Project Cost Management (3)

Question 1

What are the processes in the project cost management knowledge area?

Answer 1

Plan cost management, estimate costs, determine budget, and control consts

Question 2

What is the concept of earned schedule?

Answer 2

Emerging trend that uses earned schedule - actual time to calculate schedule variance. Indicates efficiency

Question 3

What are tailoring considerations for project cost management?

Answer 3

Knowledge management, estimating and budgeting, earned value management, agile approach, and governance

Question 4

What is a cost baseline?

Answer 4

Approved version of time-phased project budget, excluding management reserves. Can be changed only with formal change control

Question 5

What are the input for the plan cost management process?

Answer 5

Project charter, PMP (schedule MP, risk MP), EEFs (culture, market, currency exchange rates, PMIS), OPAs

Question 6

What are the tools used for the plan cost management process?

Answer 6

Expert judgement, data analysis (alternative), meetings

Question 7

What are the outputs of the plan cost management process?

Answer 7

Cost MP

Question 8

What are the inputs for the estimate costs process?

Answer 8

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)

Question 9

What are the tools used for the estimate costs process?

Answer 9

3 point estimating, analogous estimating, parametric estimating, bottom-up estimating, expert judgement, data analysis, decision making, PMIS

Question 10

What is progressive elaboration?

Answer 10

Costs become more clear and estimates more accurate as project goes on

Question 11

What is parametric estimating?

Answer 11

Uses statistical relationship between historical data and other variables (e.g., square footage) to calculate cost estimate (# units x cost per unit)

Question 12

What is bottom-up estimating?

Answer 12

Takes detailed estimates at work package level then rolls up costs to higher level for reporting and tracking

Question 13

What are the outputs of the estimate costs process?

Answer 13

Basis of estimates, cost estimates, project doc updates (assumption log, lessons learned, risks)

Question 14

What are the inputs to the determine budget process?

Answer 14

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)

Question 15

What are the tools used for the determine budget process?

Answer 15

Expert judgement, cost aggregation, data analysis (reserve analysis), historical information review, funding limit reconciliation, financing

Question 16

What are the outputs of the determine budget process?

Answer 16

Cost baseline, project funding requirements, project doc updates (cost estimates, project schedule, risks)

Question 17

How is the cost performance baseline typically displayed?

Answer 17

S-curve

Question 18

What are the inputs for the control costs process?

Answer 18

Project docs (lessons learned), OPAs (policies, tools, methods), PMP (cost MP, cost baseline, performance measurement baselines), work performance data, project funding requirements

Question 19

What are the tools used for the control costs process?

Answer 19

Expert judgement, data analysis (earned value, variance, trend, reserve), PMIS, to-complete performance index

Question 20

What are the outputs of the control costs process?

Answer 20

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

Question 21

What is variance at completion?

Answer 21

Different between budget at completion and what the estimate was

Question 22

What is work performance information?

Answer 22

Information on how project work is performing compared to cost baseline

Question 23

What is budget at completion (WPI)?

Answer 23

Total budget allocated to project

Question 24

What is estimate at completion (WPI)?

Answer 24

Expected total cost of completing all work

Question 25

What is earned value analysis?

Answer 25

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

Question 26

What is complete performance index?

Answer 26

measure of cost efficiecny
CPI = EV/AC
>1 under planned cost
<1 over planned cost

Question 27

How is cost variance calculated?

Answer 27

CV = earned value - actual cost
CV= EV - AC

Question 28

If cost variance is negative is project over or under budget?

Answer 28

Over budget

Question 29

What is planned value (PV)?

Answer 29

Authorized budget assigned to scheduled work

Question 30

What is earned value (EV)?

Answer 30

Sum of planned value of completed work up to that point

Question 31

What is variance at completion?

Answer 31

budget at completion - estimate at completion

Question 32

What is to-complete performance index?

Answer 32

Cost that must be achieved with remaining resources to meet goal
TCPI = (BAC - EV)/(BAC - AC)
>1 harder to complete
<1 easier to complete