Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Project Management > Cost > Flashcards

Cost Flashcards

1
Q

What is the project cost management process?

A 
Includes the processes:
plan cost management
Estimate costs
Determine budget
Control costs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is a budget?

A

Spreads costs over time, allocating funds to the resources needed to have the project meet its schedule

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a contingency reserve?

A

Costs of the response solutions for known project risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the cost baseline?

A

The approved version of the time-phased project budget, excluding any management reserves. It is used as a basis for comparison to actual project results and can only be changed through formal change control procedures.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the 4 project management processes that belong to project cost management?

A

Determine budget
Plan cost management
Estimate costs
Control costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are trends and emerging practices in the project cost management process?

A

Earned value management

Earned schedule

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is earned value management?

A

A methodology that combines scope, schedule, and resource measurements to assess project performance and progress against the project baseline.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is Earned schedule?

A

Replaces the schedule variance measures used in traditional earned value management. Schedule variance equation is ES - AT (earned schedule - actual time)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are some tailoring considerations for the project cost management process?

A 
Knowledge management
Estimating and budgeting
Earned value management
Governance
Agile methodologies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are some questions to ask when tailoring for project cost management?

A

“Does our organization have a formal knowledge management and financial database repository that project managers should use?”
“Does our organization have existing formal or informal cost estimating and budgeting related policies, procedures and guidelines?”
“Does our organization use EVM in managing projects?”
“How accurate were our cost estimates? What can we learn from our cost estimating errors and our accurate estimates?”
“Does our organization have formal or informal cost audit and governance policies, procedures and guidelines?”
“Does our organization use methodologies in managing projects? Are we doing a good job of estimating costs for these projects?”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are considerations for agile/adaptive environments for the project cost management process?

A

Requires more collaboration between stakeholders, different approaches for prioritizing and assigning tasks, and increased adaptability for changes and quality assurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the purpose of the plan cost management process?

A

Documents cost management processes and their associated tools and techniques.
Defines how the project costs will be estimated, budgeted, managed, monitored and controlled.
Sets the framework that allows cost processes to be efficient and coordinated.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the cost management plan?

A

Describes how the project costs will be planned, structured and controlled. It is based on project cost estimates and is a component of the project management plan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the inputs to the plan cost management process?

A

Enterprise environmental factors
Organizational process assets
Project management plan
Project charter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the outputs to the plan cost management process?

A

Cost management plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the tools and techniques used in the plan cost management process?

A

Expert judgement
Meetings
Data analysis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the estimate costs process?

A

Sets the stage for the budget and allows your to consider the details and features of project activities. Develops an approximation of the cost of resources needed to complete project work.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is a cost estimate?

A

A quantitative assessment or prediction of the likely costs of resources required to complete project work. Estimations should be made for all resources such as labor, materials, equipment, services and facilities. Includes contingency amounts to account for identified risks and management reserve to cover unplanned work.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What should the estimates include?

A

The “root”, the method and the assumed accuracy. Should consider cost alternatives, cost trade-offs and risks.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What are the inputs to the estimate costs process?

A

Project management plan
Organizational process assets
Enterprise environmental factors
Project documents

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are the outputs to the estimate costs process?

A

Project documents updates
Cost estimates
Basis of estimates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What are the tools and techniques to use with the estimate costs process?

A 
Bottom up estimating
Project management information system
Expert judgement
Parametric estimating
Three point estimating
Analogous estimating
Decision making
Data analysis
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is bottom up estimating?

A

Takes detailed estimates done at the work package level to determine the most accurate estimate possible. Begins with estimating the cost of individual work packages or activities to the greatest level of detail. The detailed cost is then summarized or rolled up to higher levels for reporting and tracking.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is three point estimating?

A

Used to account for uncertainty in the cost estimate by using a formula. Stakeholders will provide estimates for optimistic, most likely and pessimistic scenarios.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is triangular distribution?

A

Preferred when there is insufficient historical data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What is beta distribution?

A

Used when there is sufficient historical information.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What is parametric estimating?

A

Uses the relationship between historical data and other variables to calculate a cost estimate. The number of units is multiplied by the cost per unit to derive a cost estimate for that particular entity.

28
Q

What is analogous estimating?

A

Uses historical data from a similar activity to compare current work to previous similar work. Compares the size of the previous work to the expected size of the current work. The ratio of the current work to the previous work is multiplied by the previous cost to determine an estimate.

29
Q

What types of data analysis techniques are used to estimate costs?

A

Alternatives analysis
Reserve analysis
Cost of quality

30
Q

What is alternatives analysis?

A

Used to evaluate identified options to select which approaches to use to perform the project work

31
Q

What is reserve analysis?

A

Allows the stakeholders and the project team to consider contingency reserves that account for cost uncertainty.

32
Q

What is cost of quality analysis?

A

Used to prepare estimates. Includes evaluating the impact of conformance costs versus nonconformance costs. Money spent to avoid failures like training, inspections, audits. Nonconformance costs is money spent because of failures like rework or damage.

33
Q

What is the purpose of the determine budget process?

A

To aggregate the estimated costs of individual activities or work packages to establish an authorized cost baseline.

34
Q

What is the cost baseline?

A

The approved version of the time-phased project budget, excluding any management reserves, It shows when the money will be spent, usually broken into phases, can only be changed through formal change control procedures, and is used as a basis for comparison to actual results. Developed as a summation of the approved budgets for the different schedule activities.

35
Q

What is the key benefit to the cost baseline process?

