Cost Budgeting – aggregating the estimated costs of individual activities or

• Project team knowledge. Members of the project team may recall previous actual costs or cost estimates. While such recollections can be useful, they are generally far less reliable than documented performance. • Lessons learned. Lessons learned could include cost estimates obtained from previous projects that are similar in scope and size. .3 Project Scope Statement The project scope statement Section 5.2.3.1 describes the business need, justification, requirements, and current boundaries for the project. It provides important information about project requirements that is considered during cost estimating. The project scope statement includes constraints, assumptions, and requirements. Constraints are specific factors that can limit cost estimating options. One of the most common constraints for many projects is a limited project budget. Other constraints can involve required delivery dates, available skilled resources, and organizational policies. Assumptions are factors that will be considered to be true, real, or certain. Requirements with contractual and legal implications can include health, safety, security, performance, environmental, insurance, intellectual property rights, equal employment opportunity, licenses, and permits – all of which are considered when developing the cost estimates. 7 The project scope statement also provides the list of deliverables, and acceptance criteria for the project and its products, services, and results. All factors are considered when developing the project cost estimate. The product scope description, within the project scope statement, provides product and service descriptions, and important information about any technical issues or concerns that are considered during cost estimating. .4 Work Breakdown Structure The project’s work breakdown structure WBS Section 5.3.3.2 provides the relationship among all the components of the project and the project deliverables Section 4.4.3.1. .5 WBS Dictionary The WBS dictionary Section 5.3.3.3 and related detailed statements of work provide an identification of the deliverables and a description of the work in each WBS component required to produce each deliverable. .6 Project Management Plan The project management plan Section 4.3 provides the overall plan for executing, monitoring, and controlling the project, and includes subsidiary plans that provide guidance and direction for cost management planning and control. To the extent that other planning outputs are available, they are considered during cost estimating. 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 163