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John Bird 15014892 Assessment Answers Manage Project Cost – BSBPMG514 Assessment Task 1 – Questioning Question 1 Project Cost Management is a series of activities for estimating, allocating, and controlling costs within the project. It allows determining and approving budget for the project and controlling spending. For example, in construction project cost management it is vital to estimate cost of materials, equipment, salary of workers, etc. In IT project cost management, it is critical to estimate cost of software development, salary of IT staff, etc. Following are the methods used for costing a project and conducting a cost analysis: 1. Bottom-up Estimating: The Bottom-up Estimating technique is also known as the “definitive technique”. This estimation technique is the most accurate, time- consuming, and costly technique for estimating the cost. In this technique, the cost of each single activity is determined with the greatest level of detail at the bottom level and then rolls up to calculate the total project cost. 2. Parametric Estimating: Like Analogous Estimating, Parametric Estimation uses historical data to calculate cost estimates, however, it also utilizes statistical data. It takes variables from similar projects and applies them to the current project. Following are the tools used for costing a project and conducting a cost analysis: 1. Microsoft Project : Many smaller businesses can’t afford a larger enterprise level cost management software solution. Microsoft Project, while primarily focused on project management, still provides a large measure of cost estimating and management functionality that is especially useful for the small business focused on the individual project. Project’s easy integration with the rest of the Microsoft Office software suite includes Excel, as well as other popular small business accounting apps, makes it a valid option for doing cost management on the cheap. 2. aPriori : aPriori provides enterprise-level cost management solutions for businesses in the manufacturing industry. Their primary product offers the ability to perform real-time cost analysis throughout the product lifecycle, from the design stage all the way through production. The software’s analytical capabilities shine a light on opportunities for quantifiable cost savings in material and labor when comparing alternative designs, manufacturing processes, or material sources. Issue date: 18/10/2016 Page 1 of 23
John Bird 15014892 References: - management/ - the-best-cost-management-software-solutions/ -–-definition- process-and-software/

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