Cost Planning and Tracking Flashcards
What is the Critical Chain?
The sequence of both precedence-dependent and resource-dependent activities that prevents a project from being completed in a shorter time, given finite resources.
What is Critical Chain Project Management (CCPM)?
A method of planning and managing projects that emphasizes the resources required to execute the project.
What are the key processes of Project Cost Management according to PMBOK?
- 7.1 Plan Cost Management
- 7.2 Estimating Costs
- 7.3 Determine Budget
- 7.4 Control Costs
What is the first step in creating a project budget?
Develop detailed estimates for all project costs.
What is a Rough Order of Magnitude (ROM) estimate?
A preliminary estimate used to provide a ballpark figure for project costs.
What is a Bottom-Up Estimate?
The most accurate estimate, based on each activity in the schedule, labor, and cost.
What is the Darnall-Preston Complexity Index (DPCI)?
A complexity structure used in estimating project costs.
What are the components of a Cost Baseline?
A time-phased budget that includes planned costs over time.
What is the purpose of a Cost Plan?
To include a cost estimate and a Cost Baseline for project financial management.
What does ‘Contingency’ refer to in project costing?
An allowance added to cover future changes due to unforeseen conditions.
Define Direct Cost.
An item of cost that may be specifically associated with the project, such as equipment, labor, or materials.
Define Indirect Cost.
Labor services or supplies not directly linked to the project, accrued and added as overhead.
What is the range of accuracy for Order of Magnitude estimates?
Low accuracy (-25 to +75% typical).
What is the typical accuracy of Budget Estimates?
Highest accuracy (5-15% typical).
What is the purpose of Vendor Bid Analysis in budget planning?
To analyze costs from consultants and other vendors for project budgeting.
What should budgets reflect?
The needs of the organization’s strategy and goals.
What is Parkinson’s Law in project management?
The tendency for work to expand to fill the time available for its completion.
What is the purpose of Cost Estimating Relationships (CERs)?
To provide estimating algorithms or formulas that process project information.
What is the significance of maintaining supporting estimate information?
To refine the Rough Order of Magnitude estimates.
What is the role of the cost planner?
To develop and manage the project cost plan.
Fill in the blank: The process of tracking projects is done _______.
1X month
True or False: Critical Chain Project Management emphasizes task order and rigid scheduling.
False
What is the typical cost of a budget estimate as a percentage of project cost?
Costs about 0.15-0.6% of project cost.
What is the difference between Direct Costs and Indirect Costs?
Direct costs are specifically associated with the project, while indirect costs are not directly linked and are added as overhead.
What are some important considerations in cost planning?
- Know your customer
- Follow the process
- Document everything
- Leave an audit trail
- Get buy-in
What is the accuracy range for Intermediate estimates?
Mid-level accuracy (-15 to +30% typical).
