Budget & Resources Flashcards
According to the Process Groups model, what are the processes of cost management?
Plan Cost Management
Estimate Costs
Determine Budget
Control Costs
What combined baselines are called the performance measurement baseline?
Scope, schedule, and cost baselines
What is earned value analysis, and how is it used?
It is an analysis method that uses earned value and other metrics to evaluate how well the project is doing relative to what was planned to date
Together with other measures the project manager can determine the overall project performance against the performance measurement baseline
What is earned value management (EVM)?
The practice of managing scope, schedule, and cost using earned value analysis to control the project
What artifact results from the Plan Cost Management process?
Cost management plan
What artifacts are needed for the Estimate Costs process?
Resource requirements documentation
Cost and quality management plans
Scope and schedule baselines
Lessons learned and risk registers
Policies and historical records related to estimating
Templates and processes including those from past projects
Corporate governance
Marketplace conditions, commercial cost databases, exchange rates, inflation, and supply sources
How do variable costs differ from fixed costs?
Variable costs change with the amount of production or amount of work done on the project
Fixed costs do not change as production changes
What is a direct cost?
What is an indirect cost?
Direct cost: A cost that is directly attributable to the work on the project
Indirect cost: Overhead costs or costs incurred for the benefit of more than one project
Name the advantages of analogous estimating.
Quick
Activities do not need to be identified
Less costly to create
Provides cost constraints to evaluate high-level project feasibility
Overall project costs will be capped
Name the advantages of bottom-up estimating.
More accurate
Gains buy-in from the team
Based on a detailed project and deliverable analyses
Provides a basis for monitoring and controlling, performance
measurement, and management
Name the typical range for the following:
rough order of magnitude (ROM) estimate
budget estimate
definitive estimate
ROM estimate: –25 to +75 percent from actual
Budget estimate:–10 percent to +25 percent from actual
Definitive estimate:+/–10 percent from actual
What key artifacts result from the Estimate Costs process?
Cost estimates
Basis of estimates
Updates to project documents
What methods are used to estimate costs in an adaptive environment?
T-shirt sizing
Affinity estimating
Planning Poker®
What is cost aggregation?
Pulling together the costs of all activities
At what point are contingency reserves added to the budget?
After risk management planning
What is the difference between a cost budget and a cost baseline?
The cost baseline is an estimated total cost performance measurement baseline; it does not include the management reserves
The cost budget is the total that includes the cost baseline + management reserves
What agile tool can be used to anticipate future budgetary issues on agile projects?
Velocity
On adaptive projects the majority of cost estimates for projections and estimate at completion are based on what?
Burn rates
What key artifacts result from the Determine Budget process?
Cost baseline
Project funding requirements
Updates to project documents
How can progress reporting help the project manager?
It can help control schedule and costs
It can help the project manager assess whether the project is on track through earned value analysis
What is the purpose of reserve analysis?
It allows the project manager to identify and apply lessons learned in controlling costs
Cost control includes analyzing where contingency reserves are still necessary or where new reserves are required
What is the difference between planned value and earned value?
Planned value is the estimated value of the work planned, as of today
Earned value is the estimated value of the work actually accomplished, as of today
What is actual cost
What is budget at completion?
The actual cost incurred for the work accomplished, as of today
The project’s planned budget; indicates what the end cost of the project would be if everything went according to plan
What is the formula for cost variance?
EV − AC = CV
