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CAMP 6th Edition > Project Cost Managment > Flashcards

Project Cost Managment Flashcards

1
Q

The actual amount of monies the project has spent to date.

A

Actual cost (AC)

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2
Q

An approach that relies on historical information to predict the cost of the current project. It is also known as top-down estimating and is the least reliable of all the cost-estimating approaches.

A

Analogous estimating

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3
Q

An estimating approach that starts from zero, accounts for each component of the WBS, and arrives at a sum for the project. It is completed with the project team and can be one of the most time-consuming and most reliable methods to predict project costs.

A

Bottom-up estimating

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4
Q

This estimate is also somewhat broad and is used early in the planning processes and also in top-down estimates. The range of variance for the estimate can be from -10 percent to +25 percent.

A

Budget estimate

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5
Q

A cost-estimating approach that uses a database, typically software-driven, to create the cost estimate for a project.

A

Commercial database

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6
Q

A planned amount of money or time which is added to -an estimate to address a specific risk.

An allowance to account for overruns in costs. This is used at the project managers discretion and with managements approval to counteract cost overruns for scheduled activities and risk events.

A

Contingency reserve

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7
Q

This requires you to aggregate or combine costs from an activity level to a work package level. The final sum of the cost estimates is applied to the cost baseline.

A

Cost aggregation

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8
Q

Projected budgets that predict the overall cost of a project in a particular period. They are also called time-phased budgets because they are budgets that are linked to a specific time period.

Output of Determine budget

A

Cost baseline

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9
Q

The cost aggregation achieved by assigning specific dollar amounts for each of the scheduled activities or, more likely, for each of the work packages in the WBS. This applies the cost estimates over time.

A

Cost budgeting

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10
Q

A system that examines any changes associated with scope changes, the cost of materials, and the cost of any other resources, and the associated impact on the overall project cost.

A

Cost change control system

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11
Q

This dictates how cost variances will be managed.

A

Cost management plan

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12
Q

The monies spent to recover from not adhering to the expected level of quality. Examples may include rework, defect repair, loss of life or limb because safety precautions were not taken, loss of sales, and loss of customers.

A

Cost of poor quality/Cost of nonconformance to quality

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13
Q

The monies spent to attain the expected level of quality within a project. Examples include training, testing, and safety precautions.

A

Cost of quality

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14
Q

Measures the project based on its financial performance.

A

Cost performance index (CPI)
The formula is CPI = EV/AC.

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15
Q

The difference of the earned value amount and the cumulative actual costs of the project.

A

Cost variance (CV)The formula is CV = EV - AC.

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16
Q

This estimate type is one of the most accurate. Its used late in the planning processes and is associated with bottom-up estimating. You need the WBS in order to create the XXX. The range of variance for the estimate can be from -5 percent to +10 percent.

A

Definitive estimate

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17
Q

expenses tied directly to the product or the project and cannot be shared among projects (for example, airfare, hotels, long-distance phone charges, and so on)

A

Direct Costs

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18
Q

The completed to date and the authorized budget for that work. It is the percentage of the BAC that represents the actual work completed in the project.

A

Earned Value (EV)

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19
Q

This formula predict the likely completed costs of the project based on current scenarios within the project.

A

Estimate at Completion (EAC)

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20
Q

Predicts how much funding the project will require to be completed. Three variations of this formula are based on conditions the project may be experiencing.

A

Estimate to Complete (ETC)

21
Q

Costs that remain constant thru the life of the project (the cost of a piece of rented equipment for the project, the cost of a consultant brought on to the project, and so on).

A

Fixed Costs

22
Q

An Org’s approach to managing cash flow against the project deliverables based on a schedule, milestone accomplishment, or data constraints.

A

Funding Limit Reconciliation

23
Q

Costs that are representative of more than one project (for example, utilities for the performing organization, access to a training room, project management software license, and so on).

A

Indirect costs

24
Q

An event that will likely happen within the project, but when it will happen and to what degree is unknown. These events, such as delays, are usually risk-related.

A

Known unknown

25
Q

An approach that assumes the cost per unit decreases the more units workers complete, because workers learn as they complete the required work.

A

Learning curve

26
Q

A market condition where the market is so tight that the actions of one vendor affect the actions of all the others.

