Mohamed Seleam Abou Hatab

Sr. Project Management Consultant

Mohamed.seleam@yahoo.com
+201061177737

PROJECT COST MANAGEMENT

Mohamed Seleam Abou Hatab

PMP, PMI-RMP, PMI-SP, PMI-PBA
Sr. Project Management Consultant
 COST ESTIMATION VS. PRICING
COST ESTIMATING: ASSESSING HOW MUCH
IT WILL COST THE ORGANIZATION TO
PROVIDE THE PRODUCT OR SERVICE
Cost

Price
Profi
t PRICING: Assessing how much the
organization will charge for the
product or service
2
PROJECT COST MANAGEMENT
• PROJECT COST MANAGEMENT INCLUDES THE PROCESSES INVOLVED IN
ESTIMATING, BUDGETING, AND CONTROLLING COSTS SO THAT THE PROJECT
CAN BE COMPLETED WITHIN THE

APPROVED BUDGET

• PLAN COST MANAGEMENT.

• ESTIMATE COSTS.
• DETERMINE BUDGET.
• CONTROL COSTS. 3
 Project Management Process Groups
Knowledge Areas
Monitoring and Controlling Closing Process
Initiating Process Group Planning Process Group Executing Process Group
Process Group Group

4- Project Integration Management 4.1 Develop Project Charter 4.2 Develop Project Management Plan 4.3 Direct and Manage Project 4.5 Monitor and Control Project 4.7 Close Project
Work Work or phase
4.4 Manage Project Knowledge 4.6 Perform Integrated Change
Control

5- Project Scope Management 5.1 Plan Scope Management 5.5 Validate Scope
5.2 Collect Requirements 5.6 Control Scope
5.3 Define Scope
5.4 Create WBS
6- Project Schedule Management 6.1 Plan Schedule Management 6.6 Control Schedule
6.2 Define Activities
6.3 Sequence Activities
6.4 Estimate Activity Durations
6.5 Develop Schedule
7- Project Cost Management 7.1 Plan Cost Management 7.4 Control Costs
7.2 Estimate Costs
7.3 Determine Budget
8- Project Quality Management 8.1 Plan Quality Management 8.2 Manage Quality 8.3 Control Quality

9- Project Resource Management 9.1 Plan Resource Management 9.3 Acquire Resources 9.6 Control Resources
9.2 Estimate Activity Resources 9.4 Develop Team
9.5 Manage Team
10- Project Communications 10.1 Plan Communications Management 10.2 Manage Communications 10.3 Monitor Communications
Management

11- Project Risk Management 11.1 Plan Risk Management 11.6 Implement Risk Responses 11.7 Monitor Risks
11.2 Identify Risks
11.3 Perform Qualitative Risk Analysis
11.4 Perform Quantitative Risk Analysis
11.5 Plan Risk Responses

12- Project Procurement 12.1 Plan Procurement Management 12.2 Conduct Procurements 12.3 Control Procurements 4
Management
13- Project Stakeholder 13.1 Identify Stakeholders 13.2 Plan Stakeholder Engagement 13.3 Manage Stakeholder 13.4 Monitor Stakeholder
Management Engagement Engagement
We are about to produce 20 tables in 20 days cost is $20 for each.
How much BAC = ???
BAC = $20 * 20 tables = $400
Today is day 4 How much is the PV ?
PV = $20 x 4 tables = $80
At day 4 I earned only 3 tables, how much is the EV ?
EV = $20 x 3 tables = $60
AC = ??? X 3 tables = $90
SV = EV – PV = 60 – 80 = -$20
CV =EV – AC = 60 – 90 = -$30
SPI = EV / PV = 60 / 80 = 0.75
CPI = EV / AC = 60 / 90 = 0.666
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 EARNED VALUE COMPONENTS
 PLANNED VALUE (PV) – OLD NAME WAS (BCWS) BUDGET COST OF WORK SCHEDULED
 EARNED VALUE (EV) – OLD NAME WAS (BCWP) BUDGET COST OF WORK
PERFORMED
 ACTUAL COSTS (AC) – OLD NAME WAS (ACWP) ACTUAL COST OF WORK
PERFORMED

 BUDGET AT COMPLETION (BAC)

 SCHEDULE VARIANCE (SV)

 COST VARIANCE (CV)
 SCHEDULE PERFORMANCE INDEX (SPI)
 COST PERFORMANCE INDEX (CPI)
 Variance at Completion (VAC)

B AC what the total job is supposed to cost

E AC what the total job is expected to cost

VARIANCE AT COMPLETION is the difference between what the total job is

supposed to cost and what the total job is now expected to cost.

