0% found this document useful (0 votes)
23 views60 pages

Project Cost Management

Uploaded by

shaker nasrat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
23 views60 pages

Project Cost Management

Uploaded by

shaker nasrat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 60

PROJECT COST MANAGEMENT

Mohamed Seleam Abou Hatab


PMP, PMI-RMP, PMI-SP, PMI-PBA
Sr. Project Management Consultant
COST ESTIMATION VS. PRICING
COST ESTIMATING: ASSESSING HOW MUCH
IT WILL COST THE ORGANIZATION TO
PROVIDE THE PRODUCT OR SERVICE
Cost

Price
Profit
PRICING: Assessing how much the
organization will charge for the
product or service
2
PROJECT COST MANAGEMENT
• PROJECT COST MANAGEMENT INCLUDES THE PROCESSES INVOLVED IN ESTIMATING,
BUDGETING, AND CONTROLLING COSTS SO THAT THE PROJECT CAN BE COMPLETED
WITHIN THE

APPROVED BUDGET

• PLAN COST MANAGEMENT.


• ESTIMATE COSTS.
• DETERMINE BUDGET.
• CONTROL COSTS.
3
Project Management Process Groups
Knowledge Areas
Monitoring and Controlling Closing Process
Initiating Process Group Planning Process Group Executing Process Group
Process Group Group
4- Project Integration Management 4.1 Develop Project Charter 4.2 Develop Project Management Plan 4.3 Direct and Manage Project 4.5 Monitor and Control Project 4.7 Close Project
Work Work or phase
4.4 Manage Project Knowledge 4.6 Perform Integrated Change
Control
5- Project Scope Management 5.1 Plan Scope Management 5.5 Validate Scope
5.2 Collect Requirements 5.6 Control Scope
5.3 Define Scope
5.4 Create WBS
6- Project Schedule Management 6.1 Plan Schedule Management 6.6 Control Schedule
6.2 Define Activities
6.3 Sequence Activities
6.4 Estimate Activity Durations
6.5 Develop Schedule
7- Project Cost Management 7.1 Plan Cost Management 7.4 Control Costs
7.2 Estimate Costs
7.3 Determine Budget
8- Project Quality Management 8.1 Plan Quality Management 8.2 Manage Quality 8.3 Control Quality

9- Project Resource Management 9.1 Plan Resource Management 9.3 Acquire Resources 9.6 Control Resources
9.2 Estimate Activity Resources 9.4 Develop Team
9.5 Manage Team
10- Project Communications 10.1 Plan Communications Management 10.2 Manage Communications 10.3 Monitor Communications
Management

11- Project Risk Management 11.1 Plan Risk Management 11.6 Implement Risk Responses 11.7 Monitor Risks
11.2 Identify Risks
11.3 Perform Qualitative Risk Analysis
11.4 Perform Quantitative Risk Analysis
11.5 Plan Risk Responses

12- Project Procurement Management 12.1 Plan Procurement Management 12.2 Conduct Procurements 12.3 Control Procurements 4

13- Project Stakeholder Management 13.1 Identify Stakeholders 13.2 Plan Stakeholder Engagement 13.3 Manage Stakeholder 13.4 Monitor Stakeholder
Engagement Engagement
We are about to produce 20 tables in 20 days cost is $20 for each.
How much BAC = ???
BAC = $20 * 20 tables = $400
Today is day 4 How much is the PV ?
PV = $20 x 4 tables = $80
At day 4 I earned only 3 tables, how much is the EV ?
EV = $20 x 3 tables = $60
AC = ??? X 3 tables = $90
SV = EV – PV = 60 – 80 = -$20
CV =EV – AC = 60 – 90 = -$30
SPI = EV / PV = 60 / 80 = 0.75
CPI = EV / AC = 60 / 90 = 0.666
5
EARNED VALUE COMPONENTS
 PLANNED VALUE (PV) – OLD NAME WAS (BCWS) BUDGET COST OF WORK SCHEDULED
 EARNED VALUE (EV) – OLD NAME WAS (BCWP) BUDGET COST OF WORK PERFORMED
 ACTUAL COSTS (AC) – OLD NAME WAS (ACWP) ACTUAL COST OF WORK PERFORMED

 BUDGET AT COMPLETION (BAC)

 SCHEDULE VARIANCE (SV)


 COST VARIANCE (CV)
 SCHEDULE PERFORMANCE INDEX (SPI)
 COST PERFORMANCE INDEX (CPI)
Variance at Completion (VAC)

B AC what the total job is supposed to cost

E AC what the total job is expected to cost

VARIANCE AT COMPLETION is the difference between what the total job is


supposed to cost and what the total job is now expected to cost.

