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Tổng hợp các khái niệm cần nắm về lĩnh vực Project Cost Management (Chapter 07) trong kỳ thi PMP

Chapter 07: Project Cost Management

Có 4 Quy trình trong Project cost management:

  1. Plan cost management (Output: Cost management plan)
  2. Estimate costs (Output: Activity cost estimates + Basic of estimate)
  3. Determine budget (Output: Cost baseline (Cost performance baseline) + Cost budget (Project funding requirements))
  4. Control costs (Output: WPI (Work Performance Information) + change requests + cost forecasts)

 

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  1. Cost: are estimated for all resources that will be charged to the project, including labor, material, equipment, services, facilities,… as well as an inflation allowance or contingency costs.
  2. Plan Cost Management 7.1 (P): Establishes the policies, procedure, and documentation for planning, managing, expending, and controlling project cost. Provides guidance and direction on how the project cost will be managed throughout the project. Output: Cost management plan
  3. Cost Management Plan (O): Describes how the project cost will be planned, structured, and controlled.
    1. The cost management processes and their associated tools and techniques are documented in the cost management plan.
    2. Cost management plan can establish as the following:
      • Units of measure: unit used in measurements is defined for each of the resources, such as staff hours, staff days, currency form…
      • Level of precision: Activity cost estimates will be rounded up or down based on the scope of activities and how big of the project.
      • Level of accuracy: The acceptable range (eg: +- 10%) used in determining realistic activity cost estimates, an amount for contingencies.
      • Organizational procedures links: The WBS component used for the project cost accounting is called the control account. Each control account is assigned an account number which links directly to the accounting system.
      • Control threshold: Variance thresholds for monitoring cost performance. Typically expressed as percentage deviations from the baseline plan.
      • Rules of performance measurement: Define the points measurement, control account, and the tracking methodologies; and reporting formats.
  4. Estimate Costs 7.2 (P): Developing an approximation of the monetary resources needed to complete project activities. Cost Estimate is made for each activity by a prediction base on the info known at a given point in time. Determines the amount of cost required to complete project work. Output: Activity cost estimates + Basic of estimate
  5. Scope Baseline (I) = Project Scope Statement + WBS + WBS Dictionary
  6. Analogous Estimating (Top-down) (TT): less accurate: -50% to +50% range
  7. Parametric Estimating (TT): use a statistical relationship between historical data and other variable to calculate an estimate for activity  parameters, such as cost, budget, duration. Higher level of accuracy than Analogous Estimating.
  8. Bottom-up Estimating (TT): detailed estimating is done for each activity (if available) or WP (if activities are not defined), and then rolled up into control accounts and into an overall project estimate. To do this estimate well… requires an accurate and detailed WBS.
  9. Three point Estimate: Adds estimation of uncertainty and risk to cost estimate to improve accuracy.
    • Use a weighed average of three estimates: Ce = (Co + 4Cm + Cp)/6
  10. Reserve Analysis (TT): also called Contingency Reserves/Allowances to Wp.
  11. CoQ Cost of Quality (TT): Cost of making the project’s product work properly and fixing it when it does not. CoQ is how much money it takes to do the project right.
    1. Cost of Conformance = Preventing defects + Appraisal of product quality
    2. Cost of Non-Conformance = Internal Failures + External Failures
  12. Vendor Bid Analysis (TT): analysis of what an appropriate cost for the project should be, based on bids from qualified vendors.
  13. Group Decision Making (TT): Brainstorming, Delphi, Nominal…..
  14. Activity Cost Estimates (O): are quantitative assessments of the probable cost required to complete project work which includes all activities in your activity list. Should:
    • Be traceable to WBS work package items
    • Show all unit costs, pricing factors, and resource quantities
    • Document all assumptions
  15. Basis Cost Estimates (O): supporting detail just like the WBS has a WBS dictionary. Includes:
    • Basis of the estimate (eg: how it was developed)
    • All assumptions made
    • Any known constrains
    • The range of possible estimates (eg: 1000$+/-10%)
  16. Determine Budget 7.3 (P): Aggregating the estimated cost of individual activities or WP to establish an authorized cost baseline, which includes all authorized budgets, but excludes Management reserves. Output: Cost baseline (Cost performance baseline) + Cost budget (Project funding requirements)
  17. Agreements (I): Applicable agreement information and costs relating to products, services, or result that have been or will be purchased are included when determining the budget (known as Contract).
  18. Cost Aggregation (TT): “Activity Cost Estimates” are aggregated by various project activities along with any contingency reserves for these activities are aggregated into their “WP Cost Estimates”.
    • Then “WP Cost Estimates” along with any contingency reserves estimated for the WPs, are aggregated into “Control Accounts” (Links to account system)
    • The summation of the control accounts make up the “Cost Baseline”
    • Management Reserves are added to the cost baseline to produce the “project budget”
  19. Reserve Analysis – Management Reserve (TT): “Unknown-unkown”, Use to counteract unforeseen changes to scope or cost; Not part of project cost baseline or Earn Value calculations (Part of Project Budget); Authorized by Senior Management.
  20. Reserve Analysis – Contingency Reserve (TT): “Known-Unknown”; Used to plan for risk events; Part of Project Cost Baseline. But not use to compensate poor planning (Not Part of Project Budget); Authorized by PM.
  21. History Relationship (TT): Both the cost and accuracy of analogous and parametric models can vary widely. They are most likely to be reliable when:
