Ch 7 Cost Estimating Exercises

1. ____________________ is developing an approximation of the costs of the

resources needed to complete project activities.

2. ____________________is using the actual cost of previous, similar projects as

the basis for estimating the cost of the current project

3. ____________________is considered to be the most accurate but can be costly in

time and labor.

4. ____________________uses a statistical relationship between historical data and

other variables to calculate a cost estimate (cost per square foot)

5. A ____________________is used for costs are that are anticipated for uncertain
events. These costs are for “known, unknowns".

6. Estimates become more accurate with progressive ____________________

7. A disadvantage of Parametric Estimating is that it does not provide low level

visibility into discrete areas. True or False

8. ____________________involves aggregating the estimated costs of individual

schedule activities or work packages to establish a total cost baseline for
measuring project performance.

9. ____________________ (unknown unknowns) are budgets for unplanned but

potentially required changes in project scope and cost. This budget is NOT
controlled by the project manager.

10. The budgeting technique in which we monitor and limit large variations in the
expenditure of project funds is called ____________________ (Limiting funds
available for a specific time period, such as by fiscal year or by month).

11. ____________________is a time phased budget typically displayed as an S-curve

and is used as a basis against which to measure, monitor, and control overall cost
performance on the project.

12. Much of the effort of _______________________ involves analyzing the

relationship between the consumption of project funds to the physical work being
accomplished

13. You are told that the SPI on a project is .8. This means the project is: Behind or
Ahead of schedule.
14. You are told the CPI is 1.2 on a project. This means that the project is getting
____________________worth of work for each $1.00 spent.

15. If you are given the net present values of 2 projects then you do not have enough
information to know which project is a better investment. True or False

16. ____________________are historical or expended cost and are irrelevant to

choosing among alternate coursed of action.

17. Name the following abbreviations:

a. BAC – _____________________________________

b. EV- _____________________________________

c. PV – _____________________________________

d. AC – _____________________________________

e. CV- _____________________________________

f. SV – _____________________________________

g. CPI – _____________________________________

h. SPI – _____________________________________

i. EAC – _____________________________________

j. ETC – _____________________________________

k. VAC – _____________________________________

l. TCPI – _____________________________________
• Sunk costs
• funding limit reconciliation
• Management contingency reserves
• Contingency Reserve
• Parametric estimating
• Analogous estimating
• Cost control
• The cost baseline
• Determine budget
• Elaboration
• Bottom up estimating
• Estimating Costs