FORMULA: VAC = BAC - EAC


Example: VAC = $400 - $430 7
VAC = - $30 (negative = overrun)
EARNED VALUE (CONT.)
ACRONYM TERM INTERPRETATION OLD ACRONYM
PV (BCWS) Planned Value What is the estimated value of the work to be done? BCWS: Budgeted cost of
work scheduled

EV (BCWP) Earned Value What is the estimated value of the work actually BCWP: Budgeted cost of
accomplished? work performed

AC (ACWP) Actual Cost What is the actual cost incurred? ACWP: Actual cost of work
performed

BAC Budget at Completion How much did we BUDGET for the TOTAL JOB?

EAC Estimate at What do we currently expect TOTAL project to cost?


Completion

ETC Estimate to Complete From this point on, how much MORE do we expect to
cost to finish the project?

VAC Variance at How much MORE or UNDER budget do we expect to


Completion be at the end of the project?
Earned
EARNED Value
VALUE (CONT.)
(Cont.)

NAME FORMULA INTERPRETATION

Cost Variance (CV) CV = EV – AC NEGATIVE is over budget, POSITIVE


is under budget.

Schedule Variance (SV) SV = EV – PV NEGATIVE is behind schedule,


POSITIVE is ahead of schedule.

Cost Performance Index (CPI) CPI = EV/AC We are getting $ _____ out of every 1
$.

Schedule Performance Index (SVI) SPI = EV/PV We are only progressing at ____% of
the rate originally planned.

Estimate To Complete (ETC) EAC - AC How much more will the project cost?

Variance At Completion (VAC) BAC – EAC How much over budget will be at the
end of the project?
FORECASTING
EAC FORECAST FOR ETC AT NEW ESTIMATE
 EAC = AC+ETC
 90+ 300 = 390
EAC FORECAST FOR ETC WORK PERFORMED AT THE BUDGETED RATE
 EAC = AC+(BAC-EV )
 = 90+ (400-60)=430
EAC FORECAST FOR ETC WORK CONSIDERING BOTH SPI AND CPI FACTORS
 EAC =AC+((BAC-EV) /(CPI*SPI))
 =90 +((400 – 60 )/ (.495 )) = 770
EAC FORECAST FOR WORK PERFORMED AT THE PERCENT CPI
 EAC = BAC/ CPI
 =400 / .66 = 600
EACT FORECAST FOR THE DURATION OF THE PROJECT
 EACT = PD/SPI
 =20 / .75 = 27 DAYS
Earned
EARNED Value
VALUE (CONT.)
(Cont.)

NAME FORMULA INTERPRETATION

Estimate at Completion (EAC) As of now, how much do we expect the total project to
cost?$_____

BAC/CPI Used if no variances from the BAC have occurred or


you will continue at the same rate of spending.

AC+ETC Actual plus a new estimate for remaining work. Used


when original estimate was fundamentally flawed.

AC+BAC-EV Actual to date plus remaining work. Used when current


variances are thought to be a typical of the future.

AC+ (BAC-EV) Actual to date plus remaining budget modified by


CPIxSPI performance. Used when current variances are thought
to be typical of the future.
EXERCISE
10 MIN.
.

12
WALL CONSTRUCTION
Wall Construction
Time = 1 week per wall
Cost = $ 1,000 per wall, materials and labor
Total Schedule = 4 weeks
Total Cost = $ 4,000
Working days 5 day per week starting on
Sunday and finish on Thursday by 5 PM
Assume production is liner

13
5 pm Wednesday, Week 2

How much work should


have been completed -PV?
PLANNED Wall 1 100% = $ 1,000
Wall 2 80% = $ 800
Wall 3 0% = 0
Wall 4 0% = 0
PV = $ 1,800
5 pm Wednesday, Week 2

10 %
What is the budgeted
value of actual work - EV?
EARNED
Wall 1 100% = $ 1,000
Wall 2 50% = $ 500
Wall 3 10% = $100
Wall 4 0% = 0
50 % EV = $1,600
5 pm Wednesday, Week 2

Total Cost to date –


AC = $ 2,250
5 PM WEDNESDAY, WEEK 2
Earned Value
PV $1,800
EV $1,600
AC $2,250

Schedule Variance = EV - PV
= $1,600 - $1,800
= ($200)
Cost Variance = EV - AC
= $1,600 - $2,250
= ($650)
5 PM WEDNESDAY, WEEK 2
Performance Indices
PV $1,800
EV $1,600
AC $2,250