FORMULA: VAC = BAC - EAC

Example: VAC = $400 - $430 7
VAC = - $30 (negative = overrun)
 EARNED VALUE (CONT.)
ACRONYM TERM INTERPRETATION OLD ACRONYM
PV (BCWS) Planned Value What is the estimated value of the work to be done? BCWS: Budgeted cost of work
scheduled

EV (BCWP) Earned Value What is the estimated value of the work actually BCWP: Budgeted cost of work
accomplished? performed

AC (ACWP) Actual Cost What is the actual cost incurred? ACWP: Actual cost of work
performed

BAC Budget at Completion How much did we BUDGET for the TOTAL JOB?

EAC Estimate at What do we currently expect TOTAL project to cost?

Completion

ETC Estimate to Complete From this point on, how much MORE do we expect to
cost to finish the project?

VAC Variance at How much MORE or UNDER budget do we expect to

Completion be at the end of the project?
 Earned
EARNED Value
VALUE (CONT.)
(Cont.)

NAME FORMULA INTERPRETATION

Cost Variance (CV) CV = EV – AC NEGATIVE is over budget, POSITIVE

is under budget.

Schedule Variance (SV) SV = EV – PV NEGATIVE is behind schedule,

POSITIVE is ahead of schedule.

Cost Performance Index (CPI) CPI = EV/AC We are getting $ _____ out of every 1
$.

Schedule Performance Index (SVI) SPI = EV/PV We are only progressing at ____% of
the rate originally planned.

Estimate To Complete (ETC) EAC - AC How much more will the project cost?

Variance At Completion (VAC) BAC – EAC How much over budget will be at the
end of the project?
 FORECASTING
EAC FORECAST FOR ETC AT NEW ESTIMATE
 EAC = AC+ETC
 90+ 300 = 390
EAC FORECAST FOR ETC WORK PERFORMED AT THE BUDGETED RATE
 EAC = AC+(BAC-EV )
 = 90+ (400-60)=430
EAC FORECAST FOR ETC WORK CONSIDERING BOTH SPI AND CPI
FACTORS
 EAC =AC+((BAC-EV) /(CPI*SPI))
 =90 +((400 – 60 )/ (.495 )) = 770
EAC FORECAST FOR WORK PERFORMED AT THE PERCENT CPI
 EAC = BAC/ CPI
 =400 / .66 = 600
EACT FORECAST FOR THE DURATION OF THE PROJECT
 EACT = PD/SPI
 Earned
EARNED Value
VALUE (CONT.)
(Cont.)

NAME FORMULA INTERPRETATION

Estimate at Completion (EAC) As of now, how much do we expect the total project to
cost?$_____

BAC/CPI Used if no variances from the BAC have occurred or

you will continue at the same rate of spending.

AC+ETC Actual plus a new estimate for remaining work. Used

when original estimate was fundamentally flawed.

AC+BAC-EV Actual to date plus remaining work. Used when current

variances are thought to be a typical of the future.

AC+ (BAC-EV) Actual to date plus remaining budget modified by

CPIxSPI performance. Used when current variances are thought
to be typical of the future.
EXERCISE
10 MIN.
.

12
WALL CONSTRUCTION
Wall Construction
Time = 1 week per wall
Cost = $ 1,000 per wall, materials and labor
Total Schedule = 4 weeks
Total Cost = $ 4,000
Working days 5 day per week starting on
Sunday and finish on Thursday by 5 PM
Assume production is liner

13
 5 pm Wednesday, Week 2

How much work should

have been completed -PV?
PLANNED Wall 1 100% = $ 1,000
Wall 2 80% = $ 800
Wall 3 0% = 0
Wall 4 0% = 0
PV = $ 1,800
 5 pm Wednesday, Week 2

10 %
What is the budgeted
value of actual work - EV?
EARNED
Wall 1 100% = $ 1,000
Wall 2 50% = $ 500
Wall 3 10% = $100
Wall 4 0% = 0
50 % EV = $1,600
5 pm Wednesday, Week 2

Total Cost to date –

AC = $ 2,250
5 PM WEDNESDAY, WEEK 2
Earned Value
PV $1,800
EV $1,600
AC $2,250

Schedule Variance = EV - PV
= $1,600 - $1,800
= ($200)
Cost Variance = EV - AC
= $1,600 - $2,250
= ($650)
5 PM WEDNESDAY, WEEK 2
Performance Indices
PV $1,800
EV $1,600
AC $2,250

