Budgeting Cost Management

Question 1

What is a cumulative s curve?

Answer 1

Prediction of what you are going to spend at what point
Cost and schedule
Used to assist with budget management

Question 2

What is a cost breakdown structure?

Answer 2

• Allocate costs to each activity
• A system will then produce cost reports for management action

Question 3

3 differences between cost planning in linear and iterative?

Answer 3

1. Linear - money up front whereas iterative drip fed depending on the sprint
2. Linear - clarity on costs but iterative has less certainty as the sprints develop
3. Linear - linear is event driven but iterative is event driven

Question 4

What is earned value management?

Answer 4

It is a project control process based on a structured approach to planning, cost collection and performance management.

It is a comparison between planned costs, actual costs and earned value (useful work).

Question 5

What are the three elements to earned value?

Answer 5

Planned costs - estimated
Earned value - useful work done
Actual costs - what is being spent

Earned value analysis is then the comparison of these three.

Question 6

What are the positives of earned value analysis? They won’t ask about negatives.

Answer 6

Positives

1. Helps see how we are doing - snapshot visual aid - if it less than 1, it ain’t good and will be over budget or over time or over 1 then good as it will be under budget or completed quicker
2. Used to justify further costs - helps with requests for more money
3. Helps resource planning for sponsor - move people around to support

Question 7

What does over and under 1 mean for earned value analysis?

Answer 7

It is good - under budget and/or completed quicker
Under 1 is bad