    • Historical information used to develop the model is accurate.
    • Parameters used in the model readily quantifiable.
    • Models are scalable such that they work for a large project, a small project and phases of a project.
  22. Funding Limit Reconciliation (TT) (Related To Cash Flow): Reconcile expenditure of funds with any limits on the funds committed to the project.
    • Funds are typically disbursed shortly before the start of the fiscal year. They can be used only to pay invoices related to work completed in the same fiscal year.
    • Unused funds expire at the end of the fiscal year, any overrun must be accomplished through additional fund disbursed in the same fiscal year.
  23. Cost Performance Baseline = Cost Baseline (O) = BAC = Project Cost (Estimated) + Contingency Reserves
  24. Project Budget = Cost Baseline + Management Reserves
  25. Project Funding Requirements (O): total funding requirements and periodic funding requirements (quarterly, annual…) are derived from the cost performance baseline.
    • The total funds required always higher than the project cost baseline’s S-Curve, as the total funds included the cost baseline plus management reserves if any.
  26. Control Costs 7.4 (P): Monitoring the status of the project to update the project budget and managing changes to the cost baseline. Project cost control seeks out the causes of positive and negative variances and is part of the Perform Integrated Change Control Process. Output: WPI + change requests + cost forecasts
  27. EVM Earned Value Management (TT): is the most common tool which help project managers measure project performance and determine where the project stands in relation to the budget and the schedule at a point in time.
    • BAC (Budget At Completion – Cost Baseline): How much money you’ll spend on the project. Total amount of budget that you have for your project.
    • PV (Planned Value – Value of work schedule): is the authorized budget assigned to the work to be accomplished for an activity or WBS component. The total planned value for project is also known as BAC when planned complete 100%.
    • EV (Earned Value – Value of work performed): is the value of work performed expressed in terms of the approved budget assigned to that work for an activity or WBS component… EV is often used to describe the % completion of a project.
    • AC (Actual Cost – Spent Cost): is the total actually incurred and recorded in accomplishing work performed for an activity or WBS Component.
    • SPI – Scheduled Performance Index: Whether you’re behind or ahead of schedule (SPI = EV/PV)
      • SPI>1, you are ahead of schedule
      • SPI<1, you are behind schedule
    • SV – Schedule Variance: How much ahead or behind schedule you are (SV = EV – PV)
      • SV >0, how many dollars you’re ahead schedule
      • SV <0, how many dollars you’re behind schedule
    • CPI – Cost Performance Index: Where you’re within your budget or cost. (CPI = EV/AC)
      • CPI > 1, you are under budget.
      • CPI < 1, you are over budget.
    • CV – Cost Variance: How much about or below your budget you are (CV=EV-AC)
      • CV > 0, how many dollars you are under budget.
      • CV < 0, how many dollars you are over budget.
  28. Forecasting (TT):  for extrapolating current performance data to create an estimate of future project performance.
    • ETC – Estimate To Complete: tells you how much more money you’ll probably spend on you project.
    • EAC – Estimate At Completion: predict what your project will actually cost when it’s complete.
    • VAC – Variance at Completion: Over or Under budget.
    • Formula:
      • EAC = AC + ETC (Orignal estimating assumptions no longer valid)
      • EAC = AC + BAC -EV (Current Variance aren’t atypical; similar variances will not occur in the future)
      • EAC = AC + (BAC-EV)/CPI (Current Variance are typical of future variances)
      • ETC = EAC – AC
      • VAC = BAC – EAC
  29. TCPI To-Complete Performance Index (TT): answers the question”How efficiently are you using your remaining resources?” and “How well your project must perform to stay on budget?
    • 2 Methods:
      • Base on BAC: TCPI = (BAC-EV)/(BAC-AC)
      • Base on EAC: TCPI = (BAC-EV)/(EAC-AC)
  30. Performance Review (TT): Compare cost performance over time, schedule activities or Wps over-running and under-running the budget, and estimated funds needed to complete work in progress.
    • If EVM is used, the following determined:
      • Variance analysis: compare actual project performance to planned or expected performance (SV & CV)
      • Trend Analysis: Examines project performance over time to determine if performance is improving or deteriorating (EAC vs BAC)
      • Earned Value Performance: compares the baseline plan to actual schedule and cost performance (CPI & SPI)
      • 3 EVM Dimensions: PV, EV, AC
  31. Life Cycle Cost: cost of the whole life of the product, not just the cost of the project.
    • Life Cycle Cost = Project Cost + Operation Cost + Maintenance Cost.
  32. Value Analysis (Value Engineering): find the less costly way to do the same work.
  33. Cost can be either:
    1.  Variable or Fixed:
      1. Variable Cost: cost that change with the amount of production or the amount of work. Eg: cost of material, supplies, wages…
      2. Fixed Cost: Cost that do not change as production changes. Eg: setup, rental…
    2. Direct or Indirect:
      1. Direct Cost: cost that are directly attributable to the work on the project. Eg: Team travel, team wages, recognition, cost of material used on the project
      2. Indirect cost: overhead items or costs incurred for the benefit of more than one project. Eg: taxes, fringe benefits and janitorial services.
  34. Accuracy Level of Estimate Type:
    • ROM – Rough Order of Magnitude Estimate: -25% – +75% (initiation phase, approximation without detailed data)
    • Preliminary Estimate: -15% – +50%
    • Budget Estimate: -15% – +25% (Planning phase, initial funding to gain the project approval)
    • Definitive Estimate: -5% – 10% (Planning phase, Detailed data, Most expensive to create – Bottom-up estimating)
    • Final Estimate: 0%

 


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