Cost Knowledge Area

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  1. 100 percent rule
    means that a project?s work breakdown structure includes all aspects of work within the project--collected and quantified
  2. actual cost (AC)
    is the total cost incurred by completed work package. It needs to correspond to what was budgeted for in the PV in measured in the EV
  3. analogous estimating
    is an estimating technique that uses the values of parameters, such as scope, cost, budget, and duration or measures of scale such as size, weight, and complexity from a previous, similar activity as the basis for estimating the same parameter or measure for a future activity
  4. bottom-up estimating
    examines costs the project activity level
  5. breakeven analysis
    analyzes fixed costs and variable costs in regards to revenues anticipated, provides details in regard to project activities that determine where and when a project investment will break even
  6. budget
    is a planning, monitorization, and recording tool that includes estimates and final totals for a project and all its activities to ensure that costs are constrained
  7. budget at completion (BAC)
    is the sum of all the budgets established for all the work of the project, the work package, the control account, or the schedule activity. It's the total planned value for the work component or project. This figure is used in earned value analysis calculations
  8. budget forecast
    pertains to calculated estimate at completion that is indicated to Stakeholders
  9. change requests
    are part of the formal written process of making a minor or major change to project areas. Without these documents, a change cannot be implemented to any part of the project
  10. contingency reserves
    set aside funds for unplanned activities
  11. control account
    is a component used to manage costs at an activity level. Each control account receives a unique numbering sequence that ties the activities into an organization?s accounting system
  12. Control Costs
    is the process of monitoring your project status to ensure that your budget is up to date that your project?s value is being delivered to meet expectations
  13. cost accounting
    is a technique used by finance departments to calculate the cost of developing activities within a project
  14. cost aggregation
    is the process of applying work package costs and those details through control accounts to deliver a budget. It delivers cost estimates by aggregating work packages detailed within the work breakdown structure. Those cost estimates can then be aggregated up to a higher level within the work breakdown structure hierarchy and, ultimately, add up to the entire project
  15. Cost Control
    aligns to reductions in cost of a process to the application of various methods
  16. cost management
    is one of the most integral components of the project management process. Cost management plan is an input to all other cost management processes because it commonly consists of the plans, guidance, and descriptions on how to best approach or perform the other cost management processes. Contents include: Units of measure, Levels of precision, Levels of accuracy, Organizational procedures and their locations. And a few of particular importance to the next process that we are going to discuss are: Control thresholds, Rules of performance measurement, and Reporting formats
  17. cost management plan
    is an input to all other cost management processes because it commonly consists of the plans, guidance, and descriptions on how to best approach or perform the other cost management processes. Contents include: Units of measure, Levels of precision, Levels of accuracy, Organizational procedures and their locations. And a few of particular importance to the next process that we are going to discuss are: Control thresholds, Rules of performance measurement, and Reporting formats
  18. cost performance baseline
    becomes the authorized time-phase budget at completion. This budget at completion is used to monitor cost performance over the life of the project
  19. cost performance index
    measures the value of work completed compared to the cost for the work. It measures the cost efficiency for the work that has been completed within the project
  20. cost performance indicator
    is a ratio of earned value over actual cost. The equation is: CPI = EV divided by AC
  21. cost variance (CV)
    measures cost performance of a project. The formula for cost variance is: CV = EV - AC. The cost variance of a project is equal to the difference between the budget at completion and the actual dollars spend for the project. The cost variance illustrates the relationship of project performance to the expended budget
  22. critical path
    is the longest path through the project. It's made up of activities with zero float
  23. decomposition
    is a technique that helps further define activities by identifying activities aligned within work packages
  24. Delphi technique
    is used to gain consensus among a team of experts. Within this technique, experts participate anonymously and are asked a series of questions provided by a facilitator
  25. Determine Budget
    is a process of aggregating the estimated costs of project activities that drive to a baseline within the project where costs are attributed
  26. Develop Project Management Plan
    is aligned to the Planning Process Group. The project management plan and subsidiary plans will begin to develop within the planning phase and evolve over time. The project plan is a living document that will be reviewed and revised as the project moves from initiation to completion
  27. earned value
    is a measurement of the project's progress to date or the value of the work completed to date
  28. earned value (EV)
    equates to the value of work performed in terms of the budget assigned to that work. It has to be related to the planned value baseline, and it cannot be greater than the planned value
  29. earned value management
    is the most widely used method to measure a project performance. It takes into consideration project scope costs and schedule helps the project manager assess the project?s progress
  30. earned value performance
    compares baseline to actual scheduling costs performance
  31. Enterprise Environmental Factors
    are internal or external factors based on an organization?s culture that can impact, negatively or positively, project management options, such as industry or regulatory standards, organizational culture or structure and global trends or known practices.