SPI = EV / PV
= $1,600 / $1,800
= .9
CPI = EV / AC
= $1,600 / $2,250
= .7
QUESTIONS & ANSWERS EV

1. YOU ARE A PROJECT MANAGER WORKING ON A PROJECT THAT REQUIRES 100 WIDGETS TO BE BUILT
IN FIVE WEEKS. YOU HAVE JUST BEGUN WEEK THREE, WITH AN OVERALL BUDGET OF US $10,000.
TO DATE YOU HAVE SPENT US $2,000 WITH 40 WIDGETS SUCCESSFULLY BUILT. WHAT DOES THE
COST VARIANCE TELL YOU IN THIS CIRCUMSTANCE?

A. THE PROJECT IS PROCEEDING AT 100% OF THE EXPECTED RATE


B. THE PROJECT IS GETTING $2 OF WORK FOR EVERY DOLLAR SPENT
C. THE PROJECT IS ON BUDGET
D. THE PROJECT IS $2000 UNDER BUDGET
QUESTIONS & ANSWERS EV

1. YOU ARE A PROJECT MANAGER WORKING ON A PROJECT THAT REQUIRES 100 WIDGETS TO BE BUILT
IN FIVE WEEKS. YOU HAVE JUST BEGUN WEEK THREE, WITH AN OVERALL BUDGET OF US $10,000.
TO DATE YOU HAVE SPENT US $2,000 WITH 40 WIDGETS SUCCESSFULLY BUILT. WHAT DOES THE
COST PERFORMANCE INDEX TELL YOU IN THIS CIRCUMSTANCE?

A. THE PROJECT IS PROCEEDING AT 100% OF THE EXPECTED RATE


B. THE PROJECT IS GETTING $2 OF WORK FOR EVERY DOLLAR SPENT
C. THE PROJECT IS ON BUDGET
D. THE PROJECT IS $2000 UNDER BUDGET
QUESTIONS & ANSWERS EV

2. YOU ARE A PROJECT MANAGER FOR A SMALL CONSTRUCTION PROJECT. YOUR PROJECT WAS
BUDGETED FOR US $72,000 OVER A SIX WEEK PERIOD. AS OF TODAY, YOU'VE SPENT US $22,000 OF
YOUR BUDGET TO COMPLETE WORK THAT YOU ORIGINALLY EXPECTED WOULD COST US $24,000.
ACCORDING TO YOUR SCHEDULE, YOU SHOULD HAVE SPENT US $21,000 BY THIS POINT. BASED ON
THESE CIRCUMSTANCES, YOUR PROJECT COULD BE BEST DESCRIBED AS:

A. OVER BUDGET
B. ON BUDGET
C. UNDER BUDGET
D. NOT HAVING ENOUGH INFORMATION PROVIDED
QUESTIONS & ANSWERS EV

3. A COST PERFORMANCE INDEX (CPI) OF 0.89 MEANS:

A. AT THIS TIME, WE EXPECT THE TOTAL PROJECT TO COST 89% MORE THAN PLANNED.
B. WHEN THE PROJECT IS COMPLETED WE WILL HAVE SPENT 89% MORE THAN PLANNED.
C. THE PROJECT IS ONLY PROGRESSING AT 89% OF THAT PLANNED.
D. THE PROJECT IS ONLY GETTING 89 CENTS OUT OF EVERY DOLLAR INVESTED.
QUESTIONS & ANSWERS EV

4. A SCHEDULE PERFORMANCE INDEX (SPI) OF 0.76 MEANS:

A. WE ARE OVER BUDGET.


B. WE ARE A HEAD OF SCHEDULE.
C. WE ARE ONLY PROGRESSING AT 76% OF THE RATE ORIGINALLY PLANNED.
D. WE ARE ONLY PROGRESSING AT 24% OF THE RATE ORIGINALLY PLANNED.
Questions & Answers EV

Given:
BAC = 200
AC = 120
EV = 80
CPI = 0.666
Assuming that current variances are typical of
future variances, the estimate at completion
(EAC) is:

A. 220.
B. 260.
C. 300.
D. 320.

24
Questions & Answers EV

1. Given:
BAC = 200
AC = 120
EV = 80
CPI = 0.666
Assuming that current variances are atypical , the
estimate at completion (EAC) is:

A. 120.

B. 160.
C. 300.

D. 240.

25
Types Of Costs
Direct Costs

Indirect costs

Fixed costs

Variable costs

Opportunity costs

Sunk costs

Working Capital
26
DEPRECIATION

Straight Line Depreciation


The same amount of depreciation is taken each year, A
US $ 1,000 item with a ten year useful life and no salvage
value (how much item is worth at the end of its life) would
be depreciated at US $100 per year.

