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Flashcards in Project Cost Management Deck (45):

Name the project cost management processes

Plan cost management
Estimate costs
Determine budget
Control costs


What is plan cost management

The process that establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs


Key benefit of plan cost management

It provides guidance and direction on how the project cost will be managed throughout the project


Plan cost management inputs

Project management plan
Project charter
Enterprise environmental factors
Organizational process assets


Plan cost management tools and techniques

Expert judgment
Analytical techniques


Plan cost management outputs

Cost management plan


What is estimate cost process

The process of developing an approximation of the monetary resources needed to complete project activities


Estimate costs key benefit

It determines the amount of cost required to complete project work


Estimate costs inputs

Cost management plan
Human resource management plan
Scope baseline
Project schedule
Risk register
Enterprise environmental factors
Organizational process assets


Estimate costs tools and techniques

Expert judgment
Analogous estimating
Parametric estimating
Bottom up estimating
Three point estimating
Reserve analysis
Cost of quality
Project management software
Vendor bid analysis
Group decision-making techniques


Estimate cost outputs

Activity cost estimates
Basis of estimates
Project documents updates


Rough order of magnitude

-25% to 75%


When is analogous estimating used

When there is limited amount of detailed information about the project


What are contingency reserves

The part of the budget intended to address known unknowns. They are part of the cost baseline and overall funding requirements


What are management reserves

The amount of project budget withheld for management control purposes that are intended to address unknown unknowns. They are not included in the cost baseline but are part of the overall project budget and funding requirements


What are activity cost estimates

Quantitative assessments of the probable cost required to complete the project


What is the basis of estimates

Supporting details for activity cost estimates.

Documentation for basis of the estimate
All assumptions made
Any known constraints
Indication of the range of possible estimates
Indication of confidence level of the estimate


What is the determine budget process

Process of aggravating the estimated cost of individual activities or work packages to establish an authorized cost baseline


Determine budget key benefit

It determines the cost baseline against which the project performance can be monitored and controlled


Determine budget inputs

Cost management plan
Scope baseline
Activity cost estimates
Basis of estimates
Project schedule
Resource calendars
Risk register
Organizational process assets


Determine budget tools and techniques

Cost aggregation
Reserve analysis
Expert judgment
Historical relationships
Funding limit reconciliation


Determine budget outputs

Cost baseline
Project funding requirements
Project documents updates


What is the funding limit reconciliation

The measurement of variance between the funding limits in the plant expenditures that necessitates the rescheduling of work to level out the rate of expenditures


What is the cost baseline

The approved version of the time face project budget, excluding any management reserves, which can only be changed or formal change control procedures and is the basis for comparison to actual results


What is the control costs process

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


Control costs key benefit

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


Control costs inputs

Project management plan
Project funding requirements
Work performance data
Organizational process assets


Control cost tools and techniques

Earned value management
To complete performance index (TCPI)
Performance reviews
Project management software
Reserve analysis


Control costs outputs

Work performance information
Cost forecasts
Change request
Project management plan updates
Project documents updates
Organizational process assets updates


What are project funding requirements

Projected expenditures plus anticipated liabilities


What is earned value management (EVM)

A methodology to combine scope, schedule, and resource measurements to assess project performance and progress


What is planned value

The authorized budget assigned to scheduled work


What is budget at completion (BAC)

The total planned value for the project


What is earned value

A measure of work performed expressed in terms of the budget authorized for that work


What is actual cost

The realize cost incurred for the work performed on an activity during a specific time.


What is schedule variance

A measure of schedule performance expressed as the difference between the earned value and plan value


What is cost variance

The amount of budget deficit or surplus at a given point in time, express is a difference between earned value and actual cost


What is the schedule performance index

A measure of schedule efficiency express is the ratio of earned value to plan the value. Under one is bad greater than one is good


What is cost performance index

A measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost. Less than one is bad, greater than one is good


What is the manual EAC method

It builds upon the actual cost and experiencing card for the work completed.


What is the EAC forecast for ET see work performed at the budgeted rate

Actual costs plus the difference between budget at completion minus earned value


What is the EAC forecast for ETC work performed at the present CPI

This method assumes what the product is experience today can be expected into the future. It equals the budget completion divided by the cost performance


What is the EAC forecast for ETC work considering both SPI and CPI factors

This method is the most useful when the project schedule is a factor impacting the E TC effort. It is equal to the actual cost plus the difference between BAC and EV divided by CPI times SPI


What is the to complete performance index (TCPI)

A measure of the cost performance that is required to be achieved with the remaining resources in order to meet a specified management goal, express is the ratio of the cost to finish the outstanding work to the remaining budget


Define project cost management

The processes involved in planning, Estimating, budgeting, financing, funding, managing, and controlling costs so that the project can be completed within the approved budget