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PMP > Cost Mgmt > Flashcards

Cost Mgmt Flashcards

1
Q

Earned Value

A

How much work has been completed as of today

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2
Q

Budget at Completion

A

What is the total budget for the project

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3
Q

Variance at Completion

A

How much do we expect to vary from the BAC (VAC=BAC-EAC)

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4
Q

Estimate to Complete

A

How much more (or less) do we need to spend over what we already have

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5
Q

Actual Cost

A

How much have we spent for the work completed

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6
Q

How much work was scheduled to be completed as of today

A

What is Planned Value

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7
Q

What is cost variance

A

The difference between the value of the work completed (EV) and the Actual Cost

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8
Q

Planned Value

A

How much work was scheduled to be completed today

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9
Q

“the difference between the the work completed and the work planned”

A

What is schedule variance

SV=EV - PV

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10
Q

The difference between the work completed and the the actual costs

A

What is cost variance

CV=EV - AC

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11
Q

Ratio of Earned Value to Actual Costs

Cost Efficiency

A

What is Cost Performance Index

CPI=EV/AC

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12
Q

What is Schedule Performance Index

A

Schedule efficiency
Ratio of value of the work completed to the The work scheduled to have been completed
SV=EV/PV

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13
Q

Budget Planned - Estimated Cost to complete

A

What is Variance at completion

VAC = BAC - EAC

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14
Q

Estimate at Completion

A 
Expected Cost
if Staying the Course: EAC = BAC/CPI
If righting the Ship: AC - (BAC - EV)
If dependent on CPI and SPI:
EAC = (BAC-EV)/SPI*CPI
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15
Q

Estimate to Complete

A

The expected cost to finish the remaining work

ETC = EAC - AC

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16
Q

The ratio of the cost to finish the work, to the remaining budget where remaining budget can be the planned cost (BAC) or the Estimated Cost to complete the project (EAC)

A

What is TCPI

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17
Q

a measure of the cost performance that must be achieved with remaining resources

A

What is TCPI

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18
Q

a measure of the efficiency that must be maintained in order to complete the project

A

What is TCPI

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19
Q

What does a CPI < 1.0 tell us

A

Project over cost

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20
Q

What does a SPI < 1.0 tell us

A

Project behind schedule

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21
Q

What does a negative value of CV tell us

A

Project over cost

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22
Q

What does a positive value of SV tell us

A

Project ahead of schedule

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23
Q

What does a TCPI less than 1 tell us

A

Project EASIER to complete

Note difference integer value

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24
Q

Units of Measure

A

Agreed to units defined for each resource

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25
Q

The degree to which cost estimates will be rounded

A

What is level of precision

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26
Q

The acceptable range (e.g. +/- 10) used in determining realistic cost estimates

A

What is Level of Accuracy

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27
Q

A quantitative assessment of the likely costs for resources

A

What is a cost estimate

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28
Q

Beta distribution

A

(Optimistic + 4*Most Likely + Pessimistic)/6

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29
Q

The amount within the cost baseline allocated for known-unknown risks

A

What is Contingency reserve

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30
Q

Amount of budget held outside the cost baseline for mgmt control purposes

A

What is Mgmt Reserve

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31
Q

All cost incurred over the life of the product by investing in prophylactic investments to ensure project is in conformance to requirements

A

What is Cost of Quality

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32
Q

Basis of Estimates

A

How do you determine cost estimates–e.g. documentation of known constraints, assumptions made, confidence in final estimate, etc.

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33
Q

Why is the business case a key input to “Determine Budget”

A

It identifies the critical success factors for the project, including financial success factors

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34
Q

Why is the benefits mgmt plan a key document in “Determine Budgets”

A

It includes the target benefits such as present value calculations

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35
Q

The approved version of the time-phased budget, excluding mgmt reserve

A

What is the cost baseline

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36
Q

The summation of control accounts

A

What is the cost baseline

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37
Q

When is Mgmt reserve added in to the budget

A

In calculating the total funds req’d

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38
Q

It contains the data on project status such as which costs have been authorized, incurred, invoiced and paid

