Chapter 7 - Cost Flashcards
(18 cards)
What is parametric estimating?
An estimating technique in which an algorithm is used to calculate cost or duration based on historical data and project parameters.
What is bottom-up estimating?
A method of estimating project duration or cost by aggregating the estimates of the lower-level components of the work breakdown structure (WBS)
Which is the correct order for accuracy of estimates? Least accurate to most accurate.
ROM, budget estimates, definitive estimates
Budget estimate, ROM, definitive estimates
Definitive estimates, budget estimates, ROM
ROM, budget estimates, definitive estimates
When is a ROM created? What phase?
Initiating, planning, executing, monitor and control or close?
Initiating
-25% to +75% from actual
When is budget estimates created?
Initiating, planning, executing, monitor and control or close?
Planning
-10% to +25% from actual
When is the definitive estimates created?
Initiating, planning, executing, monitor and control or close?
Later in the project the estimate will become more refined.
-5% to +10% from actual
What is analogous estimating?
A technique for estimating the duration or cost of an activity or a project using historical data from a similar activity or project.
What is earned value?
The measure of work performed expressed in terms of the budget authorized for that work
What is the definition of schedule variance?
A measure of schedule performance expressed as the difference between earned value and plan value.
What is the formula for schedule variance?
EV-PV
What is the formula for cost variance?
EV-AC
What is the formula for schedule performance index?
EV/PV
What is the formula for cost performance index?
EV/AC
If the performance index is = 1.
On plan?
Ahead of plan?
Behind?
Performance index is on plan
If the performance index is > 1
On plan?
Ahead of plan?
Behind?
Performance index is ahead of schedule
Or
Performance is under planned cost
If the performance index is less than 1
Project is behind schedule or
Project is over budget
What is internal rate of return (IRR)?
The rate of return where in PV equals zero
Formula for EAC?
EAC = BAC/CPI
EAC = AC+BAC-EV
