Ch 9 Cost Planning and Performance

Ch 9 Cost Planning and Performance - Ch 9 Cost Planning and...

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Ch 9 Cost Planning and Performance Objective Cumulative actual amount spent since the start of the project Cumulative earned value of the work performed since the start of the project Cumulative budgeted amount planned to be spent, based on the project schedule, from the start of the project Project Cost Estimates Cost planning starts with the proposal of the project Cost section of proposal includes estimate costs of o Labor o Materials o Subcontractors and consultants o Equipment and facilities rental o Travel o Contingencies Cost estimates must be aggressive, but realistic Project Budgeting Involves two steps o The project estimate is allocated to the various work packages in the project WBS o The budget for each work package is distributed over the duration of the work package so that it is possible to determine how much of its budget should have been spent at any point in time Allocating the total budgeted cost o Max value on CBC curve o Total Budgeted Cost for each work package is established by allocating total project costs for the various elements to the appropriate work packages in the WBS o Two approaches to establishing the TBC: Top down approach in which total project costs are reviewed in relation to the work scope for each work package and a proportion of the total project cost is allocated to each work package Bottom down approach which is based on an estimate of the costs for the
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This note was uploaded on 01/02/2012 for the course ENCE ence320 taught by Professor Cable during the Spring '11 term at Maryland.

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Ch 9 Cost Planning and Performance - Ch 9 Cost Planning and...

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