Chapter 9 Flashcards
Project Budget
An itemized list of estimated expenses needed to complete the work of a project.
What are the 3 types of Project Costs
- Human Resources
- Administrative
- Physical Costs
Human Resource Costs
Personnel Costs, salaries and benefits
Administrative Costs
Everyday costs that support the project, but aren’t directly related to the project. Example: phones, internet, office supplies.
Physical Costs
Materials that are needed specifically for the project.
Direct Costs
Costs that are specifically related to the project.
Indirect Costs
Costs that are associated with the project, but not directly related to the work of the project.
Where to find expenses?
project goals, activities list, WBS, project schedule, resource list, RIR chart
What is the Budgeting Process
- Review Planning Documents
- Create cost estimates and integrate with project schedule
- Submit budgets for approval
- Notify appropriate team members and stake holders when the budget is approved
- Assign code accounts to the WBS elements
- Pubish the project budget on the porject’s intrant site
Budget Items
Everything needed for the project that cost something.
What are the estimating techniques?
- Analogous
- Bottom-up
- Resource Cost Rates
- Parametric
- Computerized Tools
- Ask Experts
- As Vendors
Analogous Estimating
Establishing an estimate for the project based on the actual costs of previous projects similar in size and scope of the current project.
Bottom-up Estimating
Establishes individual estimates for each activity and adds them all together to determine a total estimate for the project.
Resource Cost Rates
Getting cost estimates in the form of quotes
Parametric Estimating
Quantitatively based and multiples the number of units times the cost to determine the estimate
Computerized Tools
Project management software packages allow you to put cost estimates on the activities listed in the project schedule.
Ask Experts
Ask experienced people for their cost estimates
Ask Vendors
Asking Vendors for quotes or their own cost estimates.
Contingency Reserve
Money added to the budget to pay for unexpected events
Who approves the budget?
project sponsors, ket stakeholders and finance manager usually sign off on the budget
Cost Baseline
The expected cost of the project. (used to measure the actual project expenses against the budget expenses)
Cost estimate worksheet components
- WBS ID
- WBS element description
- Cost estimate
- Comments
