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Description
Flashcards by miguelabascal, updated more than 1 year ago
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Created by miguelabascal
almost 11 years ago
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| Question | Answer |
| 7.1 Plan Cost Management | The process that establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs. |
| 7.2 Estimate Costs | The process of developing an approximation of the monetary resources needed to complete project activities. |
| 7.3 Determine Budget | The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. |
| 7.4 Control Costs | The process of monitoring the status of the project to update the project costs and managing changes to the cost baseline. |
| Different stakeholders will measure project costs in | different ways and at different times. For example, the cost of an acquired item may be measured when the acquisition decision is made or committed, the order is placed, the item is delivered, or the actual cost is incurred or recorded for project accounting purposes. |
| The cost management plan is a | component of the project management plan and describes how the project costs will be planned, structured, and controlled. The cost management processes and their associated tools and techniques are documented in the cost management plan. |
| Cost estimates are a | prediction that is based on the information known at a given point in time. Cost estimates include the identification and consideration of costing alternatives to initiate and complete the project. |
| The accuracy of a project estimate will increase as | the project progresses through the project life cycle. |
| A cost estimate is a | quantitative assessment of the likely costs for resources required to complete the activity. Cost estimates may be presented at the activity level or in summary form. |
| Analogous cost estimating uses the | 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. When estimating costs, this technique relies on the actual cost of previous, similar projects as the basis for estimating the cost of the current project. It is a gross value estimating approach, sometimes adjusted for known differences in project complexity. |
| Management reserves are | intended to address the “unknown unknowns” that can affect a project. The management reserve is not included in the cost baseline but is part of the overall project budget and funding requirements. When an amount of management reserves is used to fund unforeseen work, the amount of management reserve used is added to the cost baseline, thus requiring an approved change to the cost baseline. |
| Activity cost estimates are | quantitative assessments of the probable costs required to complete project work. Cost estimates can be presented in summary form or in detail. Costs are estimated for all resources that are applied to the activity cost estimate. |
| A project budget includes | all the funds authorized to execute the project. |
| The cost baseline is | the approved version of the time-phased project budget, but excludes management reserves. |
| Earned value management (EVM) is | baseline, to form the performance baseline, which helps the project management team assess and measure project performance and progress. |
| The total of the PV is sometimes referred to as | the performance measurement baseline (PMB). The total planned value for the project is also known as budget at completion (BAC). |
| Earned value (EV) is a measure of | • Earned value. Earned value (EV) is a measure of work performed expressed in terms of the budget authorized for that work. It is the 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. |
| The cost performance index (CPI) is a | The cost performance index (CPI) is a measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost. It is considered the most critical EVM metric and measures the cost efficiency for the work completed. A CPI value of less than 1.0 indicates a cost overrun for work completed. A CPI value greater than 1.0 indicates a cost underrun of performance to date. The CPI is equal to the ratio of the EV to the AC. The indices are useful for determining project status and providing a basis for estimating project cost and schedule outcome. Equation: CPI = EV/AC |
| The schedule performance index (SPI) is a | The schedule performance index (SPI) is a measure of schedule efficiency expressed as the ratio of earned value to planned value. It measures how efficiently the project team is using its time. It is sometimes used in conjunction with the cost performance index (CPI) to forecast the final 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 |
| The to-complete performance index (TCPI) is | a 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. |
| PV Planned Value | The authorized budget assigned to scheduled work. The value of the work planned to be completed to a point in time, usually the data date, or project completion. |
| EV Earned Value | The measure of work performed expressed in terms of the budget authorized for that work. he planned value of all the work completed (earned) to a point in time, usually the data date, without reference to actual costs |
| AC Actual Cost | The realized cost incurred for the work performed on an activity during a specific time period. The actual cost of all the work completed to a point in time, usually the data date. |
| BAC Budget at Completion | The sum of all budgets established for the work to be performed. The value of total planned work, the project cost baseline. |
| CV Cost Variance | The amount of budget deficit or surplus at a given point in time, expressed as the difference between the earned value and the actual cost. The difference between the value of work completed to a point in time, usually the data date, and the actual costs to the same point in time. |
| SV Schedule Variance | The amount by which the project is ahead or behind the planned delivery date, at a given point in time, expressed as the difference between the earned value and the planned value. The difference between the work completed to a point in time, usually the data date, and the work planned to be completed to the same point in time. |
| VAC Variance at Completion | A projection of the amount of budget deficit or surplus, expressed as the difference between the budget at completion and the estimate at completion. The estimated difference in cost at the completion of the project. |
| CPI Cost Performance Index | A measure of the cost efficiency of budgeted resources expressed as the ratio of earned value to actual cost. A CPI of 1.0 means the project is exactly on budget, that the 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. |
| SPI Schedule Performance Index | A measure of schedule efficiency expressed as the ratio of earned value to planned value. An SPI of 1.0 means that the project is exactly on schedule, that the work actually done so far is exactly the same as the work planned to be done so far. Other values show the percentage of how much costs are over or under the budgeted amount for work planned. |
| EAC Estimate At Completion | The expected total cost of completing all work expressed as the sum of the actual cost to date and the estimate to complete. |
| ETC Estimate to Complete | The expected cost to finish all the remaining project work. |
| TCPI To Complete Performance Index | A measure of the cost performance that must 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 budget available. |
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