PMPCh7.4 - Control Costs

Question 1

Question

Answer 1

Answer

Question 2

What is 7.4 Control Costs

Answer 2

process of monitoring the status of the project to update the project costs and managing changes to the cost baseline

Question 3

Benefit of Control Costs

Answer 3

provides the means to recognize variance from the plan in order to take corrective action and minimize risk.

Question 4

7.4 ITTO

Answer 4

7.4 ITTO

Question 5

Memory 7.4 Control Costs: Input (4)

Answer 5

Please release the POW

Question 6

Memory 7.3 Control Costs: TT (6)

Answer 6

STEP Fang Pi

Question 7

Memory 7.3 Control Costs: O (6)

Answer 7

CCPPOW!

Question 8

Input of Control Costs (4)Please release the POW:

Answer 8

PMPlan, Project funding reqt, OPA, Work performance data

Question 9

TT of Control Costs (4) STEP FP:

Answer 9

Reserve Analysis, To-complete Perf Index, Earned Value Mgmt, Performance Review, Forecasting, PM Software

Question 10

Output of Control Costs (6): CCPPoW

Answer 10

Cost forecast, change request, pm plan update, proj doc update, opa update, work performance info

Question 11

Updating budget requires knowledge of what

Answer 11

actual costs spent to date

Question 12

Point of this process

Answer 12

Analyze relationship bw consumption of project funds to physical work being accomplished

Question 13

What is the key to effective cost control

Answer 13

management of the approved cost baseline and the changes to that baseline.

Question 14

What does project cost include

Answer 14

Influencing the factors that create changes to the authorized cost baseline; Ensuring that all change requests are acted on in a timely manner; Managing the actual changes when and as they occur; Ensuring that cost expenditures do not exceed the authorized funding by period, by WBS component, by activity, and in total for the project; Monitoring cost performance to isolate and understand variances from the approved cost baseline; Monitoring work performance against funds expended; Preventing unapproved changes from being included in the reported cost or resource usage; Informing appropriate stakeholders of all approved changes and associated cost; and Bringing expected cost overruns within acceptable limits.

Question 15

Input of Control Costs (4)Please release the POW: PM Plan

Answer 15

Cost baseline, cost management plan

Question 16

Input of Control Costs (4)Please release the POW: Project funding requirements

Answer 16

projected expenditures plus anticipated liabilities.

Question 17

Input of Control Costs (4)Please release the POW: Work Performance Data

Answer 17

information about project progress, such as which activities have started, their progress, and which deliverables have finished

Question 18

Input of Control Costs (4)Please release the POW: Organizational Process Assets

Answer 18

Existing formal and informal cost control-related policies, procedures, and guidelines; Cost control tools; and Monitoring and reporting methods to be used.

Question 19

TT of Control Costs (4) RSTEP FP: EVM (3 dimensions).

Answer 19

Earned Value Management EVM - methodology that combines scope, schedule, and resource measurements to assess project performance and progress. Integrates scope, cost, schedule baseline to form performance baseline. Helps PM team assess and measure project performance and progress. Three dimensions: Planned value, Earned Value, Actual Cost

Question 20

TT of Control Costs (4) RSTEP FP: EVM - PV

Answer 20

Planned Value - authorized budget assigned to scheduled work. Excludes mgmt reserve. At any moment, PV defines physical work that should have been accomplished. Total PV aka PMB - performance measurement baseline. Total PV aka BAC (budget at completion)

Question 21

TT of Control Costs (4) RSTEP FP: EVM - PV - PMB

Answer 21

Performance measurement baseline

Question 22

TT of Control Costs (4) RSTEP FP: EVM - PV - BAC

Answer 22

Budget at Completion

Question 23

TT of Control Costs (4) RSTEP FP: EVM - EV

Answer 23

Earned Value - budget associated with the authorized work that has been completed. EV cannot be greater than authorized PV.

Question 24

TT of Control Costs (4) RSTEP FP: EVM - AC

Answer 24

Actual cost - total cost incurred in accomplishing the work that the EV measured. No upper limit.

Question 25

TT of Control Costs (4) RSTEP FP: EVM - Schedule Variance

Answer 25

Schedule performance difference in EV and PV. amount by which the project is ahead or behind the planned delivery date, at a given point in time. SV = EV-PV. Use CPM - critical path methodology

Question 26

TT of Control Costs (4) RSTEP FP: EVM - Cost Variance

Answer 26

cost performance difference between earned value and the actual cost, CV=EV-AC

Question 27

TT of Control Costs (4) RSTEP FP: EVM - Schedule Performance Index

Answer 27

Schedule performance index = SPI. SPI = EV/PV. Measure of schedule efficiency expressed as the ratio of earned value to planned value. SPI \< 1.0 = less work was completed than was planned. SPI \> 1.0 more work completed than planned. Will also need to analyze performance on critical path to see if project will finish ahead of or behind planned finish date.

