7 Cost Flashcards
Cost management KA
Processes involved in planning, estimating, budgeting, financing, funding, managing and controlling costs
1 plan cost management (planning)
2 estimate costs (planning)
3 determine budget (planning)
4 control costs (monitor and control)
Cost Management: key concepts
Cost of resources to complete activities Project costs vs. Operating/maintenance Cost measurements - stakeholders/times? When to recognize Considerations: > financial performance > ROI > discounted cash flow > payback
Cost management: trends and emerging practices
EVM - earned value management
> include earned Schedule theory (ES)
ES-> extension of EVM
ES replaces schedule variance measures in EVM
If ES > 0 = ahead of schedule
Agile considerations for Cost management
Not helpful to have detailed costs, there are too many changes
Better -> fast and light estimates -> high level forecasts
Detailed estimates only for short term
Plan Cost Management Process
Planning
Define how the project costs will be estimated, budgeted, managed, monitored and controlled
Describes how to manage costs from start to finish, i.e. who can approve, etc.
done once or at specific times (usually early)
Plan Cost Management: Inputs
Project charter PM plan >schedule management plan >risk management plan EEF/OPA
Plan Cost Management: Outputs
Cost management plan
Cost management plan contains:
Units of measure Level of prediction Level of accuracy Organizational procedure links Control thresholds Rules of performance measurement Reporting formats Additional details
Estimate Costs Process
Planning
Approx cost of resources
Performed throughout the project as needed
Estimate Costs: Inputs
PM plan >cost management plan >quality management plan >scope baseline Project Documents >LL register >project schedule >resources requirements >risk requirements EEF/OPA
Estimate Costs: T/T
EJ Analogous estimating (similar to estimating activities) Parametric estimating Bottom up estimating Three point estimating Data analysis >alternative analysis >reserve analysis >cost of quality PMIS Decision making >voting
Estimate Cost: Outputs
Cost estimates Basis of estimates Project documents updates > assumption log > LL register > Risk register
Estimate costs - concepts
Best guess of cost to complete activities
With info today try to predict cost
Costing options vs. Risks, buy/lease/share
Units of currency or units of measure
Accuracy follows project life cycle ( less accurate at the start (-25-+75%), more accurate at the end)
Estimate Costs: Type of costs
... Pg 283 Rita Variable Fixed Direct Indirect
Determine Budget Process
Planning
Aggregating estimated costs of individual activities or work packages to establish authorized cost baseline
Define cost baseline to measure project performance against
Done once or at specific times
