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What is value analysis?
Finding a less costly way to do the same work.
What is cost risk?
Cost related to risk.
Name the types of costs:
- Variable cost
- Fixed cost
- Direct cost
- Indirect cost
What are examples of variable cost?
cost of materials, supplies, and wages
What are examples of fixed cost?
Cost of set-up, rent, utilities, etc.
What are examples of direct cost?
- Team travel
- Team wages
- Cost of materials used on the project
What are examples of Indirect cost?
- Fringe benefits
- Janitorial services
Name the 3 ranges of estimates:
- Rough Order of Magnitude (ROM) Estimates
- Budget Estimates
- Definitive Estimates
What is the range of Rough Order of Magnitude (ROM) Estimate?
-25% to +75%
What is the range of a Budget Estimate?
-10% to +25%
What is the range of Definitive Estimates?
5% to +10%
What is Life cycle costing?
Involves looking at costs over the entire life of the product, not just the cost of the project to create the product.