Cost Management

Question 1

Life Cycle Costing

Answer 1

Looks at entire life of product (including maintenance)

Question 2

Value Analysis

Answer 2

aka Value Engineering

finds least costly way to do the same work (decrease cost while maintaining scope)

Question 3

Inputs: Plan Cost Management

Answer 3

• PM Plan
• Project Charter
• EEFs
• OPAs

Question 4

Outputs: Plan Cost Management

Answer 4

Cost Management Plan

Question 5

Inputs: Estimate Costs

Answer 5

• PM Plan
• Project docs
  
  • Project Schedule
  • Risk Register
  • Lessons Learned Register
  • Resource Requirements
• EEFs
• OPAs

Question 6

Outputs: Estimate Costs

Answer 6

• Cost Estimates
• Basis of Estimates
• Project docs updates

Question 7

Basis of Estimates

Answer 7

doucuments how the estimates were developed and their ranges, including assumptions made and constraints impacting the estimate

Question 8

Components of Cost Management Plan

Answer 8

• levels of accuracy and precision needed for estimates
• approved estimating techniques
• reporting formats
• rules for measuring cost performance
• guidance re: documenting costs & inclusion of directs & indirect costs
• control thresholds
• change control procedures
• information on control accounts, and monitoring spending

Question 9

Estimate Ranges

Answer 9

Rough Order of Magnitude Estimate

Budget Estimate

Definitive Estimate

Question 10

Rough Order of Magnitude Estimate

Answer 10

made during project initiating, range is typically -25 to +75 percent

Question 11

Budget Estimate

Answer 11

made during planning, range of -10 to +25 percent

Question 12

Definitive Estimate

Answer 12

refined through planning process, typically with a range of -5 to +10%

Question 13

Inputs: Determine Budget

Answer 13

• PM Plan
• Project docs
  
  • activity cost estimates
  • basis of estimates
  • project schedule
  • risk register
• Business documents (including business case and benefits mgmt plan)
• Agreements
• EEFs
• OPAs

Question 14

Outputs: Determine Budget

Answer 14

• Cost baseline
• Project funding requirements
• Project docs updates

Question 15

Project Funding Requirements

Answer 15

state how and when the project will be funded

Question 16

Difference between cost baseline and cost budget

Answer 16

Cost Baseline: costs + cotntingency reserves

Cost Budget: Cost baseline + management reserves

Question 17

Cost aggregation

Answer 17

first step in creating budget. activity costs are rolled up into work package costs, then work package costs to control account estimates, then control account estimates to project estimates.

Question 18

Steps in Determine Budget

Answer 18

1. cost aggregation
2. check cash flows to determine schedule impacts
3. reconcile with cost constraints in charter

Question 19

Inputs: Control Costs

Question 20

Cost Baseline

Answer 20

costs to produce all of the deliverables in the project, plust contingency reserves

S-curve accounts for timing with funding

Question 21

Reserve Analysis

Answer 21

part of Control Costs process to determine if contingency reserves are still appropriate (may be increased due to new risks, or reduced due to contemplated risks on completed activities that did not occur)

reminder: any changes require a change request

Question 22

What does the occurance of many unknown risks suggest?

Answer 22

Risk management efforts in planning were inadequate and need to be redone.

Question 23

Use of Management Reserves

Answer 23

applied to unknown risks

requires a change request to move funds to cost baseline

Question 24

Outputs: Control Costs

Answer 24

• Work performance information
• Cost forecasts
• Change requests
• PM Plan updates
• Project docs updates
• OPAs updates

Question 25

Cost Forecast

Answer 25

Forecast of how much project could cost in the end – based on rate of spending now.

Calculated using Estimate at Completion

Question 26

Earned Value Analysis

Answer 26

measures project performance against scope, schedule, and cost baselines