Project Cost Management.txt

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Project Cost Management.txt
2011-04-01 16:43:35
PMP Cost Management

PMP Exam - Project Cost Management
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  1. Cost, Scope, and Time should be quantified/planned in what order?
    Scope, then time, then cost
  2. What is "Life-Cycle Costing"?
    It is the practice of looking at total cost of ownership, including purchase or creation, operation, and disposal.
  3. What is "Value Engineering"?
    It's the practice of squeezing every ounce of value out of a project - improving quality, decreasing cost, shortening schedule, etc - without reducing cost.
  4. Put these processes in order: Estimate Activity Resources, Create WBS, Estimate Costs, Define Scope, Estimate Activity Durations, Define Activities.
    Define Scope, Create WBS, Define Activities, Estimate Activity Resources, Estimate Activity Durations, Estimate Costs
  5. What are the 5 levels/accuracies of estimates?
    • Order of Magnitude: -50% to +100%
    • Conceptual: -30% to +50%
    • Preliminary: -20% to +30%
    • Definitive: -15% to +20%
    • Control: -10% to +15%
  6. What are the 4 key inputs to Estimate Costs?
    • Scope Baseline
    • Project Schedule
    • Human Resource Plan
    • Risk Register
  7. What are some of the tools used in Estimate Costs?
    • Analogous Estimating
    • Parametric Estimating
    • Bottom-Up Estimating
    • Three-Point Estimates
    • Reserve Analysis
    • Cost of Quality
    • PM Estimating Software
    • Vendor Bid Analysis
  8. What are the 2 key outputs from Estimate Costs?
    • Activity Cost Estimates
    • Basis of Estimates (supporting detail for estimates)
  9. What is PMI's concept of a budget?
    A budget takes cost estimates and maps them back to the calendar, to help track expected cash flows over the life of the project.
  10. What is the correct order for: Determine Budget, Develop Schedule, Estimate Costs?
    Develop Schedule, Estimate Costs, Determine Budget
  11. What are the 3 key inputs to Determine Budget?
    • Activity Cost Estimates (and basis for estimates)
    • Scope Baseline (to tie budget to WBS)
    • Project Schedule
  12. What are the 3 key tools for Determine Budget?
    • Cost Aggregation
    • Reserve Analysis
    • Funding Limit Reconciliation
  13. What are the 2 key outputs from Determine Budget?
    • Cost Performance Baseline (aka Budget)
    • Project Funding Requirements
  14. How are Project Funding Requirements different from the budget (aka cost performance baseline)?
    The budget is more granular and maps back to specific activities. Project funding requirements are larger flows of funds for the purposes of management approval of project costs.
  15. At what point in the project is the Control Costs process executed?
    Throughout the entire life of the project. Also, the frequency may increase during periods of higher expenditure (like construction).
  16. What are the 3 key inputs to Control Costs?
    • Project Management Plan (Cost Performance Baseline)
    • Project Funding Requirements
    • Work Performance Information
  17. What are the 4 key tools used in Control Costs?
    • Earned Value Measurement (ex: CV & CPI)
    • Forecasting (ex: ETC & EAC)
    • TCPI - To-Complete Performance Index
    • Variance Analysis
  18. What are the 3 key outputs from Control Costs?
    • Work Performance Measurements (ex: CV, SV, CPI, SPI, CPIC)
    • Budget Forecasts (ex: ETC, EAC)
    • Change Requests