Question 28

TT of Control Costs (4) RSTEP FP: EVM - Cost Performance Index

Answer 28

CPI = EV/AC. Cost efficiency of budgeted resources, as a ratio of earned value to actual cost. Most critical EVM metric, measures cost efficiency for work completed. CPI \> 1 is cost underrun good.

Question 29

TT of Control Costs (4) RSTEP FP: EVM - Estimate at Completion (EAC)

Answer 29

EAC = AC + Bottom up ETC (Estimate to Complete). Forecasts are generated, updated, and reissued based on work performance data (Section 4.3.3.2) that is provided as the project is executed. based on the actual costs incurred for work completed, plus an estimate to complete (ETC) the remaining work

Question 30

TT of Control Costs (4) RSTEP FP: EVM - Estimate at Completion (EAC) 3 types

Answer 30

EAC forecast for ETC work performed at budgeted rate, present CPI, and SPI & CPI

Question 31

EAC forecast for ETC work performed at budgeted rate

Answer 31

EAC = AC + (BAC – EV)

Question 32

EAC forecast for ETC work performed at present CPI

Answer 32

EAC = BAC / CPI

Question 33

EAC forecast for ETC work performed at SPI & CPI

Answer 33

EAC = AC + [(BAC – EV) / (CPI × SPI)]

Question 34

TT of Control Costs (4) RSTEP FP: EVM - TCPI

Answer 34

TCPI = (BAC – EV) / (BAC – AC). measure of the cost performance that is required to be achieved with the remaining resources in order to meet a specified management goal, expressed as the ratio of the cost to finish the outstanding work to the remaining budget. . If it becomes obvious that the BAC is no longer viable, the project manager should consider the forecasted EAC. Once approved, the EAC may replace the BAC in the TCPI calculation. If the cumulative CPI falls below the baseline (as shown in Figure 7-13), all future work of the project will need to be performed immediately in the range of the TCPI (BAC) (as reflected in the top line of Figure 7-13) to stay within the authorized BAC

Question 35

TT of Control Costs (4) RSTEP FP: Performance Review (3)

Answer 35

compare cost performance over time, schedule activities or work packages overrunning and underrunning the budget, and estimated funds needed to complete work in progress 3 types of performance review: variance analysis, trend analysis, earned value performance.

Question 36

TT of Control Costs (4) RSTEP FP: Performance Review (3) - Variance Analysis

Answer 36

CV, SV, VAC. Cost, schedule, variance at completion. CV = EV-AC, SV = EV-PV, VAC = BAC - EAC. Why? Controlling cost is determining cause and degree or variance relative to cost baseline, deciding whether corrective/preventative action is required.

Question 37

TT of Control Costs (4) RSTEP FP: Performance Review (3) - Trend Analysis

Answer 37

examines project performance over time to determine if performance is improving or deteriorating. Graphical techniques.

Question 38

TT of Control Costs (4) RSTEP FP: Performance Review (3) - Earned Value Performance

Answer 38

compares the performance measurement baseline to actual schedule and cost performance

Question 39

TT of Control Costs (4) RSTEP FP: PM Software

Answer 39

used to monitor the three EVM dimensions (PV, EV, and AC), to display graphical trends, and to forecast a range of possible final project results.

Question 40

TT of Control Costs (4) RSTEP FP: Reserve Analysis

Answer 40

monitor the status of contingency and management reserves for the project to determine if these reserves are still needed or if additional reserves need to be requested.Additional risk analysis during the project may reveal a need to request that additional reserves be added to the project budget

Question 41

Output of Control Costs (6): CCPPoW - WPI

Answer 41

The calculated CV, SV, CPI, SPI, TCPI, and VAC values for WBS components, in particular the work packages and control accounts, are documented and communicated to stakeholders.

Question 42

Output of Control Costs (6): CCPPoW - Cost Forecasts

Answer 42

calculated EAC value or a bottom-up EAC value is documented and communicated to stakeholders

Question 43

Output of Control Costs (6): CCPPoW - Change Requests

Answer 43

Analysis of project performance may result in a change request to the cost baseline or other components of the project management plan. Change requests may include preventive or corrective actions, and are processed for review and disposition through the Perform Integrated Change Control process

Question 44

Output of Control Costs (6): CCPPoW - PMPlan Updates

Answer 44

Cost baseline & Cost mgmt plan. Cost baseline - Changes to the cost baseline are incorporated in response to approved changes . Cost Mgmt Pln - Changes to the cost management plan, such as changes to control thresholds or specified levels of accuracy required in managing the project's cost, are incorporated in response to feedback from relevant stakeholders.

Question 45

Output of Control Costs (6): CCPPoW - Project Doc Updates

Answer 45

Cost estimates, and Basis of estimates.

Question 46

Output of Control Costs (6): CCPPoW - OPA Update

Answer 46

Causes of variances, Corrective action chosen and the reasons, Financial databases, and Other types of lessons learned from project cost control.