles of this system revolve around linking each project activity with its corresponding cost, allowing a detailed and dynamic view of how changes in activity timelines impact the overall budget.
Key principles include:
1. Activity-Cost Mapping – Every task or activity in the network diagram is associated with direct and indirect costs.
2. Time-Cost Trade-off Analysis – The system supports crashing (reducing time by increasing cost) and identifies optimal duration where total cost (direct + indirect) is minimized.
3. Resource Optimization – Efficient allocation of labor, materials, and equipment is monitored through the network to prevent wastage.
4. Variance Monitoring – Any deviation from planned time or cost is immediately highlighted so that corrective actions can be taken.
5. Integrated Reporting – The system provides real-time tracking and cost summaries across project phases, aiding better decision-making and budget control.
This system ensures that project managers can analyze and update costs continuously as per progress reports and real conditions.
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⏳ Cost Overrun and Time Overrun – Explanation
Cost Overrun refers to the situation where the actual cost of a project exceeds the originally estimated budget. It often occurs due to underestimation of costs, poor planning, changes in scope, delays, inflation, or mismanagement of resources. Cost overruns strain the organization’s finances and can affect the viability or profitability of the project. For example, a project estimated at ₹5 crores may end up costing ₹6.5 crores due to material price hikes and labor shortages.
Time Overrun, also known as schedule delay, occurs when a project takes longer to complete than originally planned. This can be due to unrealistic deadlines, lack of skilled manpower, poor coordination, late approvals, or unexpected external events (e.g., weather conditions or policy changes). Time overruns often lead to increased costs, loss of market opportunities, penalties, and damaged credibility. For instance, a metro rail project expected to be completed in 3 years might take 5 years, affecting commuters and public trust.
Together, cost and time overruns are significant risks in project management. They indicate inefficiencies and call for better forecasting, stricter control systems, effective monitoring, and contingency planning. Adopting tools like network cost systems, earned value analysis, and robust review mechanisms can greatly help in reducing these overruns.
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✅ Conclusion
Understanding and managing the administrative aspects of project review, implementing strong network cost systems, and controlling cost and time overruns are critical to successful project execution. These practices not only ensure budget and schedule discipline but also enhance stakeholder trust and project sustainability in the long run.