SPI = EV / PV
= $1,600 / $1,800
= .9
CPI = EV / AC
= $1,600 / $2,250
= .7
 QUESTIONS & ANSWERS EV

1. YOU ARE A PROJECT MANAGER WORKING ON A PROJECT THAT REQUIRES 100

WIDGETS TO BE BUILT IN FIVE WEEKS. YOU HAVE JUST BEGUN WEEK THREE, WITH
AN OVERALL BUDGET OF US $10,000. TO DATE YOU HAVE SPENT US $2,000 WITH 40
WIDGETS SUCCESSFULLY BUILT. WHAT DOES THE COST VARIANCE TELL YOU IN
THIS CIRCUMSTANCE?

A. THE PROJECT IS PROCEEDING AT 100% OF THE EXPECTED RATE

B. THE PROJECT IS GETTING $2 OF WORK FOR EVERY DOLLAR SPENT
C. THE PROJECT IS ON BUDGET
D. THE PROJECT IS $2000 UNDER BUDGET
 QUESTIONS & ANSWERS EV

1. YOU ARE A PROJECT MANAGER WORKING ON A PROJECT THAT REQUIRES 100

WIDGETS TO BE BUILT IN FIVE WEEKS. YOU HAVE JUST BEGUN WEEK THREE, WITH
AN OVERALL BUDGET OF US $10,000. TO DATE YOU HAVE SPENT US $2,000 WITH 40
WIDGETS SUCCESSFULLY BUILT. WHAT DOES THE COST PERFORMANCE INDEX
TELL YOU IN THIS CIRCUMSTANCE?

A. THE PROJECT IS PROCEEDING AT 100% OF THE EXPECTED RATE

B. THE PROJECT IS GETTING $2 OF WORK FOR EVERY DOLLAR SPENT
C. THE PROJECT IS ON BUDGET
D. THE PROJECT IS $2000 UNDER BUDGET
 QUESTIONS & ANSWERS EV

2. YOU ARE A PROJECT MANAGER FOR A SMALL CONSTRUCTION PROJECT. YOUR PROJECT
WAS BUDGETED FOR US $72,000 OVER A SIX WEEK PERIOD. AS OF TODAY, YOU'VE SPENT
US $22,000 OF YOUR BUDGET TO COMPLETE WORK THAT YOU ORIGINALLY EXPECTED
WOULD COST US $24,000. ACCORDING TO YOUR SCHEDULE, YOU SHOULD HAVE SPENT
US $21,000 BY THIS POINT. BASED ON THESE CIRCUMSTANCES, YOUR PROJECT COULD
BE BEST DESCRIBED AS:

A. OVER BUDGET
B. ON BUDGET
C. UNDER BUDGET
D. NOT HAVING ENOUGH INFORMATION PROVIDED
 QUESTIONS & ANSWERS EV

3. A COST PERFORMANCE INDEX (CPI) OF 0.89 MEANS:

A. AT THIS TIME, WE EXPECT THE TOTAL PROJECT TO COST 89% MORE THAN PLANNED.
B. WHEN THE PROJECT IS COMPLETED WE WILL HAVE SPENT 89% MORE THAN PLANNED.
C. THE PROJECT IS ONLY PROGRESSING AT 89% OF THAT PLANNED.
D. THE PROJECT IS ONLY GETTING 89 CENTS OUT OF EVERY DOLLAR INVESTED.
 QUESTIONS & ANSWERS EV

4. A SCHEDULE PERFORMANCE INDEX (SPI) OF 0.76 MEANS:

A. WE ARE OVER BUDGET.

B. WE ARE A HEAD OF SCHEDULE.
C. WE ARE ONLY PROGRESSING AT 76% OF THE RATE ORIGINALLY PLANNED.
D. WE ARE ONLY PROGRESSING AT 24% OF THE RATE ORIGINALLY PLANNED.
 Questions & Answers EV

Given:
BAC = 200
AC = 120
EV = 80
CPI = 0.666
Assuming that current variances are typical of
future variances, the estimate at completion
(EAC) is:

A. 220.
B. 260.
C. 300.
D. 320.

24
 Questions & Answers EV

1. Given:
BAC = 200
AC = 120
EV = 80
CPI = 0.666
Assuming that current variances are atypical , the
estimate at completion (EAC) is:

A. 120.
B. 160.
C. 300.
D. 240.

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 Types Of Costs
Direct Costs

Indirect costs

Fixed costs

Variable costs

Opportunity costs

Sunk costs

Working Capital
26
 DEPRECIATION

Straight Line Depreciation

The same amount of depreciation is taken each year, A US $ 1,000
item with a ten year useful life and no salvage value (how much item
is worth at the end of its life) would be depreciated at US $100 per
year.

