Cost management

Question 1

Cost management process

Answer 1

Plan cost management (Planning)
Estimate costs (Planning)
Determine budget (Planning)
Control costs (Monitoring & Controlling)

Question 2

Plan cost management (Planning) 1st

Answer 2

-How the project costs will be managed

Output: Cost management plan

Question 3

Plan cost management (Planning) 1st
Cost management plan

Answer 3

-Units of measure
-用幾多小數點位
-Budget variance 幾多你就會take action
- Rules of performance measurement
-Reporting formats

Question 4

Estimate costs (Planning) 2nd

Answer 4

-Develop 大概你需要既資料係呢個project 上
-估計要幾多成本去完成project

Input:
Scope baseline
Project schedule ( Type, quantity, and amount of time that the team and physical resources will be active on the project)
HR plan
Risk register (risk of the project)
project management costs

Question 5

Estimate costs (Planning) 2nd
Tools and techniques

Answer 5

-One point estimate
-Analogous estimate
-Parametric estimate
-Three point estimate

-Bottom up estimate
Est. rolled up to control account , then into overall project estimate

Question 6

Estimate costs (Planning) 2nd
Accuracy of estimate

Answer 6

• 一開始一定唔準, 之後先會準
  -Estimate must be in a range

1. Rough order of Magnitude (ROM) estimate
   開始先用, -25 to 75% from actual
2. Budget estimate
   Planning 先用, -10% to 25 % from actual
3. Definitive estimate
   最後先用, -10 to 10 , or -5 to 5

Question 7

Determine budget (Planning) 3rd

Answer 7

-加曬所有estimated cost of individual activities 去做個cost baseline
-Determines the cost baseline
-Project estimate 要加risk management ==> 姐係reserve
Contingency reserve / Management reserves

Tools:
Financing

Output:
Cost baseline
Project function requirement

Question 8

Determine budget (Planning) 3rd
Cost baseline

Answer 8

Funds authorized for PM to manage and control
包括Contingency reserve

Cost baseline + Management reserve = Cost budget

Question 9

Control costs (Monitoring & Controlling) 4th

Answer 9

-Monitoring status and update the project cost
-Managing changes to the cost baseline
-Recognize variance from plan

Question 10

Control costs (Monitoring & Controlling) 4th
Earned value management (EVM) - Variances

Answer 10

-Measure project performance against scope, schedule and cost baseline

Planned value (PV) - Estimate the work planned
Earned value (EV) - Estimate the work actually accomplished
Actual cost (AC) - Actual cost incurred

Schedule variance (SV) SV=EV-PV

SV <0 Behind schedule
SV= 0 on track
SV>0 ahead schedule

Cost variance (CV) CV=EV-AC
CV <0 Over budget
CV= 0 on track
CV>0 under budget

Schedule performance index (SPI) - Measure of schedule efficiency
SPI<1 Behind schedule
SPI= 1 on track
SPI>1 ahead schedule

Cost performance index (CPI) - Measure of cost efficiency
CPI <1 Over budget
CPI= 1 on track
CPI>1 under budget

CPI=EV/AC ( Est. work actually done / actual cost)

Question 11

Control costs (Monitoring & Controlling) 4th
Earned value management (EVM) - Forecasting

Answer 11

Budget at completion (BAC) - sum of all budgets established for the work to be performed

Estimate at completion (EAC) - expected total cost of completing all work