Project Cost Management Flashcards
What does the Project Cost Management process include?
Planning, estimating, budgeting and controlling costs
What is the purpose of the Plan Cost Management process?
The process of defining HOW the project costs will be estimated, budgeted, managed, monitored and controlled
What is the output of the plan cost management process?
Cost management plan
What are the inputs needed for the cost management process?
Project charter, project management plan, environmental enterprise factors, organisation process assets
What are the Tools and Techniques needed to produce a cost management plan?
Expert judgement, data analysis, meetings
What is the outputs from the estimating process?
Cost estimates/Basis of estimates/ updates to assumptions, lessons learned and risk register
What is a ROM?
Rough order of magnitude - this is a rough estimate, this is the equivalent to t-shirt sizing in agile terms.
Usually in initiating phase: -25% to 75% accuracy.
What is a budget estimate?
Usually done in planning phase - -10% to 25% accuracy
How do you work out the (schedule performance index) SPI?
SPI = EV/PV
1 is on schedule, anything above 1 is ahead of schedule, anything below 1 is behind schedule
How do you work out the (cost performance index) CPI?
CPI = EV/AC
1 is on budget, anything above 1 is underspend, anything below 1 is overspend
How do you work out PV?
This is the planned budgeted value for each day/activity
PV = BAC x planned % complete
How do you work out EV?
EV = BAC x actual % complete
How do you work out EAC?
Most common formula i.e. if the CPI is going to remain the same for the remainder of the project use EAC = BAC/CPI i.e. if project budget is £12,000 and your CPI is 0.6 it should be £12,000/0.6 = EAC £20,000
If the planned value is expected to remain the same as initially planned then use…
EAC = AC + (BAC - EV)
If the initial plan is no longer valid then use EAC = AC + bottom up ETC.
If SPI also needs to be taken into consideration then you will need to use EAC = AC + (BAC - EV) /CPIxSPI
How do you work out schedule variance?
EV-PV
How do you work out your cost variance?
EV-AC
How do you work out the ETC?
EAC - AC
What is to-complete performance index (TCPI)?
To obtain the cost performance factor by taking the value of work remaining and dividing it by the value of funds remaining
What does scope baseline include?
Scope statement, WBS and WBS dictionary,
What are the inputs for estimating costs?
Project management plan; Scope baseline, schedule management plan,
Project documents; risk register, resource requirements, lessons learned
EEF
OPA,
What is the purpose of reserve analysis?
Known-unknown
so you know there is going to be issues/rework etc but you don’t know what the issues and rework is going to be
Why would a PM review cumulative cost curves?
To monitor the PV, EV and AC
What are the inputs for determining the budget?
Project management plan; Scope baseline, schedule management plan, cost management plan
Project documents; risk register, resource calendar, cost estimates, basis of cost estimates
EEF
OPA
Agreements
What are the Tools and Techniques of determining the budgeting?
Aggregation (the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.) Expert Judgement, Reserve analysis, Historical relationship, Funding limit reconciliation
When is the cost baseline established?
During the determine budget process.
What does the cost budget include?
Cost baseline + management reserve
What are the outputs from the determining budget process?
Cost baseline, project funding requirements, updates to cost estimates, project schedule and risk register if required.
What is the formula for TCPI?
BAC-EV/BAC-AC or EAC-EV/EAC-AC
