Module 3 Flashcards
What is the purpose of Cost Management in project management?
To plan, estimate, budget, finance, fund, manage, and control costs so that the project can be completed within the approved budget.
What are the key processes involved in Cost Management?
- Plan Cost Management
- Estimate Costs
- Determine Budget
- Control Costs
What is the cost baseline?
The total estimated cost of the project developed by summing estimated costs by period.
What does the Estimate Costs Process entail?
The process of developing an approximation of the monetary resources needed to complete project activities.
Fill in the blank: The __________ is the measure of work performed expressed in terms of the budget authorized for that work.
Earned Value
What is the purpose of the Plan Cost Management Process?
To establish the policies, procedures, and documentation for planning, managing, expending, and controlling project costs.
What are the outputs of the Determine Budget Process?
- Project funding requirements
- Project document updates
- Risk updates
- Cost estimates
- Schedule updates
True or False: Management Reserve is included in the performance measurement baseline.
False
What is Reserve Analysis?
An analytical technique to determine essential features and relationships of components in the project management plan to establish a reserve for schedule duration, budget, estimated cost, or funds.
What are the three major factors of Earned Value Management (EVM)?
- Planned Value (PV)
- Actual Cost (AC)
- Earned Value (EV)
What is the formula for Schedule Variance?
SV = EV - PV
What is the definition of Forecast in project management?
An estimate or prediction of conditions and events in the project’s future based on information and knowledge available at the time of the forecast.
What is Analogous Estimating?
Using information from prior, similar projects to estimate costs.
What does Cost Aggregation involve?
The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
What are the inputs for the Estimate Costs Process?
- Cost management plan
- Scope baseline
- Activity cost estimates
- Basis of estimates
- Project schedule
- Resource calendars
- Risk register
- Agreements
- Organization process assets
What is the primary benefit of the Estimate Costs Process?
To determine the amount of cost required to complete project work.
What is a Contingency Reserve?
Budget within the cost baseline allocated for identified risks that are accepted and for which contingent responses are developed.
What is the difference between Product Life-Cycle Costs and Project Life-Cycle Costs?
- Product life-cycle costs consider all projects supporting the product and may include operational expenses.
- Project life-cycle costs consider all costs of the temporary endeavor (the project).
What is the purpose of the Control Costs Process?
To monitor the status of the project to update project costs and manage changes to the cost baseline.
What are the tools and techniques used in the Plan Cost Management Process?
- Expert judgement
- Analytical techniques
- Meetings
What is the Cost of Quality?
The total cost of ensuring that a project meets quality standards.
What is the formula for Cost Variance?
CV = EV - AC
Fill in the blank: The __________ is the expected total cost of completing all project work.
Estimate at Completion (EAC)
