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IT: 301 Topic 1 .As you learned earlier, project managers are...

IT: 301 Topic 1 .As you learned earlier, project managers are expected by customers and stakeholders to deliver a definitive and functional cost estimate in a timely manner. How do project managers do this? Good question. As you read, there are three levels of estimation in a project: the WAG, the SWAG, and the "you bet your job on this figure" estimates. Actually, they are referred to in industry as, the "Order of Magnitude" the "Budget," and the "Definitive" cost estimates. The PMBOK addresses them under Analogous, Parametric, and Bottom-up estimates respectively (PMBOK section 6.5.2). Explain which of the three is used where in the project lifecycle.



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Topic 1: Project Costs How do you estimate project costs? As you learned earlier, project managers are expected by customers and stakeholders to deliver a definitive and functional cost estimate in a timely manner. How do project managers do this? Good question. As you read, there are three levels of estimation in a project: the WAG, the SWAG, and the “you bet your job on this figure” estimates. Actually, they are referred to in industry as, the “Order of Magnitude” the “Budget,” and the “Definitive” cost estimates. The PMBOK addresses them under Analogous, Parametric, and Bottom-up estimates respectively (PMBOK section 6.5.2). Explain which of the three is used where in the project lifecycle. Project costs are estimated for several reasons. It allows you to weigh estimated benefits against expected costs to see whether the project makes sense. It allows you to see whether the necessary funds are available to support the project. It allows serves as a guideline to help ensure that you have sufficient funds to complete the project. Topic 2 - Why should you know how to use EVM? Project costs are monitored and controlled using a common technique called earned value management (EVM). Given the following information: Projec t PV AC EV A 10,000 11,000 10,000 B 9,000 8,000 7,000 C 8,000 8,000 8,000 D 7,000 7,000 5,000 Based on the Planned Values, Actual Costs, and Earned Values listed for Projects A, B, C, and D in the above table, how would you rank these four projects, from best- to worst-performing?
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