A

What is work performance data

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39
Q

Compares the performance measurement baseline to the actual schedule and cost

A

What is Earned Value analysis

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40
Q

How does EVM determine the performance measure baseline

A

Integrates the scope baseline, cost baseline, and schedule baseline

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41
Q

Performance measurement baseline

A

Integrated scope, schedule, and cost baselines used for comparison to manage, measure and control project execution

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42
Q

The total of the planned value

A

Performance measurement baseline

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43
Q

The authorized budget assigned to the SCHEDULED work

A

What is planned value

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44
Q

a measure of work performed expressed in terms of the budget authorized for that work

A

What is Earned Value

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45
Q

The total cost incurred in accomplishing the work that EV measured

A

What is Actual Cost

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46
Q

What term is particularly critical because it indicates the relationship of physical performance to costs spent

A

Cost Variance

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47
Q

Considered the most critical EV metric

A

What is Cost Performance index

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48
Q

Calculating the EAC that may differ from the BAC based on project performance

A

What is Forecasting

49
Q

What does the PMIS measure

A

Monitor the 3 EVM dimensions

50
Q

Contingency Reserves

A

Known-unknowns

Part of the project baseline

51
Q

Mgmt Reserve

A

Unknown-unknowns

Not in cost baseline but are part of overall project budget

52
Q

The value of the control accounts = contingency reserve plus…

A

work package cost estimates

53
Q

Risk register

A

responses to opportunities and threats may have a cost to the project

54
Q

Determine budget may aggregate individual activities or

A

work packages

55
Q

Why is work performance data an an input to control costs

A

Data (actuals) on what is occurring related to the costs

56
Q

When is the cost baseline created

A

“Determine budget”

57
Q

When is the cost baseline updated?

A

“Control Costs”

58
Q

Schedule forecasts are based on 1) planned performance or 2) actual performance

A

2) Actual performance

59
Q

Tools and Techniques of Control Costs

A

EVM
Forecasting (EAC and ETC)
TCPI

60
Q

Shows a comparison of actual data with the cost baseline

A

What is Work Performance Information

61
Q

What is an expected output of “Control Costs”

A

Change Requests

62
Q

What does a negative cost variance indicate

A

Over budget

63
Q

What does a positive schedule variance indicate

A

Ahead of schedule

64
Q

What does a integer value for cost performance index > 1 indicate?

A

Under budget

65
Q

What does a integer value for schedule performance index < 1 indicate?

A

Behind Schedule

66
Q

Specific percentage of the PV is assigned to the start of a work package/activity and the remaining at junctures

A

What is Fixed Formula

67
Q

Activity get 0% when it starts and 100% when it completes

A

What is the 0/100 rule

68
Q

Breaks execution into milestones and a percentage of PV is paid at the milestone per the agree to %

A

What is a weighted milestone

69
Q

At the end of each time period, the % complete of the work package is multiplied by the BAC

A

What is “Percent Complete”

70
Q

Relates to the amount of work actually completed

A

What is “Physical measurement”

71
Q

If the question provides you QUANTITATIVE information, focus on that

A

If given a scenario, e,g, CPI = .98 and 8 weeks behind schedule, focus on the .98. (You don’t know what the schedule delta is compared to the actual length of the schedule)

72
Q

What does a TCPI < 1.0 indicate

A

EASIER to complete (smaller # is GOOD here), opposite CPI and SPI

73
Q

The cost baseline is an input to which process

A

Control Costs

74
Q

EVA is a Tool and technique of what process

A

Control Costs

75
Q

Project funding rqmts are an

A

Input to Control Costs

76
Q

Project Funding Rqmts are an

A

Output of determine budget

77
Q

Read the question!

A

Are they asking for a variance or an index

78
Q

cost/schedule indices

A

< 1.0: behind/over (BAD!)

79
Q

TCPI index

A

< 1.0 easier to complete (GOOD!)

80
Q

If a CPI is 1.2; what does this mean

A

It is costing $1.20 to complete $1.00 worth of work.

81
Q

0/100

A

The Rule associated with equipment deliveries

82
Q

Cost of a subcontractor working on the project

A

A direct cost (??)

