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A Guide to Project Management

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Unformatted text preview: h as salaries for corporate executives). Indirect costs are usually calculated as a percentage of direct costs. Cost-reimbursable contracts often include incentives for meeting or exceeding selected project objectives, such as schedule targets or total cost. Time and material contracts--time and material contracts are a hybrid type of contractual arrangement that contain aspects of both cost-reimbursable and fixedprice-type arrangements. Time and material contracts resemble cost-type arrangements in that they are open ended, because the full value of the arrangement is not defined at the time of the award. Thus, time and material contracts can grow in contract value as if they were cost-reimbursable-type arrangements. Conversely, time and material arrangements can also resemble fixed-unit arrangements when, for example, the unit rates are preset by the buyer and seller, as when both parties agree on the rates for the category of "senior engineers." Contract Administration. Managing the relationship with the seller. Contract Closeout. Completion and settlement of the contract, including resolution of any open items. Control. The process of comparing actual performance with planned performance, analyzing variances, evaluating possible alternatives, and taking appropriate corrective action as needed. Control Account Plan (CAP). Previously called a Cost Account Plan. The CAP is a management control point where the integration of scope and budget and schedule takes place, and where the measurement of performance will happen. CAPs are placed at selected management points of the work breakdown structure. Control Charts. Control charts are a graphic display of the results, over time and against established control limits, of a process. They are used to determine if the process is "in control" or in need of adjustment. Corrective Action. Changes made to bring expected future performance of the project in line with the plan. Cost Budgeting. Allocating the overall cost estimates to individual work activities. Cost Control. Controlling changes to the project budget. Cost Estimating. Developing an approximation (estimate) of the cost of the resources needed to complete project activities. A Guide to the A Guide to the Project Project Management Management Body of Body of KnowledgeE L KnowledgeE PL MP AM SA S A Guide to the Project Management Body of Knowledge (PMBOK Guide) 2000 Edition 2000 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA NAVIGATION LINKS ACROYMNS LIST ACRONYMS LIST 199 ACROYMNS LIST Glossary ment ment geE L geE PL P Cost of Quality. The costs incurred to ensure quality. The cost of quality includes quality planning, quality control, quality assurance, and rework. Cost Performance Index (CPI). The cost efficiency ratio of earned value to actual costs. CPI is often used to predict the magnitude of a possible cost overrun using the following formula: BAC/CPI = projected cost at completion. CP...
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