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PMP > Project Cost Management > Flashcards

Project Cost Management Flashcards

1
Q

TCO

A

Total Cost of Ownership

- Considers life cycle cost of the deliverable for the customer

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2
Q

Cost Management Plan

A
  • Addresses how costs are estimated, how project budget is managed and how costs will be controlled
  • Includes information on units of measure, level of precision, level of accuracy, control thresholds, cost estimating approach, rules of performance measurement, reporting formats)
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3
Q

ITTOs: Plan Cost Management

A

Inputs:

  • Project Charter
  • Project Management Plan
  • EEfs
  • OPAs

T&T:

  • Expert Judgement
  • Data Analysis
  • Meetings

Outputs:
- Cost Management Plan

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4
Q

Which subsidiary plans do you need for planning cost management?

A
  • Schedule Management Plan (processes and controls that will impact cost estimation and management)
  • Risk Management Plan (processes and controls that will impact cost estimation and management)
  • EEFs (Culture, market conditions, currency exchange rates, commercial database, etc.)
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5
Q

ITTOs: Estimate Costs

A

Inputs:

  • Project Management Plan
  • Project Documents
  • EEFs
  • OPAs

T&T:

  • Expert Judgement
  • Analagous estimating
  • Parametric estimating
  • Bottom-up estimating
  • Three-point estimating
  • Data Analysis
  • PMIS
  • Decision Making
  • Voting

Outputs:

  • Cost estimates
  • Basis of estimates
  • Project Doc Updates
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6
Q

Direct cost

A
  • attributed only for your project
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7
Q

Indirect cost

A
  • shared to more than one project

- ex. piece of equipment used across other projects

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8
Q

Variable cost

A
  • varies based on conditions in the project

ex. number of meeting participants, travel,

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9
Q

Fixed cost

A
  • constant throughout the project

ex. rented equipment, fixed-price consultant

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10
Q

ROM

A

Rough order of magnitude

-25% to +75% accurate

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11
Q

Budget Estimate

A
  • 10% to +25% accurate

- Based on scope

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12
Q

Definitive Estimate

A

-5% to +10% accurate

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13
Q

Parametric Estimating

A
  • Mathematical model based on known parameters to predict cost
  • ## Cost per unit
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14
Q

Regression Analysis

A
  • statistical approach that predicts what future values may be, based on variables from historical values
  • which factors from historical info matter the most
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15
Q

Learning Curve

A
  • The cost per unit decreases the more units workers complete
  • Workers learn as they complete the required work and perform tasks more quickly
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16
Q

Reserve Analysis

A
  • if risk events start happening, money is being taken out of the reserve
  • sooner that you eat into reserve, the more dangerous it is for the project.
  • goal in risk analysis is to combat early risks
17
Q

Cost of Quality

A
  • Cost needed in order to maintain the needed level of quality
18
Q

What does the project budget exclude?

A
  • Management Reserves

- Includes contingency reserves

19
Q

ITTOs: Determine Budget

A
  • Inputs:
  • Project management plan
  • Project documents
  • Business documents
  • Agreements
  • EEFs
  • OPAs

T&T:

  • Expert Judgement
  • Cost Aggregation
  • Data Analysis
  • Historical Information Review
  • Funding Limit Reconciliation
  • Financing

Outputs:

  • Cost Baseline
  • Project Funding Requirements
  • Project Document Updates
20
Q

Funding Limit Reconciliation

A
  • Reconcile planned and actual costs

- If they don’t match-up, then you have a variance and need to take a corrective action

21
Q

Cost Baseline

A
  • Shows total cost and when those costs will be spent over the project
  • measures performance
  • usually shown as an S curve
  • Predicts when the project will be spending monies
  • Discrepancies early show issues
22
Q

Large projects and cost baselines

A
  • Can have multiple, one for each phase

- Predict spending plans

23
Q

Project Funding requirements

A
  • cost baseline used to determine this

- mapped to the schedule

24
Q

Project step funding

A
  • Funding at different points in the project

- based off of first phase get more money to go to second phase

25
Q

ITTOs: Control Costs

A

Inputs:

  • Project Management Plan
  • Project Documents
  • Project Funding requirements
  • WPD
  • OPA

T&T:

  • Expert judgement
  • Data Analysis
  • To-Complete Performance Index
  • PMIS

Outputs:

  • WPI
  • Cost forecasts
  • Change Requests
  • Project Management Plan Updates
  • Project Document Updates
26
Q

Earned Value Management

A
  • EV (Earned Value) = % Complete X BAC
  • PV (Planned Value) = %Planned X BAC

EV-AC (Actual cost) = Cost Variance

EV-PV = Schedule Variance

27
Q

BAC

A

Budget at Completion

28
Q

Cost Performance Index

A

EV/AC

Closer to 1, better the cost performance

29
Q

Estimate at Completion (EAC)

A

BAC/CPI

30
Q

ETC

A

Estimte to Completion

- How much more do you need to get to completion

31
Q

EAC: Current Cost Performance

A
  • Future work at planned costs
  • Trying to forecast final project cost based off of current performance (predicting the future)

AC + (BAC - EV)

32
Q

Value Engineering

A
  • Systematic approach to find less costly ways to complete the same work
33
Q

Opportunity Cost

A
  • The worth of a project that wasn’t completed or chosen

PMP (9 decks)

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