Cost Estimating: Outputs Cost Estimating
7.3.1 Cost Control: Inputs
.1 Cost Baseline Described in Section 7.2.3.1. .2 Project Funding Requirements Described in Section 7.2.3.2. .3 Performance Reports Performance reports Section 10.3.3.1 provide information on cost and resource performance as a result of actual work progress. .4 Work Performance Information Work performance information Section 4.4.3.7 pertaining to the status and cost of project activities being performed is collected. This information includes, but is not limited to: • Deliverables that have been completed and those not yet completed • Costs authorized and incurred • Estimates to complete the schedule activities • Percent physically complete of the schedule activities. .5 Approved Change Requests Approved change requests Section 4.4.1.4 from the Integrated Change Control process Section 4.6 can include modifications to the cost terms of the contract, project scope, cost baseline, or cost management plan. .6 Project Management Plan The project management plan and its cost management plan component and other subsidiary plans are considered when performing the Cost Control process.7.3.2 Cost Control: Tools and Techniques
.1 Cost Change Control System A cost change control system, documented in the cost management plan, defines the procedures by which the cost baseline can be changed. It includes the forms, documentation, tracking systems, and approval levels necessary for authorizing changes. The cost change control system is integrated with the integrated change control process Section 4.6. .2 Performance Measurement Analysis Performance measurement techniques help to assess the magnitude of any variances that will invariably occur. The earned value technique EVT compares the cumulative value of the budgeted cost of work performed earned at the original allocated budget amount to both the budgeted cost of work scheduled planned and to the actual cost of work performed actual. This technique is especially useful for cost control, resource management, and production. A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 172 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA An important part of cost control is to determine the cause of a variance, the magnitude of the variance, and to decide if the variance requires corrective action. The earned value technique uses the cost baseline Section 7.2.3.1 contained in the project management plan Section 4.3 to assess project progress and the magnitude of any variations that occur. The earned value technique involves developing these key values for each schedule activity, work package, or control account: • Planned value PV. PV is the budgeted cost for the work scheduled to be completed on an activity or WBS component up to a given point in time. • Earned value EV. EV is the budgeted amount for the work actually completed on the schedule activity or WBS component during a given time period. • Actual cost AC. AC is the total cost incurred in accomplishing work on the schedule activity or WBS component during a given time period. This AC must correspond in definition and coverage to whatever was budgeted for the PV and the EV e.g., direct hours only, direct costs only, or all costs including indirect costs. 7 • Estimate to complete ETC and estimate at completion EAC. See ETC and EAC development, described in the following technique on forecasting. The PV, EV, and AC values are used in combination to provide performance measures of whether or not work is being accomplished as planned at any given point in time. The most commonly used measures are cost variance CV and schedule variance SV. The amount of variance of the CV and SV values tend to decrease as the project reaches completion due to the compensating effect of more work being accomplished. Predetermined acceptable variance values that will decrease over time as the project progresses towards completion can be established in the cost management plan. • Cost variance CV. CV equals earned value EV minus actual cost AC. The cost variance at the end of the project will be the difference between the budget at completion BAC and the actual amount spent. Formula: CV= EV – AC • Schedule variance SV. SV equals earned value EV minus planned value PV. Schedule variance will ultimately equal zero when the project is completed because all of the planned values will have been earned. Formula: SV = EV – PV These two values, the CV and SV, can be converted to efficiency indicators to reflect the cost and schedule performance of any project. • Cost performance index CPI. A CPI value less than 1.0 indicates a cost overrun of the estimates. A CPI value greater than 1.0 indicates a cost underrun of the estimates. CPI equals the ratio of the EV to the AC. The CPI is the most commonly used cost-efficiency indicator. Formula: CPI = EVAC A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA 173Parts
» Project Characteristics What is a Project?
