Chap 7. Project Cost Management Flashcards
What is value engineering in cost management?
a systematic approach to finding less costly ways to complete the same work.
What is a life-cycle cost in cost management?
It is a cost associated with after-the-project costs, such as maintenance and service.
Rank the cost estimation methods from least accurate to most accurate.
ROM (Rough Order Magnitude) <
Do you need cost estimates before cost budgeting?
Yes.
What are the 4 processes in project costs management?
- Plan Cost Management Plan
- Estimate Costs
- Determine Budget
- Control Costs
What are the differences between cost estimates, basis of estimates and cost baselines?
- Process difference:
Cost estimates and basis of estimates are Outputs of “Estimate Cost” Process. Cost Baseline is an output for Determine Budget process.
- Tool & Technique differences:
Cost estimates uses various forms of analysis in estimating, while cost baseline is focused on cost aggregation and funding limit reconciliation.
What is cost estimates? (Project Cost Management)
- It is the output from Estimating Cost in Project Cost Management.
- It includes probable costs assessed to complete project work, contingency $ for risks, management reserve for unplanned work.
- To generate cost estimates, tool & techniques sued are various types of estimating technique, including analogous estimating, three-point estimating, etc.
What is cost baseline? (Project Cost Management)
- It is the output of Determine Budget process in Project Cost Management.
- It is the approved version of the project budget, excluding management reserve.
- It always goes after cost estimates is established.
Project Budget = Management Reserve + Cost baseline
Cost baseline = Control Accounts
Control accounts = contingency reserve + Work Package Estimates
remember that!
What is cost forecasts?
- It is the calculated EAC (Estimates at Completion) or a Bottom-up EAC value that will be documented and communicated to stakeholder.
- It is the outputs from Control Costs Process in Project Cost management.
Key features of Control Costs from project cost management?
- Control Costs maintains that cost baseline throughout the project.
What is also called a top-down estimating and requires less time to complete the cost estimates?
Analogous Estimating.
What type of cost estimates use a known parameter (like cost per unit) to estimate costs?
Parametric Estimating. Also includes regression analysis in parametric estimating.
What type of estimates use the average of Optimistic costs, Most Likely Costs and Pessimistic Cost?
Three-point estimating
What type of estimates use the average of Optimistic costs, Most Likely Costs and Pessimistic Cost, and weighted towards Most Likely?
PERT Estimating (program Evaluation and Review Technique)