PMPCh7.3 - Determine Budget Flashcards
ITTO
Answer
What is 7.3 Determine Budget
process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline
key benefit of 7.3 Determine Budget
determines the cost baseline against which project performance can be monitored and controlled
Insert 7.3 ITTO
Memory 7.3 Determine Budget: Input
RAPS COBRA
Memory 7.3 Determine Budget: TT
CHEF Ramsey
Memory 7.3 Determine Budget: O
1 Potato 2 Potato C?
Input of Determine Budget (9)RAPS COBRA:
Risk Register, Activity Cost Estimate, Project Schedule, Scope baseline, Cost mgmt plan, OPA, Basis of estimates, Resource Calendar, Agreements
TT of Determine Budget (4) CHEF R:
Cost aggregation, Historical relationships, Expert judgement, Funding limit reconciliation, Reserve analysis
Output of Determine Budget (3): P, P, C
Project funding requirements, project doc updates, cost baseline
What does a project budget contain
budget includes all the funds authorized to execute the project
What is a cost baseline
approved version of the time-phased project budget, but excludes management reserves
Input of Estimate Costs (9)RAPS COBRA: Cost Management Plan
describes how the project costs will be managed and controlled.
Input of Estimate Costs (9)RAPS COBRA: Scope Baseline
Project Scope Statement, WBS, WBS Dictionary. Scope Stmt: formal limits on expenditure of project funds mandated by org, agreement, govt. Funding constraints are in scope stmt. WBS - relationship among deliverables and components. Dictionary: identify deliverables, description of work in each WBS component required to produce each deliverable.
Input of Estimate Costs (9)RAPS COBRA: Activity Cost Estimates
Cost estimates for each activity within a work package are aggregated to obtain a cost estimate for each work package.
Input of Estimate Costs (9)RAPS COBRA: Basis of Estimates
Supporting detail that specifies any basic assumptions dealing with the inclusion or exclusion of indirect or other costs in the project budget.
Input of Estimate Costs (9)RAPS COBRA: Project Schedule
includes planned start and finish dates for the project’s activities, milestones, work packages, and control accounts. This information can be used to aggregate costs to the calendar periods
Input of Estimate Costs (9)RAPS COBRA: Resource Calendars
includes planned start and finish dates for the project’s activities, milestones, work packages, and control accounts. This information can be used to aggregate costs to the calendar periods
Input of Estimate Costs (9)RAPS COBRA: Risk Register
Used to consider how to aggregate the risk response costs.
Input of Estimate Costs (9)RAPS COBRA: Agreements
Applicable agreement information and costs relating to products, services, or results
Input of Estimate Costs (9)RAPS COBRA: OPA
Existing formal and informal cost budgeting-related policies, procedures, and guidelines; Cost budgeting tools; and Reporting methods
TTof Estimate Costs (5)CHEF R: Cost Aggregation
Cost estimates are aggregated by work packages in accordance with the WBS. Then aggregated Cost estimates are aggregated by work packages in accordance with the WBS
TTof Estimate Costs (5)CHEF R: Reserve Analysis
establishes contingency reserves and management reserves for the project
TTof Estimate Costs (5)CHEF R: Expert Judgment
helps to determine budget. Includes stakeholders, customers, prof/tech associations, industry groups, other units within performing organization
TTof Estimate Costs (5)CHEF R: Historical Relationships
parametric estimates or analogous estimates involve the use of project characteristics (parameters) to develop mathematical models to predict total project costs. Most reliable when historical info accurate, parameters used are readily quantifiable, models are scalable (large, small, phase of project)
TTof Estimate Costs (5)CHEF R: Funding Limit Reconciliation
expenditure of funds should be reconciled with any funding limits on the commitment of funds for the project. A variance between the funding limits and the planned expenditures will sometimes necessitate the rescheduling of work to level out the rate of expenditures. This is accomplished by placing imposed date constraints for work into the project schedule.
Outputs of Estimate Costs (3): Cost Baseline
approved version of the time-phased project budget, excluding any management reserves, which can only be changed through formal change control procedures and is used as a basis for comparison to actual results
Cost Baseline components - how they work
Activity cost estimates for the various project activities along with any contingency reserves for these activities are aggregated into their associated work package costs. WPC get added to contingency reserves for work packages into Control accounts. Control accounts get summed into the baseline. Enables time phased view of cost baseline; S curve. Baseline + management reserves = project budget
Add figure 7-8 showing how Cost Baseline Components relate to Project Budget
Add figure 7-8 showing how Cost Baseline Components relate to Project Budget
What are the 3 types of reserves
Activity contingency reserve, work package contingency reserve, cost baseline mgmt contingency reserve
Outputs of Estimate Costs (3): Project Funding Reqt
Total funding requirements and periodic funding requirements (e.g., quarterly, annually) are derived from the cost baseline. Cost baseline will include projected expenditures plus anticipated liabilities. Funding occurs in increments. Total funds = cost baseline + mgmt reserves
Outputs of Estimate Costs (3): Project Doc Updates
Includes Risk register,Activity cost estimates, and Project schedule.
