Instructing.org Flashcards
Cost Management
What is Actual cost (AC)?
AC is key component in Earned Value Management
The actual amount of monies the project has spent to date.
Cost Management
What is Analogous estimating?
An approach that relies on historical information to predict the cost of the current project. It is also known as top-down estimating and is the least reliable of all the cost-estimating approaches.
Cost Management
What is Bottom-up estimating?
An estimating approach that starts from zero, accounts for each component of the WBS, and arrives at a sum for the project. It is completed with the project team and can be one of the most time-consuming and most reliable methods to predict project costs.
Cost Management
What is Budget estimate?
This estimate is also somewhat broad and is used early in the planning processes and also in top-down estimates. The range of variance for the estimate can be from –10 percent to +25 percent.
Cost Management
Commercial database
A cost-estimating approach that uses a database, typically software-driven, to create the cost estimate for a project.
Cost Management
What is Contingency reserve?
A contingency allowance to account for overruns in costs. Contingency allowances are used at the project manager’s discretion and with management’s approval to counteract cost overruns for scheduled activities and risk events.
Cost Management
What is Cost aggregation?
Costs are parallel to each WBS work package. The costs of each work package are aggregated to their corresponding control accounts. Each control account then is aggregated to the sum of the project costs.
Cost Management
What is Cost baseline?
A time-lapse exposure of when the project monies are to be spent in relation to cumulative values of the work completed in the project.
Cost Management
What is Cost budgeting?
The cost aggregation achieved by assigning specific dollar amounts for each of the scheduled activities or, more likely, for each of the work packages in the WBS. Cost budgeting applies the cost estimates over time.
Cost Management
What is the Cost change control system?
A system that examines any changes associated with scope changes, the cost of materials, and the cost of any other resources, and the associated impact on the overall project cost.
Cost Management
What’s the purpose of a Cost management plan?
The cost management plan dictates how cost variances will be managed
Cost Management
What is Cost of poor quality?
The monies spent to recover from not adhering to the expected level of quality. Examples may include rework, defect repair, loss of life or limb because safety precautions were not taken, loss of sales, and loss of customers. This is also known as the cost of nonconformance to quality.
Cost Management
What is Cost of quality?
The monies spent to attain the expected level of quality within a project. Examples include training, testing, and safety precautions.
Cost Management
What does Cost performance index (CPI) do?
Measures the project based on its financial performance.
The formula is CPI = EV/AC.
Cost Management
What is Cost variance (CV)?
The difference of the earned value amount and the cumulative actual costs of the project.
The formula is CV = EV – AC.
Cost Management
What are Definitive estimate?
- This estimate type is one of the most accurate. It’s used late in the planning processes and is associated with bottom-up estimating.
- You need the WBS in order to create the definitive estimate.
- The range of variance for the estimate can be from –5 percent to +10 percent.
Cost Management
What are Direct costs?
Costs are attributed directly to the project work and cannot be shared among projects (for example, airfare, hotels, long-distance phone charges, and so on).
Cost Management
What is Earned value (EV)?
Earned value is the physical work completed to date and the authorized budget for that work. It is the percentage of the BAC that represents the actual work completed in the project.
Cost Management
What is Estimate at completion (EAC)?
These forecasting formulas predict the likely completed costs of the project based on current scenarios within the project.
Cost Management
What is Estimate to complete (ETC)?
An earned value management formula that predicts how much funding the project will require to be completed. Three variations of this formula are based on conditions the project may be experiencing.
Cost Management
What are Fixed costs?
Costs that remain constant throughout the life of the project (the cost of a piece of rented equipment for the project, the cost of a consultant brought on to the project, and so on).
Cost Management
What is Funding limit reconciliation?
An organization’s approach to managing cash flow against the project deliverables based on a schedule, milestone accomplishment, or data constraints
Cost Management
What are Indirect costs?
Costs that are representative of more than one project (for example, utilities for the performing organization, access to a training room, project management software license, and so on).
Cost Management
What are Known unknown?
An event that will likely happen within the project, but when it will happen and to what degree is unknown. These events, such as delays, are usually risk-related.
Cost Management
What is the Learning curve?
An approach that assumes the cost per unit decreases the more units workers complete, because workers learn as they complete the required work.
Cost Management
Oligopoly
A market condition where the market is so tight that the actions of one vendor affect the actions of all the others.
Cost Management
Opportunity cost
The total cost of the opportunity that is refused to realize an opposing opportunity.
Cost Management
Parametric estimating
An approach using a parametric model to extrapolate what costs will be needed for a project (for example, cost per hour and cost per unit). It can include variables and points based on conditions.
Cost Management
Planned value (PV)
Planned value is the work scheduled and the budget authorized to accomplish that work. It is the percentage of the BAC that reflects where the project should be at this point in time.
Cost Management
Project variance
- The final variance, which is discovered only at the project’s completion.
- The formula is VAR = BAC – AC.
Cost Management
Regression analysis
This is a statistical approach to predicting what future values may be, based on historical values. Regression analysis creates quantitative predictions based on variables within one value to predict variables in another. This form of estimating relies solely on pure statistical math to reveal relationships between variables and to predict future values.
Cost Management
Rough order of magnitude
- This rough estimate is used during the initiating processes and in top-down estimates.
- The range of variance for the estimate can be from –25 percent to +75 percent.
Cost Management
Schedule performance index (SPI)
- Measures the project based on its schedule performance.
