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PM TERMS > Cost Management > Flashcards

Cost Management Flashcards

1
Q

Plan Cost Management PROCESS

A

Defines how the team will manage the money
Defining the rules which are used to manage project costs

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2
Q

Estimate Costs PROCESS

A

It is an inquiry into how much it
will cost to have the specified resources complete the
desired tasks or activities necessary to produce the
specified work packages

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3
Q

Determine Budget PROCESS

A

Aggregating the cost estimates into a single project budget, but then spreading over time to generate the cost baseline

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4
Q

Control Cost PROCESS

A

Keeping the project on budget
Comparing Planned work (PM Plan) against actual work (Work Performance data)

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5
Q

Cost Management

A

Main goal is to create the cost baseline(Project budget) and ensuring the project stays on budget

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6
Q

Life Cycle Costing

A

Product or service is examined to determine the cost of the project and cost associated with operating and disposing

after the project cost

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7
Q

Opportunity Cost

A

Determined by the values of the next highest alternative

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8
Q

Sunk Cost

A

Monies that have been already spent

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9
Q

Value Analysis or Value Engineering

A

Find a less costly way to do the same work

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10
Q

Enterprise Environmental Factors

A

A cost Input
Items such as org culture and structure, resource availability and skills, and commercial info.

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11
Q

Are price and cost the same thing?

A

No
Price is = to cost +Profit

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12
Q

Organizational Process Assets

A

Any policies, procedures, and or templates you might have that would aid in the costing of the project

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13
Q

CQQ

A

Cost of Quality

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14
Q

Cost Baseline

A

Basis of cost Comparison for the rest of the project

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15
Q

Parametric Estimating

A

Often referred to as mathematical modeling
Uses a series of variables to calculate project estimate
As long as all of the major variables have been addressed, the estimate will be accurate.

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16
Q

Bottom Up Estimating

A

Provides the most accurate estimates
PM Starts at 0, the bottom, and accounts for each cost within the project

17
Q

Rough Order of Magnitude

A

The rough order of magnitude is the least accurate approach, since it may vary from -25 percent to +75 percent.

18
Q

Reserve analysis

A

the process of determining how much reserve is
required.

19
Q

Alternatives analysis

A

examining the potential
different ways the team could execute the project and then calculating
the different durations to find the best outcome.

20
Q

Contingency Reserves

A

These represent reserves
controlled by the project manager and they are to be used for
know unknowns. This means the project manager and team
can plan for an event that they see as possible

21
Q

Management Reserves

A

These represent reserves
controlled by the project sponsor or the senior management.
They cannot be accessed without their permission.
Management reserves are used to respond to unknown
unknowns. These are events that cannot be planned for

22
Q

cost aggregation

A

rolling up activity cost into work packages and then work packages into deliverables
Knowing cost of deliverables will give u cost of the entire project

23
Q

Historical Information Review

A

a form of parametric estimating

Ex:using data from similar previous projects to estimate costs for this project

24
Q

Funding Limit Reconcilation

A

When org limits funding because of year end budgets

25
Q

Cost Baseline AKA BAC(Budget as completion)

A

Cost of the project
Includes all cost of the deliverables
This is included in Project Mgmt Plan
Will be used to measure the performance of the proj

26
Q

Project Funding Requirements

A

States how and when the project will be funded
Might also state how much is needed every quarter

27
Q

TO COMPLETE PERFORMANCE INDEX - TCPI

A

How we measure the level of work that needs to be done to finish the project within budget

28
Q

Cost Forecast

A

How much the project should cost at the end
Based on rate of spending now

29
Q

Schedule Variance

A

Difference between the amount of work that should be done and what was actually done

SC=EV-PV

30
Q

Schedule Performance Index (SPI)

A

1 or above means you are ahead of schedule

31
Q

Cost Performance Index (CPI)

A

Earned Value (EV) / (AC) Actual Cost
Rate of how we are spending to what we are actually earning on the project

32
Q

Estimate at Completion (EAC)

A

Forecasting the total cost of the project at the end based on the current spending rate

33
Q

Cost Baseline

A

Includes all of the cost that are aggregated to the work pacakges …Represents project costs including contingency reserves

34
Q

EARNED VALUE (EC)=

A

ACTUAL % COMPLETE * BUDGET AT COMPLETION (BAC)

35
Q

ESTIMATE TO COMPLETION (ETC) =

A

EAC(ESTIMATE AT COMPLETION) -ACTUAL COST AC

36
Q

CPI

A

cpi at 1 and above mean cost is under budget

PM TERMS (14 decks)

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