LEAD 4033 Module 3 Resource Allocation and Budget Plan Example

People, Money and Equipment: Allocating Resources and Budgeting the Second Clinic

Student Name

American College of Education

LEAD4033: Project Management

Module 3 Assignment

Instructor Name

October 26, 2026

Introduction

The schedule for our second veterinary clinic runs thirty-four weeks to a September 13, 2027 opening, along a critical path that leaves little room for delay. A schedule assumes that the right people, money and equipment will be available when each task begins. This paper tests that assumption. It identifies the people the project needs and when, resolves the main conflict between project work and the daily demands of our original clinic, turns the charter's summary budget into a detailed one built from quotes, phases spending across the year and sets out how costs and the contingency will be controlled.

The People the Project Needs

Five internal people carry most of the project work, and all of them have full-time jobs at the original clinic. As project manager, I plan to spend about half my time on the project from February through opening, with my other duties covered partly by the office supervisor. The veterinarian who will become medical director at the new clinic needs about four hours a week to review design and equipment choices from March through July and then two full weeks in August for setup and training. Our lead technician is needed for equipment selection in the spring and full time for three weeks in August and September to lead training. The office supervisor supports recruitment and builds the front desk procedures. An outside IT contractor installs the network and phones under a fixed-price agreement.

The Competing Priority

Engwall and Jerbrant (2003) described a resource allocation syndrome in organizations running projects alongside regular work, where the same people are pulled in several directions and priorities are renegotiated constantly. Laslo and Goldberg (2008) found that this kind of competition for shared resources tends to produce conflict between project and functional managers unless it is planned for. Our version of the problem is plain. When I drew a simple resource histogram, showing hours needed each week by person, the lead technician's chart rose above 100 percent in late August, because training at the new clinic overlapped with the original clinic's busy late-summer schedule. The medical director's chart showed a similar peak. If nothing changed, either the opening or the care of existing patients would suffer, and neither is acceptable.

Leveling the Conflict

I considered three responses. Delaying training would push the opening past mid-September and into the autumn vaccination rush, which the charter specifically avoids. Shortening training would risk errors in a new building with new staff. The chosen solution combines resource leveling with added capacity. Software training, which does not require the new building, moves earlier to the first two weeks of August and is delivered online in the evenings and on two Saturdays, flattening the peak. For the three weeks of on-site training, the original clinic will hire a relief technician through a staffing agency and add one relief veterinarian day per week. These costs, $11,400 in total, are added to the project budget as pre-opening staffing because the project causes them.

From Summary to Detailed Budget

The charter allocated $1,200,000 in eight categories. I rebuilt each category from quotes and estimates. Build-out and design remains $520,000: architecture and engineering, $42,000; permits and fees, $8,000; the construction contract, $438,000, or about $104 per square foot; x-ray room shielding, $22,000; and exterior signage, $10,000. Medical equipment remains $410,000, led by the digital x-ray system at $95,000, the dental unit with dental radiography at $58,000, the laboratory analyzers at $54,000 and the ultrasound at $45,000, with anesthesia machines and monitors, surgical table and lights, kennels, sterilization and smaller items making up the balance. Technology and phones, $45,000, and furniture, $35,000, are unchanged.

Adjusting the Smaller Categories

Three smaller categories changed. Opening inventory of drugs, vaccines and supplies fell from $40,000 to $34,000, because our distributor agreed to stock the pharmacy at the new clinic on the same terms as the original one and to accept returns of slow items. Pre-opening payroll rose from $25,000 to $36,400 with the relief staffing described above. Launch marketing remains $15,000. Together, these changes raise the base budget from $1,090,000 to $1,095,400 and reduce the contingency to $104,600 so that the total stays at the approved $1,200,000. I reported this change to the sponsor before finalizing it, since it uses part of the contingency before construction begins.

Sizing the Contingency

Cost estimates for building projects are often too low. In a study of transportation infrastructure, Flyvbjerg et al. (2002) found that costs were underestimated in almost nine out of ten projects and that the pattern had not improved over decades. Our project is far smaller, but construction is still the category most likely to grow. I therefore divided the contingency into two parts. About $60,000 is set aside for construction, roughly fourteen percent of the contract value, to cover surprises behind the walls of the leased shell, plumbing that must be relocated for the surgery suite. The remaining $44,600 covers everything else, including equipment price changes and delays that add payroll. Any draw on either reserve requires the sponsor's approval and a written reason.

Phasing the Spending

Spending is uneven, and the practice needs to know when cash will leave its accounts. In the first quarter of 2027, about $62,000 goes mainly to design fees, permits and recruitment advertising. In the second quarter, about $398,000 covers construction progress payments and deposits on long-lead equipment. In the third quarter, the remaining $635,400 covers the construction balance, equipment delivery, technology, furniture, inventory, payroll and marketing. The practice will draw on an equipment loan for the medical equipment and pay the build-out from savings and a line of credit, so the quarterly plan has been shared with the bank to time each draw.

Equipment as a Resource

Some equipment can be shared between the clinics rather than bought twice. The original clinic's portable dental x-ray sensor and its spare anesthesia monitor will move to the new clinic for its first months, delaying two purchases worth about $14,000 until volumes justify them. That saving has not been removed from the budget; it is held as a buffer within the equipment line in case the x-ray quote rises before the order is placed in May. Conversely, the new clinic's ultrasound will be available to the original clinic one day a week, because the original clinic's machine is old and booked solid.

Tracking Costs

Every invoice will be coded to a WBS work package, so actual costs can be compared with the budget for each branch. I will review a cost report every two weeks and present it with the schedule at the partners' monthly meeting. Any work package that exceeds its budget by more than five percent will be explained in writing, along with whether the overrun will be recovered elsewhere or drawn from contingency. Module 4 will add an earned value approach so that cost and schedule can be read together.

Conclusion

Resources, not just tasks, determine whether the second clinic opens on time. The plan assigns people with their other duties in mind, uses a histogram to expose a late-summer conflict and solves it by moving software training earlier and adding relief staff. The budget is rebuilt from quotes, held at $1,200,000 by adjusting the contingency with the sponsor's knowledge, phased by quarter for the bank and tracked by work package. Module 4 turns to risk management and control.

References

Engwall, M., & Jerbrant, A. (2003). The resource allocation syndrome: The prime challenge of multi-project management? International Journal of Project Management, 21(6), 403-409. https://doi.org/10.1016/S0263-7863(02)00113-8

Flyvbjerg, B., Holm, M. S., & Buhl, S. (2002). Underestimating costs in public works projects: Error or lie? Journal of the American Planning Association, 68(3), 279-295. https://doi.org/10.1080/01944360208976273

Laslo, Z., & Goldberg, A. I. (2008). Resource allocation under uncertainty in a multi-project matrix environment: Is organizational conflict inevitable? International Journal of Project Management, 26(8), 773-788. https://doi.org/10.1016/j.ijproman.2007.10.003