A

Determine the cost baseline against which project performance can be monitored and controlled.

36
Q

What is the difference between the project budget and the cost baseline?

A

A project budget includes all the funds authorized to execute the project. The cost baseline is the approved version of the time-phased project budget that includes contingency reserves but excludes management reserves. A project may have multiple cost baselines.

37
Q

What is another term for cost baseline if earned value measurements are applied?

A

Performance measurement baseline

38
Q

What are the inputs to the determine budget process?

A 
Enterprise environmental factors
Organizational process assets
Project documents
Project management plan
Business documents
Agreements
39
Q

What are the outputs to the determine budget process?

A

Project documents updates
Project funding requirements
Cost baseline

40
Q

What are tools and techniques used in the determine budget process?

A 
Funding limit reconciliation
Data analysis
Expert judgement
Historical information review
Cost aggregation
Financing
41
Q

What is funding limit reconciliation?

A

Determines whether or not the expenditure of funds exceeds any project funding limits. A variance between the funding limits and the planned expenditures could mean rescheduling work to level of the expenditures. This is accomplished by placing date constraints for work into the project schedule.

42
Q

What is cost aggregation?

A

An essential tool that can be used to determine the overall budget. Cost estimates are first aggregated by work packages in accordance with the WBS. The work package cost estimates are then aggregated for the higher levels of the WBS and ultimately for the entire project.

43
Q

What is the control costs process?

A

Monitors the budget to look for variances from the approved cost baseline

44
Q

What is required for controlling costs?

A

Knowledge of actual costs spent to date and analyzing the relationship between the consumption of funds to the work being accomplished.

45
Q

What does project cost control include?

A

Influencing factors that create changes to the baseline
Monitoring cost performance to isolate variances
Monitoring work performance against funds expended
Preventing unapproved changes
Informing stakeholders of approved changes
Bringing expected cost overruns within acceptable limits

46
Q

What is work performance information?

A

Includes information on how the project work is performing compared to the cost baseline.

47
Q

What is Budget at Completion (BAC)?

A

The total budget allocated to the project

48
Q

What is Estimate at Completion (EAC)

A

The expected total cost of completing all work expressed. Actual Cost (AC) + Estimate to Complete (ETC)

49
Q

What is earned value analysis (EVA)?

A

Shows the health of the project by integrating scope, schedule and cost. Can be reported for the current reporting period and cumulatively. Can be used to forecast total cost of project at completion and the efficiency required to complete the project

50
Q

What are the 3 key dimensions for EVA?

A

Planned value
Earned value
Actual cost

51
Q

What is planned value (PV)?

A

The authorized budget assigned to scheduled work. The total of the PV is sometimes referred to as the performance measurement baseline (PMB)

52
Q

What is earned value (EV)?

A

A measure of work performed until a specific date, expressed in monetary value obtained as a result of the work performed. The EV needs to relate to the PMB. The EV cannot be greater than the authorized PV budget for a component. The EV is often used to calculate the percent complete of a project.

53
Q

What is actual cost (AC)?

A

The budget spent until a specific date for the work performed until that date. The total cost incurred in accomplishing the work that the EV measured.

54
Q

What is variance analysis?

A

Collects and assembles information on project performance variances. Common topics are schedule, cost, and quality variances.

55
Q

What is variance at completion (VAC)?

A

A projection of budget (deficit or surplus) expressed as the difference between the budget at completion (BAC) and the estimate at completion (EAC). VAC=BAC-EAC

56
Q

What is schedule variance (SV)?

A

A measure of schedule performance. SV=EV(Earned value)-PV(planned value)

57
Q

What is cost variance (CV)?

A

The amount of budget deficit or surplus at a given point in time. CV=EV(Earned value)-AC(Actual cost)

58
Q

What is the schedule performance index (SPI)?

A

A measure of schedule efficiency. If the result is greater than 1, more work was completed than was planned. SPI=EV(Earned value)/PV(Planned value)

59
Q

What is the cost performance index (CPI)?

A

Measures the cost efficiency of budgeted resources. If the result is greater than 1, the project is saving money. CPI=EV(Earned value)/AC(Actual value)

60
Q

What is trend analysis?

A

Examines the project performance over time to determine if performance is improving or deteriorating.

61
Q

How is earned value management represented on a chart?

A

By three parameters, EV, PV and AC, with cost and time represented on the Y and X axis.

62
Q

What is the estimate at completion (EAC)?

A

A forecasted measurement based on various risk scenarios.

-If the project has a setback but future work will be performed at the budgeted rate use formula: EAC=AC+(BAC-EV)

63
Q

What is the purpose of reserve analysis during cost control?

A

To monitor the status of contingency and management reserves to determine if these reserves are still needed or if additional reserves should be requested.

64
Q

What is the to-complete performance index (TCPI)?

A

A measure of the cost performance that should be achieved with the remaining resources in order to meet a management goal. It’s an indication of the efficiency the project manager will have to achieve in order to meet the original goals. Express as a ratio of the cost needed to finish the work to the remaining budget. TCPI=(BAC-EV)/(BAC-AC)

65
Q

What are the inputs to the control costs process?

A 
Work performance data
Project documents
Project management plan
Organizational process assets
Project funding requirements
66
Q

What are the outputs to the control costs process?

A 
Project documents updates
Change requests
Work performance information
Cost forecasts
Project management plan updates
67
Q

What are tools and techniques used in the control costs process?

A

Data analysis
Expert judgement
To-complete performance index
Project management information system

Project Management (13 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions