A Guide to Project Management

Means using the actual cost of a previous similar

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Unformatted text preview: esponses to cost variances can cause quality or schedule problems, or produce an unacceptable level of risk later in the project. A Guide to the A Guide to the Inputs .1 .2 .3 .4 Cost baseline Performance reports Change requests Cost management plan 7.4.1 Inputs to Cost Control .1 Cost baseline. The cost baseline is described in Section 7.3.3.1. .2 Performance reports. Performance reports (discussed in Section 10.3.3.1) provide information on project scope and cost performance, such as which budgets have been met and which have not. Performance reports may also alert the project team to issues that may cause problems in the future. .3 Change requests. Change requests may occur in many forms--oral or written, direct or indirect, externally or internally initiated, and legally mandated or optional. Changes may require increasing the budget or may allow decreasing it. .4 Cost management plan. The cost management plan is described in Section 7.2.3.3. Project Project Management Management Body of Body of KnowledgeE L KnowledgeE PL .1 Cost change control system .2 Performance measurement .3 Earned value management (EVM) .4 Additional planning .5 Computerized tools .1 .2 .3 .4 .5 .6 Tools & Techniques Outputs Revised cost estimates Budget updates Corrective action Estimate at completion Project closeout Lessons learned MP AM SA S 7.4.2 Tools and Techniques for Cost Control .1 Cost change control system. A cost change control system defines the procedures by which the cost baseline may be changed. It includes the paperwork, tracking systems, and approval levels necessary for authorizing changes. The cost change control system should be integrated with the integrated change control system, discussed in Section 4.3. .2 Performance measurement. Performance measurement techniques, described in Section 10.3.2, help to assess the magnitude of any variations that do occur. Earned Value Management (EVM), described in Sections 7.4.2.3 and 10.3.2.4, is especially useful for cost control. An important part of cost control is to determine what is causing the variance and to decide if the variance requires corrective action. 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 91 ACROYMNS LIST Chapter 7--Project Cost Management 7.4.2.3 | 7.4.3.6 .3 Earned value management (EVM). All EVM Control Account Plans (CAPs) must continuously measure project performance by relating three independent variables: 1) The Planned Value, the physical work scheduled to be performed, including the estimated value of this work (previously called the Budgeted Costs for Work Scheduled [BCWS]), as compared against the 2) The Earned Value, physical work actually accomplished, including the estimated value of this work (previously called the Budgeted Costs for Work Performed [BCWP]), and to the 3) Actual Costs incurred to accom...
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