Please enable JavaScript.
Coggle requires JavaScript to display documents.
Project Cost Management - Coggle Diagram
Project Cost Management
Cost
A resource sacrificed of foregone to achieve a specific objective or something given up in exchange.
-
Project cost management
-
Estimating costs, developing approximation of the costs of the resources needed to complete a project
-
Controlling costs, controlling changes to the project budget
Basic Principles
-
Profit, revenues - expenditures
Life cycle costing, total cost of ownership or development + support cost
Cash flow analysis, the estimated annual costs and benefits for a project and the resulting annual cash flow
Profit margin, ratio of revenues to profits
Tangible costs/benefits, those costs or benefits that an organization can easily measure in dollars
Intangible costs/benefits, costs or benefits that are difficult to measure in monetary terms
Direct costs, costs that can be directly related to producing the products and services of the project
Indirect costs, costs that are not directly related to the products or services of the project, but are indirectly related to performing the project
Sunk cost, money that has been spent in the past
Reserves
dollars included in a cost estimate to mitigate cost risk by allowing for future situations that are difficult to predict
Contingency reserves or known unknowns, allow for future situations that may be partially planned for
Management reserves or unknown unknowns, allow for future situations that are unpredictable
Types of Cost Estimates
Rough Order of Magnitude (ROM), provide estimate of cost for selection decisions
Budgetary, puts dollars in the budget plans
Definitive, provides details for purchases, estimates actual costs
-
-
-
-
-
Rate of Performance (RP)
The ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity
Cost Variance (CV), the earned value - the actual cost
Schedule Variance (SV), earned value - planned value
Cost Performance Index (CPI), the ratio of earned value to actual cost and used to estimate projected time to complete the project
Schedule Performance Index (SPI), the ratio of earned value planed and used to estimate projected time to complete the project