COST MANAGEMENT

Question 1

Plan Cost Management

Answer 1

Establishes guidelines for managing, monitoring, and controlling project costs.

Question 2

Basis of Estimates

Answer 2

Documents details about how cost estimates were made, including assumptions, constraints, and risk considerations.

Question 3

Alternatives Analysis in Cost Management

Answer 3

Used to compare costs of different options (e.g., purchasing vs. renting equipment).

Question 4

Definitive Estimate Range

Answer 4

Most accurate, with a range of -5% to +10%.

Question 5

Accuracy vs. Precision in Cost Estimation

Answer 5

Accuracy is the correctness of the estimate, while precision is the closeness of multiple estimates to each other.

Question 6

Experience and Estimation

Answer 6

Increases both accuracy and precision of cost estimates.

Question 7

Decision-Making Techniques in Estimation

Answer 7

Involves team members in the cost estimation process.

Question 8

Determine Budget Process

Answer 8

Aggregates costs and reserves to establish the project budget.

Question 9

Cost Aggregation

Answer 9

Rolling up costs from activities to work packages.

Question 10

Project Manager’s Role in Cost Baseline

Answer 10

Responsible for monitoring and controlling costs according to the baseline.

Question 11

Project Manager’s Role in Cost Management

Answer 11

Monitoring expenses and identifying cost-saving opportunities.

Question 12

Management Reserves

Answer 12

Cover unpredictable risks and are included in the Project Budget.

Question 13

Management Reserves and Project Manager’s Responsibility

Answer 13

Managing within the approved Cost Baseline and reporting major risks or issues.

Question 14

Contingency Reserve

Answer 14

Allocated funds within the Cost Baseline to address identified risks and uncertainties during project execution.

Question 15

Earned Value Analysis (EVA)

Answer 15

Monitors and controls schedule and cost performance.

Question 16

Cost Variance (CV) Formula

Answer 16

EV - AC (Earned Value minus Actual Cost).

Question 17

Schedule Variance (SV) Formula

Answer 17

EV – PV (Earned Value minus Planned Value).

Question 18

Cost Performance Index (CPI) Formula

Answer 18

EV / AC (Earned Value divided by Actual Cost).

Question 19

Schedule Performance Index (SPI) Formula

Answer 19

EV / PV (Earned Value divided by Planned Value).

Question 20

Performance Measurement Baselines in EVA

Answer 20

Used to compare actual results with baseline values.

Question 21

Reserve Analysis in Control Costs

Answer 21

Checks the status of contingency and management reserves.

Question 22

Cost Management Plan

Answer 22

Guides cost control activities within the project management plan.

Question 23

Probabilistic Estimate

Answer 23

Estimating costs with probabilities within a range.

Question 24

Lightweight Estimation Methods

Answer 24

Used for high-level cost estimates in Agile projects.

Question 25

Relative Estimation

Answer 25

Based on comparing estimates with other estimations.

Question 26

Detailed Documentation in Basis of Estimates

Answer 26

Includes assumptions and constraints for reliability and accuracy.

Question 27

Leveraging Team Experience for Estimation

Answer 27

Encourages collaboration among team members of different experience levels.

Question 28

Nominal Group Technique in Estimation Disagreements

Answer 28

Facilitates consensus-building and balanced estimates.

Question 29

Cost Analysis for Budget Discrepancies

Answer 29

Conducting detailed analysis to understand higher budget allocations.

Question 30

Change Requests in Control Costs

Answer 30

Created when corrective or preventive actions are needed.

Question 31

Importance of Cost Management Projects

Answer 31

Ensures alignment with the approved budget and prevents overruns.

Question 32

Transparency in Cost Management

Answer 32

Informing upper management and other key stakeholders about budget discrepancies and proposing solutions.