Accelerated Depreciation
There are two forms of accelerated depreciation:
1.Double Declining Balance
2.Sum of the Years Digits.
They depreciate faster than straight line.
You do not have to know what these two forms means or do any
calculations.
 PRESENT VALUE
 Budgeting technique that debates the future value of Year FV PV
0 $50,000 $50,000
money based on inflation, etc. 1 $35,000 $31,819
2 $15,000 $12,397
 PV = FV
Assume a 10% interest (discount rate)
(1 + r) t

PV (Year 1) = FV / (1 + r)t
FV = amount of money t years from now =$35,000/(1 + 0.1)1
= $31,819
r = interest rate (also called “discount rate”)
t = time period
 NET PRESENT VALUE (NPV)
This Means the total benefits (income or revenue) less the cost. To calculate NPV you need to calculate the present value of
each of the income and revenue figures then add up the present values.

Income or Present Value at 10% Present Value at 10%

Time Period Costs
revenue interest rate interest rate

0 0 0 200 200

1 50 45 100 91

2 100 83 0 0

3 300 225 0 0

Total 353 291

NPV =353-291=62
 NET PRESENT VALUE (NPV)
This Means the total benefits (income or revenue) less the cost. To calculate NPV you need to calculate the present value of
each of the income and revenue figures then add up the present values.

Income or Present Value at 10% Present Value at 10%

Time Period Costs
revenue interest rate interest rate

0 0 0 200 200

1 50 45 100 91
100
2 83 100 83

3 300 225 0 0

4 100 55 0 0

5 100 45 0 0

Total 453 374

NPV =453-374=79
 PAYBACK PERIOD
The exact length of time needed to recover an initial investment as calculated from cash
inflows.

Month Costs Total Cost Benefits Total Benefits

1 $5000 $5000 $0 $0
2 $5000 $10000 $0 $0
3 $8000 $18000 $0 $0
4 $5000 $23000 $5000 $5000
5 $2000 $25000 $10000 $15000
6 $0 $25000 $10000 $25000
7 $0 $25000 $10000 $35000

PAYBACK PERIOD is 6 MONTHS

 Benefit Cost Ratio (BCR)
 Compares the cost to the benefits of different projects. A
BCR of > 1 means the benefits are grater than the costs. A
BCR of < 1 means the costs are grater than the benefits. A
BCR =1 means the costs and benefits are the same.
 If the BCR of project A is 2.3 and BCR of project B is 1.7
which project would you select?
The answer is A. the project with the
higher BCR
INTERNAL RATE OF
RETURN (IRR)
 The interest (discount) rate where the present value of
the benefits exactly equals the costs.
 The higher the rate, the better the project.
 An IRR of 0.15 means that you expect the project to
return an average of 15% on your investment over a
given time period (usually a number of years).
 EXERCISE: ACCOUNTING STANDARDS

Project Project Choice

A B

Net present V $95.00 $75.00 A

IRR 13% 17% B

Payback 21 16 B
Period Month Month

Benefit Cost 2.79 1.3 A

Ratio
 Budget
RESERVES Management reserve
+
Cost baseline
 CONTINGENCY RESERVE
 PROJECT MANAGER Contingency reserve
+
Cost estimate
 MANAGEMENT RESERVE
 TOP MANAGEMENT (SENIOR WBS
MANAGEMENT)

sub1 Sub2

Work Work Work

package package package
 LIFE CYCLE COSTING

LIFE CYCLE COSTING : Means that the cost of operation and maintenance phase to be
consider and manage with the project cost

PROJECT OPERATIONS AND

MAINTENANCE PHASE

costs costs
 TAILORING CONSIDERATION

 KNOWLEDGE MANAGEMENT

 ESTIMATING AND BUDGETING

 EARNED VALUE MANAGEMENT

 USE OF AGILE APPROACH

 GOVERNANCE
 CONSIDERATION FOR AGILE/ADAPTIVE
ENVIRONMENT

 HIGH-LEVEL COST ESTIMATING

 DETAILED ESTIMATING FOR EACH PHASE (SPRINT)

