- Understanding PMI’s Project Planning Process Group
- Exploring Key Aspects of the Planning Processes
- Developing the Project Management Plan
- Scope Management
- Activity Planning—From WBS to Project Schedule
- Critical Cost Estimating Factors
- Exam Prep Questions
- Answers to Exam Prep Questions
- Need to Know More?
This chapter is from the book
This chapter is from the book
This chapter is from the book
Critical Cost Estimating Factors
The cost estimating process associates an expected cost of performing work to each activity. Cost estimates can include labor, materials, equipment, and any other direct costs for project activities. Based on the activity resource and duration estimates, the cost estimates express the cost, normally in monetary amounts, of completing the work of the project. As with all project documents, the cost estimates can change throughout the project as conditions change. Different events can cause the cost for any activity to go up or down and require the cost estimates for the project to change. Table 3.11 shows the inputs, tools, techniques, and outputs for the cost estimating process.
Table 3.11 Cost Estimating Inputs, Tools, Techniques, and Outputs
|
Inputs |
Tools and Techniques |
Outputs |
|
Enterprise environmental factors |
Analogous estimating |
Activity cost estimates |
|
Organizational process assets |
Determine resource cost rates |
Activity cost estimates supporting detail |
|
Project scope statement |
Bottom-up estimating |
Requested changes |
|
Work breakdown structure |
Parametric estimating |
Cost management plan (updates) |
|
WBS dictionary |
Project management software |
|
|
Project management plan |
Vendor bid analysis |
|
|
|
Reserve analysis |
|
|
|
Cost of quality |
|
Cost estimates are compiled into the project budget. The cost budgeting process aggregates the activity cost estimates into a single document for the project. The resulting project budget expands on the preliminary budget from the project charter and provides far more detail. Table 3.12 shows the inputs, tools, techniques, and outputs for the cost budgeting process.
Table 3.12 Cost Budgeting Inputs, Tools, Techniques, and Outputs
|
Inputs |
Tools and Techniques |
Outputs |
|
Project scope statement |
Cost aggregation |
Cost baseline |
|
Work breakdown structure |
Reserve analysis |
Project funding requirements |
|
WBS dictionary |
Parametric estimating |
Cost management plan (updates) |
|
Activity cost estimates |
Funding limit reconciliation |
Requested changes |
|
Activity cost estimates supporting detail |
|
|
|
Project schedule |
|
|
|
Resource calendars |
|
|
|
Contract |
|
|
|
Cost management plan |
|
|