Accelerated Depreciation
There are two forms of accelerated depreciation:
1.Double Declining Balance
2.Sum of the Years Digits.
They depreciate faster than straight line.
You do not have to know what these two forms means or
do any calculations.
PRESENT VALUE
 Budgeting technique that debates the future Year FV PV
0 $50,000 $50,000
value of money based on inflation, etc. 1 $35,000 $31,819
2 $15,000 $12,397
 PV = FV
Assume a 10% interest (discount rate)
(1 + r)t
PV (Year 1) = FV / (1 + r)t
FV = amount of money t years from now
=$35,000/(1 + 0.1)1
= $31,819
r = interest rate (also called “discount rate”)

t = time period
NET PRESENT VALUE (NPV)
This Means the total benefits (income or revenue) less the cost. To calculate NPV you need to
calculate the present value of each of the income and revenue figures then add up the present
values.

Income or Present Value at 10% Present Value at 10%


Time Period Costs
revenue interest rate interest rate

0 0 0 200 200

1 50 45 100 91

2 100 83 0 0

3 300 225 0 0

Total 353 291

NPV =353-291=62
NET PRESENT VALUE (NPV)
This Means the total benefits (income or revenue) less the cost. To calculate NPV you need to
calculate the present value of each of the income and revenue figures then add up the present
values.

Income or Present Value at 10% Present Value at 10%


Time Period Costs
revenue interest rate interest rate

0 0 0 200 200

1 50 45 100 91
100
2 83 100 83

3 300 225 0 0

4 100 55 0 0

5 100 45 0 0

Total 453 374

NPV =453-374=79
PAYBACK PERIOD
The exact length of time needed to recover an initial investment as calculated
from cash inflows.

Month Costs Total Cost Benefits Total Benefits


1 $5000 $5000 $0 $0
2 $5000 $10000 $0 $0
3 $8000 $18000 $0 $0
4 $5000 $23000 $5000 $5000
5 $2000 $25000 $10000 $15000
6 $0 $25000 $10000 $25000
7 $0 $25000 $10000 $35000

PAYBACK PERIOD is 6 MONTHS


Benefit Cost Ratio (BCR) INTERNAL RATE OF RETURN
(IRR)

 Compares the cost to the benefits of different  The interest (discount) rate where the present
projects. A BCR of > 1 means the benefits are value of the benefits exactly equals the costs.
grater than the costs. A BCR of < 1 means the  The higher the rate, the better the project.
costs are grater than the benefits. A BCR =1
 An IRR of 0.15 means that you expect the
means the costs and benefits are the same.
project to return an average of 15% on your
 If the BCR of project A is 2.3 and BCR of project B investment over a given time period (usually a
is 1.7 which project would you select? number of years).

The answer is A. the project with


the higher BCR
EXERCISE: ACCOUNTING STANDARDS

Project Project Choice


A B

Net present V $95.00 $75.00 A

IRR 13% 17% B

Payback 21 16 B
Period Month Month

Benefit Cost 2.79 1.3 A


Ratio
Budget
RESERVES Management reserve
+
Cost baseline
 CONTINGENCY RESERVE
 PROJECT MANAGER Contingency reserve
+
Cost estimate
 MANAGEMENT RESERVE
 TOP MANAGEMENT (SENIOR MANAGEMENT) WBS

sub1 Sub2

Work Work Work


package package package
LIFE CYCLE COSTING

LIFE CYCLE COSTING : Means that the cost of operation and maintenance phase to be
consider and manage with the project cost

PROJECT OPERATIONS AND


MAINTENANCE PHASE

costs costs
TAILORING CONSIDERATION

 KNOWLEDGE MANAGEMENT

 ESTIMATING AND BUDGETING

 EARNED VALUE MANAGEMENT

 USE OF AGILE APPROACH

 GOVERNANCE
CONSIDERATION FOR AGILE/ADAPTIVE ENVIRONMENT

 HIGH-LEVEL COST ESTIMATING

 DETAILED ESTIMATING FOR EACH PHASE (SPRINT)


