Flashcards
07 PROJECT COST MANAGEMENT
Cards in this deck (32)
- 17.1 Plan Cost Management*establishes the policies, procedures, and documentation
for planning, managing, expending, and controlling project costs. - 27.2 Estimate Costs*Developing an approximation of the monetary resources needed to
complete project activities - 37.3 Determine BudgetAggregating estimated costs of individual activities or work
packages to establish an authorized cost baseline. - 47.4 Control CostsMonitoring the status of the project:
*Update the project costs
Managing changes to the cost baseline. - 5Different stakeholders will measure project costs indifferent ways and at different times.
- 6What is the cost management plan?*Component of Project Management Plan
*Describes how the project
costs will be planned, structured, and controlled
*Describes tools and
techniques - 7What is a Cost estimates?*Prediction that is based on the information known at a given point in time. *Identification and consideration of costing alternatives to initiate and complete the project.
- 8The accuracy of a project estimate will ???*Increase as the
project progresses through the project life cycle. - 9What is a cost estimate?*Quantitative assessment of the likely costs for resources
required to complete the activity.
*May be presented at the activity level or in summary form. - 10What is Analogous Cost Estimating ?*Uses values such as scope, cost, budget, and duration or measures of scale such
as size, weight, and complexity from a previous, similar project as the basis for estimating the same parameter
or measurement for a current project. *Technique relies on the actual cost of previous, similar projects as BOE for current project.
*Gross value estimating approach,
sometimes adjusted for known differences in project complexity. - 11What are Management Reserves?*Intended to address the
“unknown unknowns”
*Not included in the cost baseline but
is part of the overall project budget and funding requirements
* If used, additional cost baseline
*Requires an
approved change to the cost baseline. - 12What are Activity Cost Estimates?*Quantitative assessments of probable costs required to complete project
work.
*Cost estimates can be in summary form or in detail.
*Costs estimated for all resources that
are applied to the activity cost estimate. - 13A project budget includes what?*All the funds authorized to execute the project
- 14What is the Cost Baseline?*Approved
version of the time-phased project budget, * EXCLUDES management reserves. - 15Earned value management (EVM) isbaseline, to form the performance baseline, which helps the project management team assess and measure
project performance and progress. - 16The total of the Planned Value is sometimes referred to as?*Performance Measurement Baseline
(PMB).
*Also known as Budget at Completion (BAC). - 17Earned value (EV) is a measure of ???• Measure of work performed expressed in terms of budget authorized for that work.
*Budget associated with the authorized work that has been completed.
The EV being measured needs to be related to the PMB, and the EV measured cannot be greater than the
authorized PV budget for a component. The EV is often used to calculate the percent complete of a project.
Progress measurement criteria should be established for each WBS component to measure work in
progress. Project managers monitor EV, both incrementally to determine current status and cumulatively
to determine the long-term performance trends. - 18Cost Performance Index (CPI) ?*Measures cost efficiency of budgeted
resources,
*Ratio of earned value to actual cost
*MOST critical EVM metric
*Measures cost efficiency of work completed
*CPI <1.0 indicates cost overrun for work completed.
*CPI> 1.0 indicates cost underrun of performance to date. The CPI is equal to the ratio of the EV to the AC. Equation: CPI = EV/AC - 19Schedule Performance Index (SPI)*measure of schedule efficiency
*ratio of earned value to planned value. *how efficiently the project team is
using its time.
*Can be used in conjunction with the CPI to forecast thefinal project completion estimates. An SPI value less than 1.0 indicates less work was completed than
was planned. An SPI greater than 1.0 indicates that more work was completed than was planned. Since
the SPI measures all project work, the performance on the critical path also needs to be analyzed to
determine whether the project will finish ahead of or behind its planned finish date. The SPI is equal to
the ratio of the EV to the PV. Equation: SPI = EV/PV - 20The To-Complete Performance Index (TCPI) isa 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. TCPI is the calculated cost performance index that is achieved
on the remaining work to meet a specified management goal, such as the BAC or the EAC. - 21What is PV (Planned Value)?*Authorized budget assigned to
scheduled work.
*Value of the work planned to be
completed to a point in time - 22EV (Earned Value)*Measure of work performed
*Expressed in terms of the budget
authorized for that work. - 23AC (Actual Cost)*The realized cost incurred for the
work performed on an activity during
a specific time period.
*Actual cost of all the work
completed to a point in time, usually
the data date. - 24BAC (Budget at Completion)*Sum of all budgets established
for the work to be performed.
*Value of total planned work, the
project cost baseline. - 25CV (Cost Variance)*Amount of budget deficit or
surplus at a given point in time,
*Earned Value minus actual cost. - 26SV (Schedule Variance)*Amount the project is ahead or behind the planned delivery date
*Earned Value minus Planned Value
*Difference between work
completed and the work planned at the same point in time - 27VAC (Variance at Completion)*A projection of amount of budget
deficit or surplus
*Budget at Completion minus
Estimate at Completion - 28CPI (Cost Performance Index)*Cost Efficiency of budgeted resources
*Ratio of earned value to actual cost.
CPI =1.0 project on budget
*work
actually done so far is exactly the
same as the cost so far. Other values
show the percentage of how much
costs are over or under the budgeted
amount for work accomplished. - 29SPI (Schedule Performance Index)*Measure of schedule efficiency
*Ratio of earned value to planned value
*SPI of 1.0 = project on schedule
*Work completed = work planned
Other values how much costs are
over or under budgeted for work planned. - 30EAC (Estimate At Completion)*Expected total cost of completing
all work
*Expressed as the sum of the actual cost to date and the estimate to complete. - 31ETC (Estimate to Complete)*Expected cost to finish all the
remaining project work. - 32TCPI (To Complete Performance Index)?* How much is it going to cost with the existing resources to get/met a specified management goal
*Ratio Cost to
Finish Outstanding Work : Budget Available.
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- PMP Project Management Flashcards on 07 PROJECT COST MANAGEMENT, created by kat atkins on 07/03/2017.
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- Created by miguelabascal · Jul 12, 2013
- Copied by kat atkins · Mar 7, 2017
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