1DAY32AgendaDay3•CostManagement•QualityManagement•Self-Study3UNIT5:CostManagement4Overview•Difficultformosttesttakers•Coversabroadrangeofcosttopics•EarnedValueistestedheavily•Donothavetobeanaccountant–Costissuesarefromtheprojectmanagersperspective•Calculatorassignedbythetestingcenter5Processes1.CostEstimating2.CostBudgeting3.CostControl61.CostEstimating•Involvesdevelopinganestimateofthecostoftheresourcesneededtocompletetheproject•Resources–Labor–Equipment–Materials–Etc•CostvsPrice71.CostEstimatingInputs•WBS,StaffingManagementPlanCarpenterRooferBuildGazeboShingleFrame81.CostEstimatingTools•AnalogousestimatingEstimatebasedonsimilarprojects.AlsocalledTop-downestimating.WhatwillitcosttobuildHousePlanB?HousePlanB91.CostEstimatingTools•Determineresourcecostrates–Laborcostperhour–Equipmentcostperday$100/hr$200/day101.CostEstimatingTools•Bottom-upestimating$1,400$400$1,000CarpenterRoofer$100/hr$80/hr111.CostEstimatingTools•ParametricestimatingUsessomefactororformula.Examples:BuildingaHouse:CostperSquareFootPavingaRoad:CostperLanemile121.CostEstimatingTools•ProjectManagementSoftwareAllowsfor“Whatif”games.SupposewereplacetheditchdiggerswithaBackhoeandoperator.Howwouldthisaffectourprojectcost?131.CostEstimatingTools•ReserveAnalysisContingencyandManagementReserves14ReserveFunds$400$56015ReserveFunds$400$560KnownRisk16ReserveFunds$400$560KnownRisk$20020%$4017ReserveFunds$400$560KnownRisk$20020%$40Contingency18ReserveFunds$440$560KnownRisk$20020%$40Contingency$100019ReserveFunds$440$560KnownRisk$20020%$40Contingency$100020ReserveFunds$440$560KnownRisk$20020%$40Contingency$1000UnknownRisk-MgmtReserve10%or$100=$110021PricingProjectCost=$1100PlusMargin:Overhead200Profit100----------------------------------Price$1400221.CostEstimatingOutput•ActivityCostEstimatesActivityA$1000ActivityB$2500ActivityC$1500232.CostBudgeting•Involvesallocatingcosttotheworkitems•Aggregatingcosttodeterminetheprojectbudget•EstablishingtheCostBaseline242.CostBudgeting•Inputs...