 Project Cost Management

Planning Monitoring & Controlling

Plan Cost determine Control Cost

Estimate Costs Budget
Management

38
 PLAN COST MANAGEMENT

Inputs Tools & Outputs

Techniques
1. Project charter 1. Expert judgment 1. Cost management Plan

2. Project manage. Plan 2. Meeting

•Schedule manage. Plan
•Risk manage. Plan 3. Data Analysis

3. Enterprise environmental
factors (EEF)

4. Organizational process
assets (OPA)
 ESTIMATE COSTS

Inputs Tools & Techniques Outputs

1. Project manage. Plan
•Cost manage. Plan
•Quality manage. Plan
•Scope baseline
2. Project documents
•Lessons learned register
•Project schedule
•Resource requirements
•Risk register
3. (EEF)
4. (OPA)
1. Expert Judgment 1. Cost estimates
2. Analogous estimating
3. Parametric estimating 2. Basis of estimates
4. bottom-up estimating
5. Three-point estimating 3. Project documents
updates
6. Data analysis • Assumption log
•Alternative analysis • Lessons learned
•Reserve analysis register
•Cost of quality • Risk register
7. Project management
information system
8. Decision making
•Voting
 DETERMINE BUDGET

Inputs Tools & Techniques Outputs

1. Project manage. Plan 1. Expert Judgment 1. Cost baseline
•Cost manage. Plan 2. Cost aggregation 2. Project funding
•Resource manage. plan 3. Data analysis requirements
•Scope baseline •Reserve analysis 3. Project documents
2. Project documents 4. Historical info. review updates
•Basis of estimates 5. Funding limit reconciliation • Cost estimates
•Cost estimate 6. Financing • Project schedule
•Project schedule • Risk register
•Risk register
3. Business documents
•Business case
•Benefits manage. Plan
4. Agreements
2. EEF
3. OPA
S- Curve
S- Curve
Project Cost Baseline, Expenditures, and Funding Requirements
 PROJECT PERFORMANCE
Cost
MANAGEMENT
EAC
Data date

BAC

AC
PV CV= EV - AC
SV= EV - PV
EV
Time
 CONTROL COST
Inputs Tools & Techniques Outputs
1. Project manage. Plan 1. Expert Judgment 1.Work performance info.
•Cost manage. Plan 2. Data analysis 2.Cost forecasts
•Cost baseline •Earned value 3.Change requests
•Performance measurement management 4.Project Management Plan
baseline •Variance analysis updates
2. Project documents •Trend analysis •Cost manage. Plan
•Lessons learned register •Reserve analysis •Cost baseline
3. Project funding 3. To-complete •Performance measurement
requirements performance index baseline
4. Work performance data (TCPI) 5. Project documents updates
5. OPA 4. Project management • Assumption log
info. • Basis of estimates
System • Cost estimates
• Lessons learned register
• Risk register
 CONTROL COSTS: INPUTS

 COST MANAGEMENT PLAN. DESCRIBES HOW THE PROJECT COSTS WILL BE MANAGED AND CONTROLLED.

 COST BASELINE. IS COMPARED WITH ACTUAL RESULTS TO DETERMINE IF A CHANGE, CORRECTIVE ACTION, OR PREVENTIVE ACTION IS
NECESSARY.

 PERFORMANCE MEASUREMENT BASELINE.. WHEN USING EARNED VALUE ANALYSIS, THE PERFORMANCE MEASUREMENT BASELINE IS
COMPARED TO ACTUAL RESULTS TO DETERMINE IF A CHANGE, CORRECTIVE ACTION, OR PREVENTIVE ACTION IS NECESSARY.

 PROJECT FUNDING REQUIREMENTS INCLUDE PROJECTED EXPENDITURES PLUS ANTICIPATED LIABILITIES.

 WORK PERFORMANCE DATA SUCH AS WHICH COSTS HAVE BEEN AUTHORIZED, INCURRED, INVOICED, AND PAID.
To-Complete Performance index
(TCPI)

• TCPI is a CPI that must be

achieved in order to meet a
certain management goal for the
project (such as BAC or EAC).
QUESTIONS

49
 1- HALF WAY THROUGH THE EXECUTING PROCESSES OF
YOUR PROJECT, A TEAM MEMBER ALERTS YOU TO A
POTENTIAL COST OVERRUN FOR A SPECIFIC DELIVERABLE.
WHAT DO YOU DO FIRST?
A ) DETERMINE THE PROJECTED ACTUAL COST.

B ) IMPLEMENT A CHANGE CONTROL PROCESS TO TRACK

THE CHANGE

C ) INFORM THE CUSTOMER.

