{"pageinfo":[{"Stamp":"pgo_4fa3829ca596d","Topic":"Cost Management","PageTo":"0","PageMark":"2","Header":{"PageNo":0,"Title":{"TitleText":"Cost Managment"}},"Sections":{"Title":{"TitleText":"Estimating and Budgeting","TitleAuthor":"K Srikanth, PMP"},"Matter":[{"Para":"Estimation methods such as parametric estimate (e.g. unit cost x quantity), top-down estimates (allocation of timebased funds, analogous or comparative or earlier performance basis etc), vendor-bid analysis (comparing multi vendor quotations), PERT estimates, etc can be employed as advised by PMO. While applying cost estimates to acitivity resources cost-factors (fixed and variable cost, direct and indirect cost) are included within per resource or per hour estimate as defined by PMO.<\/font>
Cost Breakdown Structure (CBS) is similar in representation to WBS however cost is highlighted for each logical work component. Contingency reserves (risks funds) are allocated at appropriate levels instead of each activity. CBS traversing top-down is more of apportioning of budgets to each work package while travesing bottom-up is more of aggregation of work package to arrive at a budget. In any case basis of estimate (BOE) is generally furnished. It is analagous estimate of budgeting in former case and in later case it is aggregation or engineering estimate(bottom-up) to arrive at final budget or Budget at Completion(BAC) or funds required for the project implementation.<\/font><\/div>"}],"Subject":{"Related":"Estimation, Aggregation, Apportioning, Budgets, Contingency reserves, Management reserves"}},"Footer":{"PageNo":0,"Title":{"TitleText":"Cost Managment"}}},{"Stamp":"pgo_4fa3832870ffd","Topic":"Cost Management","PageTo":"0","PageMark":"2","Header":{"PageNo":1,"Title":{"TitleText":"Cost Managment"}},"Sections":{"Title":{"TitleText":"Budgeting and Investment decisions","TitleAuthor":"K Srikanth, PMP"},"Matter":[{"Para":"Generally investment options are considered during project selection or project proposal submission with investor. Fund flow statement (outflows vs inflows) is presented to sponsor for approval if advised along with support information using capital budgeting appraisal methods. Examples may include Net Present Value (NPV ; pv=fv\/(1+d)^n where pv is present value, fv is future value, d is discount rate, n is years) , Internal Rate of Return (IRR), Return on Investment(ROI), Payback period, depreciation of assets etc . Other types of cost analysis such as Life-cycle-analysis(LCA), Cost-Benefit analysis (CB analysis) can also be provided as required. Benefits proposal might include in terms of cost as reduce expenses, defer expenses, increase revenue or in indirectly such as increased market share, customer satisfaction, employee satisfaction etc.<\/span>"}],"Subject":{"Related":"Project selection, Investment analysis"}},"Footer":{"PageNo":1,"Title":{"TitleText":"Cost Managment"}}},{"Stamp":"pgo_4fa385a72636f","Topic":"Cost Management","PageTo":"0","PageMark":"2","Header":{"PageNo":2,"Title":{"TitleText":"Cost Managment"}},"Sections":{"Title":{"TitleText":"WIP time cost updates","TitleAuthor":"K Srikanth, PMP"},"Matter":[{"Para":"Work-In-Progress(WIP) cost information (actual cost) updates may or may not affect cost baseline. Example, some may be treated as work related data collection like daily status updates, weekly time sheets, loss-of-pay, or for fixed-price contract may not initiate an cost baseline plan update. However, these data may trigger cost plan updates or change requests depending upon what is been analysed. It may be when analysed for variances or when analysed for satisfactory performance criteria or when analysed for trend or budget forecasts meeting expected budget at completion (phase, milestone, project).

Earned value management is a tool that is very popular to help us do variance analysis with respect to scope, time and cost in a single go. Using this tool with information on Planned Value (PV), Actual cost (AC) and Earned Value (EV) one can find cost variance (CV = EV - AC), cost performance index (CPI = EV \/ AC), Estimate at completion (EAC= BAC \/ CPI).

Cost control system help initiate required actions to control variances against the plan or update plans upon agreement with stakeholders.<\/font>"}],"Subject":{"Related":"EVM, Variance analysis, Cost control system, stakeholder, budgets, re-estimation"}},"Footer":{"PageNo":2,"Title":{"TitleText":"Cost Managment"}}},{"Stamp":"pgo_4faf1e2a29e0c","Topic":"Cost Management","PageTo":"0","PageMark":"2","Header":{"PageNo":3,"Title":{"TitleText":"Cost Managment"}},"Sections":{"Title":{"TitleText":"PMBOK coverage","TitleAuthor":"K Srikanth, PMP"},"Matter":[{"Para":"Planning : Estimate costs, Determine Budget

Monitoring & Control : Control costs<\/font>"}],"Subject":{"Related":"PMBOK coverage"}},"Footer":{"PageNo":3,"Title":{"TitleText":"Cost Managment"}}}]}