{"id":62541,"date":"2021-05-16T23:10:06","date_gmt":"2021-05-17T03:10:06","guid":{"rendered":"http:\/\/bangla.salearningschool.com\/recent-posts\/project-cost-management-part-1-pmp-project-management\/"},"modified":"2025-04-29T21:41:32","modified_gmt":"2025-04-29T21:41:32","slug":"project-cost-management-part-1-pmp-project-management","status":"publish","type":"post","link":"http:\/\/bangla.sitestree.com\/?p=62541","title":{"rendered":"Project Cost Management – Part 1 #PMP – Project Management"},"content":{"rendered":"

Some Concepts in Project Cost Management<\/p>\n

Costing Involves:
1. cost to purchase, develop i.e. to have the system
2. Operation cost
3. Cost to disposal<\/p>\n

Value Engineering:
Get the most from a project
–decrease cost
–increase value
–increase quality
–shorten schedule
–keep project scope not reduced<\/p>\n

COST ESTIMATING<\/b>
When cost estimation is done?
After project scope is defined, and work breakdown structure is created.But may be performed again and again over the total life cycle<\/p>\n

Tools
Analogous Estimating
Based on the similar actual projects<\/p>\n

Bottom up estimating:
Estimate cost for each activity and sum them – time consuming<\/p>\n

Parametric Estimating
1 mile road construction needs $400,000$. So 10 miles will require 10*400,000$.<\/p>\n

Reserve Analysis
A buffer cost against slippage on the project<\/p>\n

Cost of Quality
Costs required in order to get quality<\/p>\n

Output
Activity Cost Estimates<\/p>\n

COST BUDGETING<\/b>
Maps costs and dates. How much will be spent on what and when. Also termed Cost Baseline<\/p>\n

When cost budgeting is done?
After activities are defined and scheduled. Activity durations and resource requirements are also estimated. <\/p>\n

Tools
Cost Aggregation
Activity level costs should be aggregated to the work level where they will be measured, managed, and controlled.<\/p>\n

Reserve Analysis
Financial reserve to protect projects against cost overrun<\/p>\n

Parametric Estimating
Use simple straight forward formulas<\/p>\n

Funding Limit Reconciliation
Comply with the project funding. many times funds are allocated even before the scope is defined.<\/p>\n

Output
Cost Baseline
Project Funding requirements<\/p>\n

COST CONTROL<\/b>
Monitoring, controlling, adjusting costs<\/p>\n

When it is performed?
Over the whole life cycle. Bi-weekly or monthly analysis may be done<\/p>\n

Tools
Cost Change Control System
How the cost baseline may be changed<\/p>\n

Performance Measurement Analysis
Calculate Earned Value, Planned Value, Actual Cost, Estimate to complete, Estimate at Completion, Cost Performance Index and similar to measure performance and control costs based on these<\/p>\n

Forecasting
Use current and previous cost values to estimate future costs<\/p>\n

Variance Management<\/p>\n

Output
Cost Estimate Update
Cost Baseline Update<\/p>\n

Performance Measurement Analysis will be discussed later<\/p>\n

<\/p>\n

From: http:\/\/sitestree.com\/?p=4799
Categories:PMP – Project Management
Tags:
Post Data:2011-04-22 02:11:46<\/p>\n

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Some Concepts in Project Cost Management Costing Involves:1. cost to purchase, develop i.e. to have the system2. Operation cost3. Cost to disposal Value Engineering:Get the most from a project–decrease cost–increase value–increase quality–shorten schedule–keep project scope not reduced COST ESTIMATINGWhen cost estimation is done?After project scope is defined, and work breakdown structure is created.But may be … <\/p>\n