A

Oligopoly

27
Q

The total cost of the opportunity that is refused to realize an opposing opportunity.

A

Opportunity cost

28
Q

An approach using a parametric model to extrapolate what costs will be needed for a project (for example, cost per hour and cost per unit). It can include variables and points based on conditions.

A

Parametric estimating

29
Q

This value is the work scheduled and the budget authorized to accomplish that work. It is the percentage of the BAC that reflects where the project should be at this point in time.

A

Planned value (PV)

30
Q

The final variance, which is discovered only at the projects completion. .

A

Project variance. formula is VAR = BAC - AC

31
Q

This is a statistical approach to predicting what future values may be, based on historical values. Creates quantitative predictions based on variables within one value to predict variables in another. This form of estimating relies solely on pure statistical math to reveal relationships between variables and to predict future values.

A

Regression analysis

32
Q

The process of estimating the amount of money that should be set aside to cover unexpected costs.

Cost reserves are for unknown unknowns within a project. The management reserve is not part of the project cost baseline, but is included as part of the project budget.

A

Reserve analysis

33
Q

This rough estimate is used during the initiating processes and in top-down estimates. The range of variance for the estimate can be from -25 percent to +75 percent.

A

Rough order of magnitude

34
Q

Measures the project based on its schedule performance.

A

Schedule performance index (SPI)
The formula is SPI = EV/PV.

35
Q

The difference between the earned value and the planned value. The formulas is SV = EV - PV.

A

Schedule variance (SV)

36
Q

Many vendors can provide what your project needs to purchase, but you prefer to work with a specific vendor.

A

Single source

37
Q

Only one vendor can provide what your project needs to purchase. Examples include a specific consultant, specialized service, or unique type of material.

A

Sole source

38
Q

Monies that have already been invested in a project.

A

Sunk costs

39
Q

A formula to forecast the likelihood of a project to achieve its goals based on what’s happening in the project right now.

A

To-Complete Performance Index
There are two different flavors for the TCPI, depending on what you want to accomplish. If you want to see if your project can meet the budget at completion= (BAC - EV)/(BAC - AC). If you want to see if your project can meet the newly created estimate at completion, you will use this version of the formula: TCPI = (BAC - EV)/(EAC - AC).

40
Q

Costs that change based on the conditions applied in the project (the number of meeting participants, the supply of and demand for materials, etc.)

A

Variable costs

41
Q

The difference between what was expected and what was experienced.

A

Variance

42
Q

A forecasting formula that predicts how much of a variance the project will likely have based on the current conditions within the project.

A

Variance at Completion (VAC) . The formula is VAC = BAC - EAC.

43
Q

Money Spent to reach expected level of quality/avoid failures. (+terms)

A

Cost of Conformance.
Training
Equipment
Time (to do it right)
Inspection

44
Q

The supporting documentation that explains how the cost estimates were developed.

A

Basis of estimates

45
Q

The supporting documentation that explains how the cost estimates were developed.

A

Basis of estimates

46
Q

In Earned Value Management, Schedule Variance (SV) is equal to:
A. EV minus PV
B. EV minus AC
C. AC minus EV
D. PV minus EV

A

A. EV minus PV

47
Q

A project is 50% complete, but has already expended 75% of its approved budget. The Cost Performance Index (CPI) equals:

A. 0.67
B. 1.25
C. 1.50
D. 1.75

A

A. 0.67

Cost Performance Index (CPI) = Earned Value (EV) / Actual Costs (AC)

CPI = 50 / 75 = 0.67

48
Q

The To-Complete-Performance-Index (TCPI) is calculated as 1.18. This means:

A. The project is expected to complete ahead of schedule
B. The project must complete the remaining work at a higher level of performance to meet defined its defined goal
C. The project is currently under budget
D. The project has exceeded scope boundaries

A

B. The project must complete the remaining work at a higher level of performance to meet defined its defined goal

Greater than 1 – harder to
complete and meet
Less than 1 – easier to complete
and meet

49
Q

Which is NOT among the Tools and Techniques of the Estimate Costs process:

A. Alternatives Analysis
B. Reserve Analysis
C. Cost of Quality
D. Funding Limit Reconciliation

A

D. Funding Limit Reconciliation

CAMP 6th Edition (14 decks)

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