» Projects vs. Operational Work
» Projects and Strategic Planning
» Introduction, defines key terms and provides an overview for the
» Project Life Cycle and Organization, describes the environment in
» Project Management Processes for a Project, describes the five
» Project Integration Management, describes the processes and
» Project Scope Management, describes the processes involved in
» Project Procurement Management, describes the processes that
» Project Management Body of Knowledge
» Application Area Knowledge, Standards and Regulations
» Understanding the Project Environment
» General Management Knowledge and Skills
» Interpersonal Skills Areas of Expertise
» Project Management Office Project Management
» What is Project Management? The Project Life Cycle 2.2 Project Stakeholders
» Organizational Influences Index of /misc
» Characteristics of the Project Life Cycle
» Characteristics of Project Phases
» Project Life Cycle and Product Life Cycle Relationships
» Project Stakeholders Index of /misc
» Organizational Structure Organizational Influences
» The Role of the PMO in Organizational Structures
» Project Management System Organizational Influences
» Project Management Processes Index of /misc
» Initiating Process Group Project management Process Groups
» Planning Process Group Project management Process Groups
» Executing Process Project management Process Groups
» Monitoring and Controlling Process Group
» Process Interactions Index of /misc
» Project Management Process Mapping
» Develop Project Charter – developing the project charter that formally
» Develop Preliminary Project Scope Statement – developing the preliminary
» Develop Project Management Plan – documenting the actions necessary to
» Direct and Manage Project Execution – executing the work defined in the
» Monitor and Control Project Work – monitoring and controlling the
» Integrated Change Control – reviewing all change requests, approving
» Close Project – finalizing all activities across all of the Project Management
» Develop Project Charter: Inputs
» Develop Project Develop Project
» Develop Preliminary Project Scope Statement: Inputs
» Develop Preliminary Project Scope Statement: Tools and Techniques
» Develop Preliminary Project Scope Statement: Outputs
» Develop Project Develop Project Management Plan
» Develop Project Management Plan: Outputs
» Direct and Manage Project Execution: Inputs
» Monitor and Control Project Work: Inputs Monitor and Control Project Work: Tools and Techniques
» Monitor and Control Project Work: Outputs
» Close Project: Inputs Close Project
» Close Project: Close Project
» Close Project: Outputs Close Project
» Scope Control – controlling changes to the project scope.
» Scope Planning: Scope Planning
» Scope Planning: Tools and Techniques Scope Planning:
» Scope Definition: Inputs Scope Definition
» Scope Definition: Tools and Techniques Scope Definition: Outputs
» Create WBS: Tools and Techniques
» Create WBS: Outputs Create WBS
» Scope Control: Inputs Scope Control
» Scope Control: Tools and Techniques
» Scope Control: Outputs Scope Control
» Activity Definition – identifying the specific schedule activities that need to
» Activity Sequencing – identifying and documenting dependencies among schedule activities.
» Activity Duration Estimating – estimating the number of work periods that
» Schedule Development – analyzing activity sequences, durations, resource
» Schedule Control Index of /misc
» Activity Definition: Inputs Activity Definition
» Activity Definition: Tools and Techniques
» Activity Definition: Outputs Activity Definition
» Activity Sequencing: Inputs Activity Sequencing
» Activity Sequencing: Tools and Techniques
» Activity Resource Estimating: Inputs
» Activity Resource Estimating: Tools and Techniques
» Activity Resource Estimating: Outputs
» Activity Duration Estimating: Inputs
» Activity Duration Activity Duration
» Activity Duration Estimating: Outputs
» Schedule Development: Inputs Schedule Development
» Schedule Development: Tools and Techniques
» Schedule Development: Outputs Schedule Development
» Schedule Control: Outputs Schedule Control
» Cost Estimating – developing an approximation of the costs of the resources
» Cost Budgeting – aggregating the estimated costs of individual activities or
» Cost Control – influencing the factors that create cost variances and
» Cost Estimating: Cost Estimating
» Cost Estimating: Tools and Techniques
» Cost Estimating: Outputs Cost Estimating
» Cost Budgeting: Inputs Cost Budgeting
» Cost Budgeting: Cost Budgeting
» Cost Budgeting: Outputs Cost Budgeting
» Cost Control: Inputs Cost Control: Tools and Techniques
» Cost Control: Outputs Cost Control
» Quality Planning – identifying which quality standards are relevant to the