  32. estimate at completion (EAC)
    is an earned value analysis technique that forecasts the expected total cost of a work component, the schedule activity, or the project at its completion
  33. Estimate Cost
    is the process of developing approximations for monetary resources required to complete project activities. Depending upon the project size, cost estimating may be coincidental to budgeting; this is especially true of projects that are smaller in scope
  34. estimate to completion (ETC)
    is an earned value analysis technique that determines the additional expected costs to complete the schedule activity, WBS component, or control account (or project). This is typically calculated in a bottom-up manner
  35. expert judgment
    is knowledge functioning as a project management tool that aids the project manager and project team by providing necessary details and skills on different subject matters
  36. forecasting
    permits a project manager to gain insight on how the project may progress. A Project manager can develop a forecast that illustrates the EAC, but due to the project performance and estimate activity, EAC may differ from the budget at completion
  37. functional requirements
    provide specific details about how the product of the project will work. Based on these requirements, activities will be identified for development to complete a work package that will meet the needs of the project
  38. funding limit reconciliation
    pertains to the availability of funding for the project based upon constraints
  39. historical relationships
    are most typically aligned to parametric and analogous estimates, involve using project parameters to develop models that protect project costs
  40. human resource management plan
    provides guidance relative to defining, staffing, managing and ultimately releasing project resources. Because this is a subsidiary plan, it also serves the develop project management plan process. The human resource management plan includes: Roles and responsibilities that detail the function assigned or assumed; the level of authority and autonomy that the project manager and team is expected to work by; the degree of responsibility for assigned duties and tasks allocate to team members and the skills and competencies required to complete assigned activities
  41. key stakeholders
    are individuals or a group whose decisions and actions will directly impact the project.
  42. lifecycle
    focuses on the entire process of building project deliverables
  43. management reserves
    are for unplanned changes to the project scope and, ultimately, costs. Management reserves are typically not a part of a project's cost baseline, and should be incorporated into the total project budget
  44. organizational process assets
    are an accumulation of tools, processes, and techniques that are retained by the business in order to standardize processes and practices
  45. parametric estimating
    is also known as by the numbers. It refers to statistical relationships between historical data and other information that help calculate cost, budget, and duration estimates
  46. performance measurement baseline (PMB)
    is the total of the project?s planned values
  47. performance reviews
    compare cost performance over time, schedule or work packages, budget over and under runs and estimated funding to complete the project
  48. Plan Cost Management
    is the process implemented to determine and update policies, approaches, procedures, plans, process flows, and other documentation
  49. planned value (PV)
    is the budget assigned to a work package to be accomplished
  50. Program Evaluation and Review Technique (PERT)
    uses expected value?or weighted average?of critical path tasks to determine project duration by establishing three estimates: most likely, pessimistic, and optimistic. The formula for PERT is optimistic + pessimistic + (4 * most likely) / 6. PERT is used when activity duration estimates are highly uncertain
  51. progressive elaboration
    is the accumulation of knowledge over time that is applied repeatedly, which results in the individual gaining different levels of experience
  52. project
    is a temporary endeavor with a defined beginning and end, undertaking to meet unique goals and objectives, typically to bring about beneficial change or added value
  53. Project Charter
    describes a project in the initial approach toward the project's product. Helps illustrate what needs to be accomplished and provides a preliminary approach on how the project will proceed
  54. Project Cost Management
    is comprised of the Plan Cost Management, Estimate Costs, Determine Budget, and Control Costs processes. Inputs, tools and techniques, and outputs of this knowledge area function together to ensure that the project stays under budget. It entails processes that break down requirements to the activity level, where control accounts can monitor expenditures
  55. project funding requirements
    are derived from the cost baseline; it will include all project expenditures, plus ancillary liabilities
