Project Cost Management (3) Flashcards
What are the processes in the project cost management knowledge area?
Plan cost management, estimate costs, determine budget, and control consts
What is the concept of earned schedule?
Emerging trend that uses earned schedule - actual time to calculate schedule variance. Indicates efficiency
What are tailoring considerations for project cost management?
Knowledge management, estimating and budgeting, earned value management, agile approach, and governance
What is a cost baseline?
Approved version of time-phased project budget, excluding management reserves. Can be changed only with formal change control
What are the input for the plan cost management process?
Project charter, PMP (schedule MP, risk MP), EEFs (culture, market, currency exchange rates, PMIS), OPAs
What are the tools used for the plan cost management process?
Expert judgement, data analysis (alternative), meetings
What are the outputs of the plan cost management process?
Cost MP
What are the inputs for the estimate costs process?
PMP (cost MP, quality MP, scope baseline), project docs (lessons learned, project schedule, resources requirements, risks), EEFs (market, exchange rates), OPAs (policies, templates, historical info)
What are the tools used for the estimate costs process?
3 point estimating, analogous estimating, parametric estimating, bottom-up estimating, expert judgement, data analysis, decision making, PMIS
What is progressive elaboration?
Costs become more clear and estimates more accurate as project goes on
What is parametric estimating?
Uses statistical relationship between historical data and other variables (e.g., square footage) to calculate cost estimate (# units x cost per unit)
What is bottom-up estimating?
Takes detailed estimates at work package level then rolls up costs to higher level for reporting and tracking
What are the outputs of the estimate costs process?
Basis of estimates, cost estimates, project doc updates (assumption log, lessons learned, risks)
What are the inputs to the determine budget process?
PMP (cost MP, resource MP, scope baseline), project docs (basis of estimates, cost estimates, project schedule, risk register), business docs (business case, benefits MP), agreements, EEFs (exchange rates), OPAs (policies, historical info, lessons learned, tools and methods)
What are the tools used for the determine budget process?
Expert judgement, cost aggregation, data analysis (reserve analysis), historical information review, funding limit reconciliation, financing
What are the outputs of the determine budget process?
Cost baseline, project funding requirements, project doc updates (cost estimates, project schedule, risks)
How is the cost performance baseline typically displayed?
S-curve
What are the inputs for the control costs process?
Project docs (lessons learned), OPAs (policies, tools, methods), PMP (cost MP, cost baseline, performance measurement baselines), work performance data, project funding requirements
What are the tools used for the control costs process?
Expert judgement, data analysis (earned value, variance, trend, reserve), PMIS, to-complete performance index
What are the outputs of the control costs process?
change requests, PMP updates (cost MP, cost baseline, performance measurement baseline), cost forecasts, project doc updates (assumption log, basis of estimates, cost estimates, risks), work performance information
What is variance at completion?
Different between budget at completion and what the estimate was
What is work performance information?
Information on how project work is performing compared to cost baseline
What is budget at completion (WPI)?
Total budget allocated to project
What is estimate at completion (WPI)?
Expected total cost of completing all work
What is earned value analysis?
Forecast total cost of project
3 key dimensions:
1. planned value = authorized budget
2. earned value = measure of work performed until a specific date
3. actual cost = budget spent until specific date
What is complete performance index?
measure of cost efficiecny
CPI = EV/AC
>1 under planned cost
<1 over planned cost
How is cost variance calculated?
CV = earned value - actual cost CV= EV - AC
If cost variance is negative is project over or under budget?
Over budget
What is planned value (PV)?
Authorized budget assigned to scheduled work
What is earned value (EV)?
Sum of planned value of completed work up to that point
What is variance at completion?
budget at completion - estimate at completion
What is to-complete performance index?
Cost that must be achieved with remaining resources to meet goal
TCPI = (BAC - EV)/(BAC - AC)
>1 harder to complete
<1 easier to complete