» Perform Quality Assurance – applying the planned, systematic quality
» Perform Quality Control – monitoring specific project results to determine
» Quality Planning: Inputs Quality Planning
» Quality Planning: Tools and Techniques
» Quality Planning: Quality Planning
» Perform Quality Assurance: Inputs Perform Quality
» Perform Quality Assurance: Outputs
» Perform Quality Control: Inputs
» Perform Quality Control: Tools and Techniques
» Perform Quality Control: Outputs
» Human Resource Planning – Identifying and documenting project roles,
» Acquire Project Team – Obtaining the human resources needed to complete
» Develop Project Team – Improving the competencies and interaction of team
» Manage Project Team – Tracking team member performance, providing
» Human Resource Planning: Inputs
» Human Resource Planning: Tools and Techniques
» Human Resource Planning: Outputs
» Acquire Project Team: Inputs
» Acquire Project Team: Tools and Techniques
» Acquire Project Team: Outputs
» Develop Project Team: Inputs Develop Project Team: Tools and Techniques
» Manage Project Team: Tools and Techniques
» Manage Project Team: Outputs
» Communications Planning: Inputs Communications Planning
» Communications Planning: Tools and Techniques
» Communications Planning: Outputs Communications Planning
» Information Distribution: Inputs Information Distribution
» Information Distribution: Tools and Techniques
» Information Distribution: Outputs Information Distribution
» Performance Reporting: Inputs Performance Reporting: Tools and Techniques
» Performance Reporting: Outputs Performance Reporting
» Manage Stakeholders: Inputs Manage Stakeholders: Tools and Techniques
» Manage Stakeholders: Outputs Manage Stakeholders
» Risk Management Planning: Inputs
» Risk Management Planning: Tools and Techniques
» Risk Management Planning: Outputs
» Risk Identification: Inputs Risk Identification: Tools and Techniques
» Qualitative Risk Analysis: Inputs
» Qualitative Risk Analysis: Tools and Techniques
» Qualitative Risk Analysis: Outputs
» Quantitative Risk Analysis: Inputs
» Quantitative Risk Analysis: Tools and Techniques
» Quantitative Risk Analysis: Outputs
» Risk Response Planning: Inputs
» Risk Response Planning: Tools and Techniques
» Risk Response Planning: Outputs
» Risk Monitoring and Control: Inputs Risk Monitoring and Control: Tools and Techniques
» Risk Monitoring and Control: Outputs
» Plan Purchases and Acquisitions – determining what to purchase or acquire
» Plan Contracting – documenting products, services, and results requirements
» Request Seller Responses – obtaining information, quotations, bids, offers,
» Select Sellers – reviewing offers, choosing among potential sellers, and
» Contract Administration – managing the contract and relationship between
» Contract Closure – completing and settling each contract, including the
» Plan Purchases and Acquisitions: Inputs
» Plan Purchases and Acquisitions: Tools and Techniques
» Cost-Plus-Fee CPF or Cost-Plus-Percentage of Cost CPPC. Seller
» Plan Purchases and Acquisitions: Outputs
» Plan Contracting: Inputs Plan Contracting
» Plan Contracting: Tools and Techniques
» Plan Contracting: Outputs Plan Contracting
» Request Seller Responses: Inputs
» Request Seller Responses: Tools and Techniques
» Request Seller Responses: Outputs
» Select Sellers: Inputs Select Sellers
» Select Sellers: Tools and Techniques
» Select Sellers: Outputs Select Sellers
» Contract Administration: Inputs Contract Administration: Tools and Techniques
» Contract Administration: Outputs Contract Administration
» Contract Closure: Inputs Contract Closure
» Contract Closure: Tools and Techniques
» - Introduction Changes Contract Closure: Outputs
» - Project Life Cycle and Organization Changes
» - Project Management Processes for a Project Changes
» - Project Integration Management Changes
» - Project Scope Management Changes
» - Project Time Management Changes - Project Cost Management Changes
» - Project Quality Management Changes
» - Project Human Resource Management Changes
» - Project Communications Management Changes
» - Project Risk Management Changes - Project Procurement Management Changes
» Introduction Contract Closure: Outputs
» Project Life Cycle and Organization
» Project Management Processes for a Project
» Project Integration Management Contract Closure: Outputs
» Project Scope Management Contract Closure: Outputs
» Project Time Management Contract Closure: Outputs
» Project Cost Management Contract Closure: Outputs
» Project Quality Management Contract Closure: Outputs
» Project Human Resource Management
» Project Communications Management Contract Closure: Outputs
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