Cost Management

1. Cost Estimationg process
input:
Scope Statement
WBS
WBS Dictionary
Project Management Plan
Organization Process Assets
Enterprise Environmental Factors
tools:
Bottom-up estimating
Analogous estimating
Project management software
Parametric estimating
Determine Resource Cost Rates
Vendor Bid Analysis
Reserve Analysis
Cost of Quality
output:
Activity cost estimates
Activity cost estimates supporting detail
Updates to the cost management plan
Requested changes(scope,schedule,risk)

2. Cost Budgeting process
input:
Activiy Cost Estimate
Cost Estimate Suporting Detail
Project Management Plan
Cost Management Plan
Project Scope Statement
Contract
Resource Calendar
Schedule
Work Breakdown Structure
WBS Dictionary
tools:
cost aggregation(from activity estimates to control accounts on WBS)
come up with reserves
Use parametric estimation
Funding Limit Reconciliation
output:
The Cost Baseline
Figure out funding requirements(how and when spend money)
Update cost plan

3. Cost Control process
input:
The Cost Baseline
Project funding requirements
Work Performance Information
Performance reports
Approved Change Requests
Project Management Plan
tools:
Cost change control system
Project management software
Performance measurement analysis
Variance analysis
Project performance reviews
Forecasting

Earned Value Techniques:
BAC(Budget At Completion)

PV(Planned Value)
PV = BAC * (Planned/Complete) ----as per schedule

EV(Earned Value), measures how much work that is been done
EV = BAC * (Actual/Complete)

SPI(Schedule Performance Index)
SPI = EV/PV if SPI>1, ahead of schedule; otherwise, behind schedule.

SV(Schedule Variance)
SV = EV - PV

Actual Cost(how much you've spend)

CPI(Cost Performance Index) ---whether you're over or under budget, or within budget or not
CPI = EV / AC

CV(Cost Variance) --- how much above or below your budget you are
CV = EV - AC

EAC(Estimate At Completion) ---predict the total cost of the project
EAC = BAC/CPI

ETC(Estimate to Complete) --- how much more money you'll need
ETC = EAC - AC

VAC(Variance at Completion) --- predicts the variance when the project is done
VAC = BAC - EAC page380