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cost management (estimate costs (TT: three-point estimating (triangular…
cost management
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rough order of magnitude (ROM): -25% to +75%. rough estimate. launch in 5-6 yr. initial stage 1
define estimates: -5% to +10%. accurate estimate. launch in 1 yr. stage 2
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cost type
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PM 2nd controllable cost
materials, wages
PM most-controllable cost
rates,, wages, material
PM 3rd controllable cost
taxes,fringe benefits
PM most-uncontrollable cost
fixed assets, capex
Q: run $1B project, out of budget by $10K, project sponsor not approve. which factor -> not approve $10K?
A: sunk or fixed cost
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O: cost baseline
project budget >> mgt reserve | cost baseline
control accounts (sum of all modules = BAC)
cost baseline >> contingency reserve | work package cost estimates
work package cost estimates >> activity contingency reserve | activity cost estimates
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