D ) DETERMINE THE CAUSE OF THE OVERAGE

50
 2 - WHICH TYPE OF COSTS IS TEAM TRAINING?

A ) DIRECT

B)EV

C ) INDIRECT

D ) FIXED

51
 3- A PROJECT MANAGER HAS COMPLETED A
DETAILED WBS AND COST ESTIMATES FOR EACH
WORK PACKAGE. TO CREATE A COST BASELINE FROM
THIS DATA, THE PROJECT MANAGER WOULD :

A ) USE THE HIGHEST LEVEL OF THE WBS TO ESTIMATE

ANALOGOUSLY
B ) SUM UP THE WORK PACKAGE AND RISK CONTINGENCY RESERVE
ESTIMATES.

C ) ROLL UP WORK PACKAGE ESTIMATES INTO A PROJECT TOTAL AND

ADD MANAGEMENTS RESERVES. 52

D ) GAIN EXPERT OPINIONS OF THE PROJECT COSTS. 11

 4- YOU ARE HAVING DIFFICULTY ESTIMATING THE COST OF
YOUR PROJECT. WHISH OF THE FOLLOWING BEST DESCRIBES
THE MOST PROBABLE CAUSE OF YOUR DIFFICULTY?

A ) INADEQUATE SCOPE DEFINITION

B ) UNAVAILABILITY OF DESIRED RESOURCES

C ) LACK OF HISTORICAL RECORDS FROM PREVIOUS PROJECTS

D ) LACK OF COMPANY PROCESSES

53
 5- WHICH OF THE FOLLOWING REPRESENTS THE
VALUE OF WORK WE HAVE ACTUALLY COMPLETED?

A ) EARNED VALUE

B ) PLANNED VALUE

C ) ACTUAL COST

D ) ESTIMATE TO COMPLETE
54
 6- IF EARNED VALUE (EV) IS U.S.$300000, ACTUAL
COST (AC) IS U.S.$350000, AND PLANNED VALUE (PV)
IS U.S. $375000, WHAT DOES THE SCHEDULE
PERFORMANCE INDEX (SPI) INDICATE?
A ) YOU ARE PROGRESSING AT 86% OF THE RATE ORIGINALLY PLANNED.

B ) YOU ARE PROGRESSING AT 125% OF THE RATE ORIGINALLY PLANNED.

C ) YOU ARE PROGRESSING AT 116% OF THE RATE ORIGINALLY PLANNED.

D ) YOU ARE PROGRESSING AT 80% OF THE RATE ORIGINALLY PLANNED.

55
 7- THE FORMULA, EAC = BAC/CPI, ASSUMES THAT:

A ) ALL SUBSEQUENT WORK WILL BE COMPLETED AT THE PLANNED

EXPENDITURES.

B ) ALL SUBSEQUENT WORK WILL BE COMPLETED AT THE PLANNED

EXPENDITURES, EXCLUDING THE WORK PACKAGES CURRENTLY UNDER WAY

C ) ALL SUBSEQUENT WORK WILL BE COMPLETED BASED UPON THE COST

PERFORMANCE TO-DATE

D ) THE COST PERFORMANCE CANNOT CHANGE DURING THE PROJECT

56
 8- WHAT TOOL MUST PROJECT MANAGERS RELY UPON
TO ACCURATELY IDENTIFY THE COSTS ASSOCIATED
WITH THE PROJECT?
A ) A BILL OF MATERIALS

B ) A GANTT CHART

C ) A PRECEDENCE DIAGRAM NETWORK

D ) A WORK BREAKDOWN STRUCTURE

57
 9- A COST PERFORMANCE INDEX (CPI) OF 0.89
MEANS ?
A ) AT THIS TIME ,WE EXPECTED THE TOTAL PROJECT TO COST 89 PERCENT MORE THAN
PLANNED.

B ) WHEN THE PROJECT COMPLETED WE WILL HAVE SPENT 89 PERCENT MORE THAN PLANNED.

C ) THE PROJECT ONLY PROGRESSING AT 89 PERCENT OF THE RATE PLANNED.

D ) THE PROJECT IS ONLY GETTING 89 CENTS OUT OF EVERY DOLLAR INVESTED.

58
 10- A COST BASE LINE IS AN OUTPUT OF WHICH COST
MANAGEMENT PROCESSES:

A ) ESTIMATE ACTIVITY RESOURCE.

B ) ESTIMATE COSTS.

C) DETERMINE BUDGET.

D ) CONTROL COST.
59