41 terms

7-Project Cost Management

From "Information Technology Project Management" Revised 6e, Kathy Schwalbe
STUDY
PLAY

Terms in this set (...)

actual cost (AC)
the total of direct and indirect costs incurred in accomplishing work on an activity during a given period.
analogous estimates
a cost estimating technique that uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project, also called top-down estimates.
baseline
the original project plan plus approved changes.
bottom-up estimates
a cost estimating technique based on estimating individual work items and summing them to get a project total.
budget at completion (BAC)
the original total budget for a project.
budgetary estimate
a cost estimate used to allocate money into an organization's budget.
cash flow analysis
a method for determining the estimated annual costs and benefits for a project.
contingency reserves
dollars included in a cost estimate to allow for future situations that may be partially planned for (sometimes called known unknowns) and are included in the project cost baseline.
controlling costs
controlling changes to the project budget.
cost baseline
a time-phased budget that project managers use to measure and monitor cost performance.
cost management plan
a document that describes how cost variances will be managed on the project.
cost performance index (CPI)
the ratio of earned value to actual cost; can be used to estimate the projected cost to complete the project.
cost variance (CV)
the earned value minus the actual cost.
definitive estimate
a cost estimate that provides an accurate estimate of project costs.
determining the budget
allocating the overall cost estimate to individual work items to establish a baseline for measuring performance.
direct costs
costs that can be directly related to producing the products and services of the project.
earned value (EV)
an estimate of the value of the physical work actually completed.
earned value management (EVM)
a project performance measurement technique that integrates scope, time, and cost data.
estimate at completion (EAC)
an estimate of what it will cost to complete the project based on performance to date.
estimating costs
developing an approximation or estimate of the costs of the resources needed to complete the project.
indirect costs
costs that are not directly related to the projects or services of the project, but are indirectly related to performing the project.
intangible costs or benefits
costs or benefits that are difficult to measure in monetary terms.
known unknowns
dollars included in a cost estimate to allow for future situations that may be partially planned for (sometimes called contingency reserves) and are included in the project cost baseline.
learning curve theory
a theory that states that when many items are produced repetitively, the unite cost of those items normally decreases in a regular pattern as more unties are produced.
life cycle costing
considers the total cost of ownership, or development plus support costs, for a project.
management reserves
dollars included in a cost estimate to allow for future situations that are unpredictable (sometimes called unknown unknowns)
overrun
the additional percentage or dollar amount by which actual costs exceed estimates.
parametric modeling
a cost-estimating technique that uses project characteristics (parameters) in a mathematical model to estimate project costs.
planned value (PV)
that portion of the approved total cost estimate planned to be spent on an activity during a given period.
profit margin
the ration between revenues and profits.
projects
revenues minus expenses.
project cost management
the processes required to ensure that the project is completed within the approved budget.
rate of performance (R)
the ration of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity.
reserves
dollars included in a cost estimate to mitigate cost risk by allowing for future situations that are difficult to predict.
rough order or magnitude (ROM) estimate
a cost estimate prepared very early in the life of a project to provide a rough idea of what a project will cost.
schedule performances index (SPI)
the ration of earned value to planned value; can be used to estimate the projected time to complete a project.
schedule variance (SV)
the earned value minus the planned value.
sunk cost
money that has been spent in the pats.
tangible costs or benefits
costs or benefits that can be easily measured in dollars.
top-down estimates
a cost estimating the technique that uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project, also called analogous estimates.
unknown unknowns
dollars included in a cost estimate to allow for future situation that are unpredictable (sometimes called management reserves).
YOU MIGHT ALSO LIKE...