  56. Project Management Office (PMO)
    provides organizational focus for the management of projects within a performing organization using program and/or portfolio structures to manage project relationships
  57. Project Management Plan
    is the document detailing all aspects of a project including baselines that are referenced throughout the project?s lifecycle to keep the project on track
  58. project manager
    is the individual charged with managing a temporary endeavor from beginning to end who monitors project progress and ensures that project activities stay on task, under budget, and finishes on time
  59. project net present value
    factors discount rates into project deliverables over time, help the project team determine the value of a project based upon the cost of money today
  60. project scope baseline
    incorporates project assumptions into the scope of a project. It contributes to the development of the project Work Breakdown Structure which, in turn, can serve as an analytical tool to help determine risk at the summary, control account, and work package levels
  61. project team
    refers to a group of people brought together to work toward achieving a common goal to work on the project deliverables
  62. reserve analysis
    addresses the project budget and serves to ensure that negative impacts to a project have ample funding to cover the risk. Can be established for both contingency reserves and management reserves within the project
  63. resource calendars
    are used to determine which resources, as part of the project team, are available to work on specific activities
  64. risk
    refers to the potential external events that will negatively impact a project?s progress
  65. risk log
    is another method used to help determine the level of risk and manage it. The log can be a spreadsheet based template that aligns to the project schedule and details activities within each work package
  66. risk register
    helps the project team determine and allocate costs against risks identified while reviewing activities within the work breakdown structure
  67. rough order of magnitude
    is a framework to guide near-term activity through what will deliver a more specific estimate
  68. schedule performance index
    measures progress achieved compared to progress planned. It is used to forecast project completion estimates. SPI = EV divided by PV. The schedule performance index provides a measurement of the project work performed along the project?s critical path taken help determine whether project will complete ahead of schedule, behind schedule or on schedule
  69. schedule variance (SV)
    measures the project schedule performance will. The formula for schedule variance is: SV = EV - PV. The schedule variance can help illustrate when a project is falling behind its baseline schedule
  70. (project) sponsor
    is the individual or group outside the project team that initiates the project by requesting for the service or product and beginning the project charter
  71. subject matter experts (SMEs)
    are individuals with knowledge on a specific topic or trade who provide details that can be used in expert judgment; it?s knowledge sharing
  72. three-point estimates
    is also known as the PERT technique
  73. To-complete performance index (TCPI)
    is a calculated projection of course performance on work that has to be completed in order to meet a specific goal
  74. top-down estimating
    provides estimates for high-level activities such as documentation configuration and design without knowing details at the activity level. Top-down estimating is most useful at the early stages of development, when specific activity details may not be required
  75. trend analysis
    examines performance over time to indicate deterioration or improvement
  76. variance analysis
    is used with earned value management compares actual project performance to planned or expected performance most frequent analysis pertains to costs and schedule
  77. vendor data analysis
    is another method of determining project cost based upon responses provided by vendors that are deemed to be qualified
  78. work breakdown structure (WBS)
    gives the project manager and team the ability to decompose project-based features to their lowest elements that can be monitored, managed, measured, and delivered upon. Details developed within the WBS permit the project manager to determine the project's critical path and schedule, and provide a tool to develop and deliver project metrics
  79. work performance measurements
    equate to the calculations for cost variance, schedule variance, cost performance index and schedule performance index as they relate to work packages within the WBS
Author:
jridoret001
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314722
Card Set:
Cost Knowledge Area
Updated:
2016-01-26 02:52:03
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PMP Cost Knowledge Area
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LearnSmart PMP Course glossary items Cost Knowledge Area
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