83
Q

Defining how the project costs will be estimated, budgeted, managed, monitored and controlled

A

What is “Plan Cost Mgmt”

84
Q

Developing an approximation of the monetary resources needed to complete the project work

A

What is “Estimate Costs”

85
Q

Monitoring the status of the project to update the project costs and manage changes to the cost baseline

A

What is “Control Costs”

86
Q

Aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline

A

What is “Determine Budget”

87
Q

How Many sub-processes are in “Project Cost Management”

A

4

Plan Cost Mgmt
Estimate Costs
Determine Budget
Control Costs

88
Q

The WBS component used for the project cost accounting

A

What is the control account

89
Q

Why is the charter an input to “Plan Cost Mgmt”?

A

Provides the pre-approved financial resources

90
Q

What is the key output of “Plan Cost Mgmt”

A

Cost Mgmt Plan

91
Q

What are the key outputs of “Estimate Costs”

A

Cost Estimates

Basis of estimates

92
Q

What are the key inputs to “Estimate Costs”

A

Cost Mgmt Plan

Scope Baseline

93
Q

Why is the scope baseline an input to “Estimate Costs”

A

Scope Statement has info on funding constraints

WBS provides relationships among deliverables

WBS Dictionary identifies the work in each deliverable

94
Q

What are some of the Tools and Techniques of “Estimate Costs”

A 
Analogous estimating
parametric estimating
bottom-up estimating
reserve analysis
Cost of Quality
PMIS
95
Q

What are the key inputs of “Determine Budget”

A
  • Cost Mgmt Plan
  • Resource Mgmt Plan
  • Business Documents
  • Business Case
  • Benefits Mgmt Plan
  • Scope Baseline
  • Basis of Estimates
96
Q

Why is the “Business Case” an input to “Determine Budget”

A

Identifies the financial success factors

97
Q

Why is the “Benefits Mgmt Plan” and input to “Determine Budget”

A

It includes target benefits, such as net present value calculations

98
Q

Cost estimates are WHAT? by work packages in accordance with WBS.

A

Aggregated

99
Q

A variance between the funding limits and planned expenditures which may necessitate rescheduling work

A

What is “Funding Limit Reconciliation”

100
Q

Key outputs of “Determine Budget”

A

Cost Baseline

101
Q

Key input to “Control Costs”

A

Work Performance Data

e.g. which costs have been authorized, incurred, invoiced, and paid.

102
Q

Key Tools and Techniques for “Control Budget”

A

Earned Value Analysis
Variance Analysis (SV, CV, SPI, CPI)
Trend Analysis
Forecasting (EAC, ETC, etc.)

103
Q

Compares the performance measurements baseline to the actual schedule and cost performance

A

What is Earned Value Analysis

104
Q

What comprises the Performance Measurement Baseline

A

Integration of the scope, cost, and schedule baselines through EVM

105
Q

What are the three components EVM monitors at the work package and control account level

A

EV, PV, AC

106
Q

What is a key output of “Control Costs”

A

Work Performance Information (e.g. how project costs are performing in relation to cost baseline”

107
Q

What does an SPI of 1.3 mean

A

The project is progressing at 130% of the rate expected.

108
Q

What does An SPI of 0.82 mean

A

the project is progressing at 82% of the rate expected

109
Q

What does a value < 1 mean for CPI and SPI

A

Project is under performing

Go back to equations!

110
Q

What does a value < 0 mean for SV and CV

A

Project is under performing

Go back to equations!

111
Q

What does a CPI and SPI > 1 mean

A

Project is over performing

Go back to equations!

112
Q

What does a CV and SV > 0 mean

A

Project is over performing

Go back to equations!

113
Q

A distinct, scheduled portion of work performed during the course of a project

A

What is an activity

114
Q

The work defined at the lowest level of the work breakdown structure for which cost and duration are estimated and managed

A

What is a work package

115
Q

the element in PDM (i.e. network diagrams

A

What is an activity

116
Q

What is the difference btwn an activity and a work package

A

An activity describes the work in the work package

117
Q

What does an SPI of 0.82 mean

A

The project is progressing at 82% of the work expected

118
Q

A CPI of 0.8 means

A

For every $ we spend, we are only getting 80 cents on the dollar

PMP (16 decks)

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