Continue reading<\/a><\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1917,187],"tags":[],"class_list":["post-62541","post","type-post","status-publish","format-standard","hentry","category-fromsitestree-com","category----project-management-basics","item-wrap"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":62738,"url":"http:\/\/bangla.sitestree.com\/?p=62738","url_meta":{"origin":62541,"position":0},"title":"Cost Estimation in Short. Part – 2: Project Cost Management #PMP – Project Management","author":"Author-Check- Article-or-Video","date":"May 20, 2021","format":false,"excerpt":"Cost Estimating in Short. Part - 2: Project Cost Management Cost Estimation in Short When cost estimation is done? After project scope is defined, and work breakdown structure is created.But may be performed again and again over the total life cycle Tools Analogous Estimating Based on the similar actual projects\u2026","rel":"","context":"In "FromSitesTree.com"","block_context":{"text":"FromSitesTree.com","link":"http:\/\/bangla.sitestree.com\/?cat=1917"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":62740,"url":"http:\/\/bangla.sitestree.com\/?p=62740","url_meta":{"origin":62541,"position":1},"title":"Cost Estimation in Details. Part – 3: Project Cost Management #PMP – Project Management","author":"Author-Check- Article-or-Video","date":"May 20, 2021","format":false,"excerpt":"Cost Estimation in Details. Part - 3: Project Cost Management (Details will be added at a later time, now in short) Cost Estimation in Short When cost estimation is done? After project scope is defined, and work breakdown structure is created.But may be performed again and again over the total\u2026","rel":"","context":"In "FromSitesTree.com"","block_context":{"text":"FromSitesTree.com","link":"http:\/\/bangla.sitestree.com\/?cat=1917"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":62736,"url":"http:\/\/bangla.sitestree.com\/?p=62736","url_meta":{"origin":62541,"position":2},"title":"Project Cost Management. Part – 1: Overview, Components, Value Engineering #PMP – Project Management","author":"Author-Check- Article-or-Video","date":"May 20, 2021","format":false,"excerpt":"Project Cost Management. Part - 1: Overview, Components, Value Engineering Some Concepts in Project Cost Management Costing Involves: 1. cost to purchase, develop i.e. to have the system 2. Operation cost 3. Cost to disposal Value Engineering: Get the most from a project --decrease cost --increase value --increase quality --shorten\u2026","rel":"","context":"In "FromSitesTree.com"","block_context":{"text":"FromSitesTree.com","link":"http:\/\/bangla.sitestree.com\/?cat=1917"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":62601,"url":"http:\/\/bangla.sitestree.com\/?p=62601","url_meta":{"origin":62541,"position":3},"title":"Part – 1: Sub Areas of Project Knowledge Areas #PMP – Project Management","author":"Author-Check- Article-or-Video","date":"May 17, 2021","format":false,"excerpt":"Project Knowledge Area - Sub Areas \u00a0 1. Project scope management Scope Plan Scope definition Work breakdown structure Scope control Scope verification 2. Project time management Activity definition Activity sequencing Activity resource estimating Activity duration Schedule development Schedule control 3. Project cost management Cost estimate Cost budgeting Cost control 4.\u2026","rel":"","context":"In "FromSitesTree.com"","block_context":{"text":"FromSitesTree.com","link":"http:\/\/bangla.sitestree.com\/?cat=1917"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":62774,"url":"http:\/\/bangla.sitestree.com\/?p=62774","url_meta":{"origin":62541,"position":4},"title":"Controlling Changes in Cost, Schedule, and Scope. Part – 3: Monitoring and Controlling #PMP – Project Management","author":"Author-Check- Article-or-Video","date":"May 20, 2021","format":false,"excerpt":"Controlling Changes in Cost, Schedule, and Scope. Part - 3: Monitoring and Controlling This is a place holder. Contents will be added soon. Please note that we have more contents after couple of posts. Hence, please keep going. \u00a0 Later we have professional responsibilities, closing the project, PMP Resources, Project\u2026","rel":"","context":"In "FromSitesTree.com"","block_context":{"text":"FromSitesTree.com","link":"http:\/\/bangla.sitestree.com\/?cat=1917"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":62744,"url":"http:\/\/bangla.sitestree.com\/?p=62744","url_meta":{"origin":62541,"position":5},"title":"Cost Budgeting in Details. Part – 5: Project Cost Management #PMP – Project Management","author":"Author-Check- Article-or-Video","date":"May 20, 2021","format":false,"excerpt":"Cost Budgeting in Details. Part - 5: Project Cost Management (Details will be added at a later time) Maps costs and dates. How much will be spent on what and when. Also termed Cost Baseline When cost budgeting is done? After activities are defined and scheduled. Activity durations and resource\u2026","rel":"","context":"In "FromSitesTree.com"","block_context":{"text":"FromSitesTree.com","link":"http:\/\/bangla.sitestree.com\/?cat=1917"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=\/wp\/v2\/posts\/62541","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=62541"}],"version-history":[{"count":1,"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=\/wp\/v2\/posts\/62541\/revisions"}],"predecessor-version":[{"id":78073,"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=\/wp\/v2\/posts\/62541\/revisions\/78073"}],"wp:attachment":[{"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=62541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=62541"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/bangla.sitestree.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=62541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}