- The formula is SPI = EV/PV
Cost Management
Schedule variance (SV)
- The difference between the earned value and the planned value.
- The formulas is SV = EV – PV.
Cost Management
Single source
Many vendors can provide what your project needs to purchase, but you prefer to work with a specific vendor
Cost Management
Sole source
Only one vendor can provide what your project needs to purchase. Examples include a specific consultant, specialized service, or unique type of material.
Cost Management
Sunk costs
Monies that have already been invested in a project.
Cost Management
To-Complete Performance Index
A formula to forecast the likelihood of a project to achieve its goals based on what’s happening in the project right now. There are two different flavors for the TCPI, depending on what you want to accomplish. If you want to see if your project can meet the budget at completion, you’ll use this formula: TCPI = (BAC – EV)/(BAC – AC). If you want to see if your project can meet the newly created estimate at completion, you’ll use this version of the formula: TCPI = (BAC – EV)/(EAC – AC).
Cost Management
Variable costs
Costs that change based on the conditions applied in the project (the number of meeting participants, the supply of and demand for materials, and so on).
Cost Management
Variance
The difference between what was expected and what was experienced
Cost Management
Variance at completion (VAC)
- A forecasting formula that predicts how much of a variance the project will likely have based on current conditions within the project.
- The formula is VAC = BAC – EAC.
Communications Management
Acknowledgment
The receiver signals that the message has been received. An acknowledgment shows receipt of the message, but not necessarily agreement with the message.
Communications Management
Active listening
The receiver confirms that the message is being received through feedback, questions, prompts for clarity, and other signs of confirmation
Communications Management
Choice of media
The best modality to use when communicating that is relevant to the information being communicated.
Communications Management
Communication assumptions
Anything that the project management team believes to be true but hasn’t proven to be true. For example, the project management team may assume that all of the project team can be reached via cell phone, but parts of the world, as of this writing, don’t have a cell signal.
Communications Management
Communication barrier
Anything that prohibits communication from occurring.
Communications Management
Communication channels formula
N(N – 1)/2, where N represents the number of identified stakeholders. This formula reveals the total number of communication channels within a project.
Communications Management
Communication constraints
Anything that limits the project management team’s options. When it comes to communication constraints, geographical locales, incompatible communications software, and even limited communications technology can constrain the project team.
Communications Management
Communications management plan
A project management subsidiary plan that defines the stakeholders who need specific information, the person who will supply the information, the schedule for the information to be supplied, and the approved modality to provide the information.
Communications Management
Decoder
The device that decodes a message as it is being received.
Communications Management
Effective listening
The receiver is involved in the listening experience by paying attention to visual cues from the speaker and paralingual characteristics, and by asking relevant questions.
Communications Management
Encoder
The device that encodes the message being sent.
Communications Management
Feedback
The sender confirms that the receiver understands the message by directly asking for a response, questions for clarification, or other confirmation.
Communications Management
Influence/impact grid
Stakeholders are mapped on a grid based on their influence over the project in relation to their influence over the project execution.
Communications Management
Information presentation tools
A software package that allows the project management team to present the project’s health through graphics, spreadsheets, and text. (Think of Microsoft Project.)
Communications Management
Information retrieval system
A system to quickly and effectively store, archive, and access project information.
Communications Management
Interactive communication
This is the most common and most effective approach to communication. It’s where two or more people exchange information. Consider status meetings, ad-hoc meetings, phone calls, and videoconferences.
Communications Management
Lessons learned
This is documentation of what did and did not work in the project implementation. Lessons learned documentation is created throughout the project by the entire project team. When lessons learned sessions are completed, they’re available to be used and applied by the entire organization. They are now part of the organizational process assets.
Communications Management
Medium
The device or technology that transports a message.
Communications Management
Noise
Anything that interferes with or disrupts a message.
Communications Management
Nonverbal
Facial expressions, hand gestures, and body language are nonverbal cues that contribute to a message. Approximately 55 percent of communication is nonverbal.
Communications Management
Paralingual
The pitch, tone, and inflections in the sender’s voice affecting the message being sent.
Communications Management
Performance report
A report that depicts how well a project is performing. Often, the performance report is based on earned value management and may include cost or schedule variance reports.
Communications Management
Project presentations
Presentations are useful in providing information to customers, management, the project team, and other stakeholders.
Communications Management
Project records
All the business of the project communications is also part of the organizational process assets. This includes e-mails, memos, letters, and faxes.
Communications Management
Project reports
Reports are formal communications on project activities, their status, and conditions.
Communications Management
Pull communication
This approach pulls the information from a central repository, like a database of information. Pull communications are good for large groups of stakeholders who want to access project information at their discretion. Consider a project web site where stakeholders can periodically drop by for a quick update on the project status.
Communications Management
Push communication
This approach pushes the information from the sender to the receiver without any real acknowledgment that the information was really received or understood. Consider letters, faxes, voicemail messages, e-mails, and other communications modalities that the sender packages and sends to receivers through some intermediary network.
Communications Management
Receiver
The person who receives the message.
Communications Management
Sender
The person who is sending the message.
Communications Management
Sender–receiver models
Feedback loops and barriers to communications
Communications Management
Stakeholder notifications
Notices to the stakeholders about resolved issues, approved changes, and the overall health of the project.
Communications Management
Status review meeting
A regularly scheduled meeting to discuss the status of the project and its progress toward completing the project scope statement.
Communications Management
Time reporting system
A system to record the actual time to complete project activities.
