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MindMap Gallery project cost management

project cost management

Soft exam - system integration project engineer - compilation of test points for project cost management

Edited at 2020-08-08 11:48:11

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project cost management

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Outline

project cost management

process

Cost Estimate

step

Identify and analyze cost components

Estimate the cost of each account based on the identified project cost components.

Comment on cost estimate results

method

analogy estimation method

top-down estimation method

bottom-up estimation method

Parametric model estimation method

cost budget

Allocate estimated total costs to various project work items and establish a cost baseline plan to measure project performance

step

Allocate the total project cost to the various work packages of the WBS

Redistribute the costs allocated to each work package to the activities included in it

Determine the time plan for each cost budget expenditure and the cumulative budget cost corresponding to each time point, and formulate a project cost budget plan

Cost Control

Ensure that all tasks are carried out within their respective budgets

main content

Influence factors that cause cost baseline changes

Ensure change requests are approved

When changes occur, manage the actual changes

Monitor cost execution and identify deviations from cost baselines

Accurately record all deviations from the cost baseline

Prevent incorrect, inappropriate or unapproved changes from being included in cost or resource usage reports

Notify project stakeholders of approved changes

Take steps to keep overdue cost overruns within acceptable limits

Related terms

life cycle cost

Development costs Maintenance costs

Variable costs (variable costs)

Costs (such as raw materials, labor, fuel) that vary with production volume, workload, or time

fixed costs

It does not change with the production volume, workload and time. Fixed costs are mostly indirect costs. (Such as salary, fixed taxes, depreciation of fixed assets, maintenance fees, office expenses)

direct cost

All expenses that can be directly included in the cost of the product (raw materials constituting the product, wages of production workers)

management reserve

Costs are planned separately and are ready for use when unforeseen events occur in the future. Reduce the risk of deviation from cost or schedule targets

cost basis

The approved time-based cost expenditure plan, which reflects approved project cost changes at any time, is used to measure and monitor the actual execution costs of the project.

Common methods

earned value analysis

A project performance measurement method used primarily for performance measurement of actual costs.

By measuring and calculating the budgeted cost of completed work and the actual cost of completed work, and comparing it with the budgeted cost of planned work to obtain the cost deviation, the purpose is to judge the project cost and schedule execution.

three parameters

Budgeted cost of planned workload (BCWS, PV)

Actual cost of work performed (ACWP, AV)

Budgeted cost of work performed (BCWP, EV)

Mnemonic method: A stands for actual, B stands for budget, S stands for plan, P stands for completed, and C stands for cost.

four indicators

cost deviation

CV=EV-AC

CV>0 means that the actual cost of the completed work is lower than the budgeted cost

progress deviation

SV=EV-PV

SV>0 means that the progress is ahead of schedule and the actual execution cost is less than planned.

Cost Performance Index (CPI)

CPI=BCWP/ACWP

CPI<1 means that the actual cost of the completed work is higher than the budgeted cost

CPI>1 means that the actual cost of the completed work is lower than the budgeted cost

Schedule Performance Index (SPI)

SPI=BCWP/BCWS

SPI<1 means progress is delayed and the actual progress is slower than the planned progress.

Mnemonic method

The calculation formulas for CV and SV are BCWP first, CPI and SPI at the top (numerator)

If CV and SV are less than 0, it means a bad situation

If SPI and CPI are less than 1, it means a bad situation

Related comments

Completion Budget BAC

Estimated Cost of Remaining Work ETC

Atypical deviation calculation ETC=BAC-EV

Typical deviation calculation ETC=(BAC-EV)/CPI

Mnemonic: Atypical means that the estimated cost of the remaining work is correct. Typical means that the estimated cost of the unfinished work will deviate by the same proportion as the work that has been completed.

Estimate EAC at completion

EAC = AV ETC

EAC=BACAV-EV

Mnemonic: The completion estimate is equal to the budget plus the actual additional cost for the current amount of work completed.