Project Cost Management

38
PLAN COST MANAGEMENT
Inputs Tools & Techniques Outputs
1. Project charter 1. Expert judgment 1. Cost management Plan

2. Project manage. Plan 2. Meeting


•Schedule manage. Plan
•Risk manage. Plan 3. Data Analysis

3. Enterprise environmental
factors (EEF)

4. Organizational process
assets (OPA)
ESTIMATE COSTS

Inputs Tools & Techniques Outputs


1. Project manage. Plan 1. Expert Judgment 1. Cost estimates
•Cost manage. Plan 2. Analogous estimating
•Quality manage. Plan 3. Parametric estimating 2. Basis of estimates
•Scope baseline 4. bottom-up estimating
5. Three-point estimating 3. Project documents
2. Project documents 6. Data analysis updates
•Lessons learned register •Alternative analysis • Assumption log
•Project schedule •Reserve analysis • Lessons learned
•Resource requirements •Cost of quality register
•Risk register 7. Project management • Risk register
information system
3. (EEF) 8. Decision making
4. (OPA) •Voting
DETERMINE BUDGET

Inputs Tools & Techniques Outputs


1. Project manage. Plan 1. Expert Judgment 1. Cost baseline
•Cost manage. Plan 2. Cost aggregation 2. Project funding
•Resource manage. plan 3. Data analysis requirements
•Scope baseline •Reserve analysis 3. Project documents
2. Project documents 4. Historical info. review updates
•Basis of estimates 5. Funding limit reconciliation • Cost estimates
•Cost estimate 6. Financing • Project schedule
•Project schedule • Risk register
•Risk register
3. Business documents
•Business case
•Benefits manage. Plan
4. Agreements
2. EEF
3. OPA
S- Curve
S- Curve
Project Cost Baseline, Expenditures, and Funding Requirements
PROJECT PERFORMANCE MANAGEMENT
Cost
EAC
Data date
BAC

AC
PV CV= EV - AC
SV= EV - PV
EV
Time
CONTROL COST
Inputs Tools & Techniques Outputs
1. Project manage. Plan 1. Expert Judgment 1.Work performance info.
•Cost manage. Plan 2. Data analysis 2.Cost forecasts
•Cost baseline •Earned value 3.Change requests
•Performance measurement management 4.Project Management Plan
baseline •Variance analysis updates
2. Project documents •Trend analysis •Cost manage. Plan
•Lessons learned register •Reserve analysis •Cost baseline
3. Project funding requirements 3. To-complete performance •Performance measurement
4. Work performance data index (TCPI) baseline
5. OPA 4. Project management info. 5. Project documents updates
System • Assumption log
• Basis of estimates
• Cost estimates
• Lessons learned register
• Risk register
CONTROL COSTS: INPUTS

 COST MANAGEMENT PLAN. DESCRIBES HOW THE PROJECT COSTS WILL BE MANAGED AND CONTROLLED.

 COST BASELINE. IS COMPARED WITH ACTUAL RESULTS TO DETERMINE IF A CHANGE, CORRECTIVE ACTION, OR PREVENTIVE ACTION IS NECESSARY.

 PERFORMANCE MEASUREMENT BASELINE.. WHEN USING EARNED VALUE ANALYSIS, THE PERFORMANCE MEASUREMENT BASELINE IS COMPARED TO ACTUAL
RESULTS TO DETERMINE IF A CHANGE, CORRECTIVE ACTION, OR PREVENTIVE ACTION IS NECESSARY.

 PROJECT FUNDING REQUIREMENTS INCLUDE PROJECTED EXPENDITURES PLUS ANTICIPATED LIABILITIES.

 WORK PERFORMANCE DATA SUCH AS WHICH COSTS HAVE BEEN AUTHORIZED, INCURRED, INVOICED, AND PAID.
To-Complete Performance index
(TCPI)

• TCPI is a CPI that must be achieved


in order to meet a certain
management goal for the project
(such as BAC or EAC).
QUESTIONS

49
1- HALF WAY THROUGH THE EXECUTING PROCESSES OF YOUR
PROJECT, A TEAM MEMBER ALERTS YOU TO A POTENTIAL COST
OVERRUN FOR A SPECIFIC DELIVERABLE. WHAT DO YOU DO FIRST?
A ) DETERMINE THE PROJECTED ACTUAL COST.

B ) IMPLEMENT A CHANGE CONTROL PROCESS TO TRACK


THE CHANGE

C ) INFORM THE CUSTOMER.

