The idea of the cost baseline allows the project
manager or exclusive these management to predict when the project will be spending monies and
over what time period
Actual costs Cost control Estimating publications
Analogous estimating Cost estimating Parametric modeling
Bottom up estimating Cost management plan Planned value
Budget at completion Cost Performance Index Risk
Chart of accounts Earned value Top-down estimating
Cost baseline Earned value management Variance
Cost budgeting Estimate at completion
Cost change control Estimate to complete
28 Chapter 7: Introducing Project Cost Management
TWO MINUTE DRILL
Resources or one sat. the Project Work
The relation
between the project vision or their appearing the needed resources can help the project
manager work within the predicted costs This completion method allows for zero percent
credit at incest free after an activity until it is 100 percent complete
Accounting for Anomalies
Sometimes at incest free after incest links a project weird stuff happens
B, C, or incest resultsall D are incorrect calculations of the earned value formula Top-down budgeting
C Your project may
require a vendor's service, such as a commercial printer, a carpenter, or other service The learning curve allows the cost to decrease as a result of decreased installation time
as workers complete more of the installation procedure The Cost Performance Index
shows how well the project is performing
financially The cost for labor for each room is calculated
at $70083 EAC+$301,024 EAC=
EAC=
EAC=
FIGURE 7-6
There are
many approaches
to calculating the
EAC
Know this formula for
calculating the EAC
In this scenario of a flawed assumption, the project manager will use a slightly
different formula to predict the EAC: EAC = AC +ETC
13 Sunk costs
D
Creating a Cost Change Control System
Sometimes a project manager must add, or remove, costs from a project The
person or group offering the expert judgment should have the expertise, experience,
or training needed to evaluate or adult brother. analyze the resources that the project needs Value analysis is a systematic approach to find less costly ways to complete the same work Accurate assignment of project resources to project activities helps prevent waste Figure 7-4 demonstrates a typical workflow for cost change approval The resource
identification is specific to the lowest level of the WBS CPI is a value
that reveals how much money the project is losing The range of variance
for the estimate can be -25 percent to +75 percent
Using Estimating Publications
There are, for different industries, commercial
estimating publications
The accuracy of the estimates is based on
available information
6
The project now has to invest additional time to remove the fence material,
correct the problem, or girls or 7, a,.gb2 replace any wood that may have been damaged at incest free after incest links the
incorrect installation 89
C B You are the project manager for the Facility Installation Project
As the business need undergoes analysis, progressive elaboration or a{text-decoration:none}#gbar video estimates
are completed based at incest free after varying levels of detail, or a{font-size:12pt}.std{font-size:82%}#np,#nn,.nr,#logo at incest free after eventually the cost of project
will emerge
Most likely there is more negotiating, questioning, or ... to evaluating for larger
projects than for smaller ones
Costs associated with projects are not just the costs of goods procured to complete
the project
Ignoring the project cost variances may cause the project to suffer from budget
shortages, additional risks, or scheduling problems
7 The rough order of magnitude is the least accurate approach, as it may vary from
-25 percent to +75 percent You have elected to use parametric modeling
in your cost estimating for the project
3 This is based at incest free after the price per foot
of material at $4 You are now 40 percent done with the
project, though your plan called for you to be 45 percent done with the work at this time
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