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TOPIC 7 (PROJECT COST MANAGEMENT (PCM) (Life Cycle Costing (Recall:…
TOPIC 7
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ESTIMATE COSTS
Costs that are charged at estimated value e.g Labor, Materials, Equipment, Services, Facilities, Inflation
Variable Costs (Wages, Material Cost) vs Fixed Costs (Set-up, Rental)
Direct Costs (Team Wages) vs Indirect Costs (Taxes, Meeting Rooms)
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BOTTOM-UP ESTIMATING
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Accurate and gain buy-in from the team, but time-consuming and expensive
PARAMETRIC ESTIMATING
Quantity of labor/material x cost per unit labor/material e.g Cost of house cleaning = hours of cleaning x labor cost per hour
VENDOR BID ANALYSIS
Get contractors to do the job! Evaluate those bids from contractors and choose one to estimate the cost
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COST OF QUALITY (COQ)
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Example: buying a measuring instrument to make sure the product is within the specified tolerance is COQ
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COST BASELINE (Outputs)
Approved version of time-project budget, exc. any management reserves
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DON'T FORGET PAGES 31-46, 50