D ) DETERMINE THE CAUSE OF THE OVERAGE

50
2 - WHICH TYPE OF COSTS IS TEAM TRAINING?

A ) DIRECT

B ) EV

C ) INDIRECT

D ) FIXED

51
3- A PROJECT MANAGER HAS COMPLETED A DETAILED WBS
AND COST ESTIMATES FOR EACH WORK PACKAGE. TO
CREATE A COST BASELINE FROM THIS DATA, THE PROJECT
MANAGER WOULD :
A ) USE THE HIGHEST LEVEL OF THE WBS TO ESTIMATE ANALOGOUSLY
B ) SUM UP THE WORK PACKAGE AND RISK CONTINGENCY RESERVE ESTIMATES.
C ) ROLL UP WORK PACKAGE ESTIMATES INTO A PROJECT TOTAL AND ADD
MANAGEMENTS RESERVES.

D ) GAIN EXPERT OPINIONS OF THE PROJECT COSTS. 11


52
4- YOU ARE HAVING DIFFICULTY ESTIMATING THE COST OF YOUR
PROJECT. WHISH OF THE FOLLOWING BEST DESCRIBES THE MOST
PROBABLE CAUSE OF YOUR DIFFICULTY?

A ) INADEQUATE SCOPE DEFINITION

B ) UNAVAILABILITY OF DESIRED RESOURCES

C ) LACK OF HISTORICAL RECORDS FROM PREVIOUS PROJECTS

D ) LACK OF COMPANY PROCESSES


53
5- WHICH OF THE FOLLOWING REPRESENTS THE VALUE OF
WORK WE HAVE ACTUALLY COMPLETED?

A ) EARNED VALUE

B ) PLANNED VALUE

C ) ACTUAL COST

D ) ESTIMATE TO COMPLETE

54
6- IF EARNED VALUE (EV) IS U.S.$300000, ACTUAL COST (AC)
IS U.S.$350000, AND PLANNED VALUE (PV) IS U.S.
$375000, WHAT DOES THE SCHEDULE PERFORMANCE
INDEX (SPI) INDICATE?
A ) YOU ARE PROGRESSING AT 86% OF THE RATE ORIGINALLY PLANNED.

B ) YOU ARE PROGRESSING AT 125% OF THE RATE ORIGINALLY PLANNED.

C ) YOU ARE PROGRESSING AT 116% OF THE RATE ORIGINALLY PLANNED.

D ) YOU ARE PROGRESSING AT 80% OF THE RATE ORIGINALLY PLANNED.


55
7- THE FORMULA, EAC = BAC/CPI, ASSUMES THAT:
A ) ALL SUBSEQUENT WORK WILL BE COMPLETED AT THE PLANNED EXPENDITURES.

B ) ALL SUBSEQUENT WORK WILL BE COMPLETED AT THE PLANNED EXPENDITURES,


EXCLUDING THE WORK PACKAGES CURRENTLY UNDER WAY

C ) ALL SUBSEQUENT WORK WILL BE COMPLETED BASED UPON THE COST


PERFORMANCE TO-DATE

D ) THE COST PERFORMANCE CANNOT CHANGE DURING THE PROJECT

56
8- WHAT TOOL MUST PROJECT MANAGERS RELY UPON TO
ACCURATELY IDENTIFY THE COSTS ASSOCIATED WITH THE
PROJECT?
A ) A BILL OF MATERIALS

B ) A GANTT CHART

C ) A PRECEDENCE DIAGRAM NETWORK

D ) A WORK BREAKDOWN STRUCTURE

57
9- A COST PERFORMANCE INDEX (CPI) OF 0.89 MEANS ?
A ) AT THIS TIME ,WE EXPECTED THE TOTAL PROJECT TO COST 89 PERCENT MORE THAN PLANNED.

B ) WHEN THE PROJECT COMPLETED WE WILL HAVE SPENT 89 PERCENT MORE THAN PLANNED.

C ) THE PROJECT ONLY PROGRESSING AT 89 PERCENT OF THE RATE PLANNED.

D ) THE PROJECT IS ONLY GETTING 89 CENTS OUT OF EVERY DOLLAR INVESTED.

58
10- A COST BASE LINE IS AN OUTPUT OF WHICH COST MANAGEMENT
PROCESSES:

A ) ESTIMATE ACTIVITY RESOURCE.

B ) ESTIMATE COSTS.

C) DETERMINE BUDGET.

D ) CONTROL COST.
59

You might also like