PMPCh7.1 - Plan Cost Management Flashcards
What is Plan Cost Management
process that establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs
Benefit of Plan Cost Management
provides guidance and direction on how the project costs will be managed throughout the project
Inputs of Plan Cost Management
Project management plan, Project Charter, EEF, OPA
T&T of Plan Cost Management
Expert Judgemnet, Analytical Techniques, Meetings
Output of Plan Cost Management
Cost Management Plan
Insert ITTO 7.1
Plan Cost Management Input (4): PM Plan
Info used to develop cost mgmt plan: scope baseline (project scope stmt, WBS detail for cost estimate), schedule baseline, other info like cost-related scheduling, risk, communications decisions
Plan Cost Management Input(4): Project Charter
summary budget from which the detailed project costs are developed
Plan Cost Management Input(4): EEF
culture/structure influence cost mgmt, market conditions for what products are available in mkt, currency exchange rates, published commercial info like resource cost rate info, PMIS which gives alternative possibilities for managing costs
Plan Cost Management Input(4): OPA
finance control procedures like time reporting, financial review, contract provisions; lessons learned, historical info, financial db, formal informal cost estimating/budgeting-related policies
Plan Cost Management T&T(3): Expert Judgement
provides valuable insight about the environment and information from prior similar projects
Plan Cost Management T&T(3): Analystical Techniques
choosing strategic options to fund project like self-funding, funding with equity, with debt. Details ways to finance project resources like making, purchasing, renting, or leasing. Choosing what techniques to use - payback period, ROI, IRR, NPV etc
Plan Cost Management T&T(3): Meetings
meetings to develop the cost management plan
Plan Cost Management Output(1): Cost Mgmt Plan
a component of the project management plan, describes how the project costs will be planned, structured, and controlled. Discuss Units of measure; Level of precision; Level of accuracy; Organizational procedures links - WBS CONTROL ACCOUNT; control thressholds - agreed amnt of variation to be allowed before some action needs to be taken (% deviation from baseline plan); rules of performance measurement - EVM rules, for ex: where in WBs measurement of control accounts will be performed, agree on EVM techniques, specify tracking methodologies and EVM equations for calculating project estimate at completion forecasts to provide validity check; reporting formats and frequency; process description; additional details like strategic funding choice, procedure to acct for fluctuation in exchange rates
Plan Cost Management Output(1): Cost Mgmt Plan - Control accounts
The WBS component used for the project cost accounting is called the control account. Each control account is assigned a unique code or account number(s) that links directly to the performing organization’s accounting system.
