1. What is the output of the plan cost management process
Cost Management Plan
2. What are the key inputs to the Estimate Cost process
- Cost Management Plan
- Quality Management Plan
- Scope Baseline
- Lessons learned register.
- Project Schedule
- Resource Requirements
- Risk Register
- Enterprise Environmental factors
- Organizational Process Assets
- Project Management Costs
3. What are the key outputs of the Estimate Costs process
- Cost Estimates
- Basis of Estimates
- Updates to project documents
4. What are the key outputs of the determined budget process
- Cost Baseline
- Project funding Requirements
- Updates to Project Documents
5. What are control thresholds. When are they determined
The amount of variation allowed before you meet to take action
Determined while creating the cost management plan.
6. How do variable costs differ from fixed costs
Variable costs change with the amount of production or amount of work done on the project
Fixed Costs do not change as production changes
7. What is direct and indirect cost
Direct Cost – A cost that is directly attributable to the work on the project.
Indirect Cost – Overhead costs or costs incurred for the benefit of more than one project
8. Name the advantages of analogous estimating and bottom-up estimating
Analogous –
- Quick
- Activities do not need to be identified.
- Less costly to create.
- Project Manager will have data to evaluate high-level project feasibility.
- Overall project costs will be capped.
Bottom-up –
- More accurate
- Gains buy-in from the team.
- Based on a detailed analysis of the project and the deliverables
- Provides a basis for monitoring and controlling, performance measurement and management.
9. Name the typical range for the following
- Rough order of magnitude (ROM) estimate -> -25 to +75 percent from actual
- Budget Estimate -> -10 percent to +25 percent from actual
- Definitive estimate -> +/-10 percent from actual
10. At what point are contingency reserves added to the budget
After risk management planning
11. What agile tool can be used to anticipate future budgetary issues on agile projects
Velocity
12. What is the difference between a cost budget and a cost baseline
The cost budget adds management reserves to the cost baseline.
13. On adaptive projects the majority of cost estimates for projections and estimates at completion are based on what
Burn Rates
14. How can progress reporting help the project manager
It can help control schedule and costs. It can help the project manager assess whether the project is on track through earned value analysis.
15. What is reserve analysis
Reserve analysis involves identifying which activities on the project have significant risks and determining how much time and money to set aside to account for those risks in case they occur.
16. What is earned value analysis and how is it used
It is used in performance reviews to measure project performance against the scope, schedule, and cost baselines. Using the work performance information gathered through earned value analysis, a project manager can create reports, including cost forecasts and other communications related to the projects progress, it may also result in change requests.
17. What combined baselines are called the performance measurement baseline
Scope, Schedule, and Cost baselines
18. What is the difference between planned value and earned value
Planned value is the estimated value of the work planned as of today.
Earned value is the estimated value of the work accomplished as of today.
19. What is the actual cost and what is the budget at completion
The actual cost incurred for the work accomplished as of today. The project’s planned budget indicates what the end cost of the project would be if everything went according to plan.
20. What is the formula of cost variance CV
EV (Earned Value) – AC (Actual Cost) = CV
21. What is the formula for cost performance index CPI
EV (Earned Value) / Actual Cost = CPI
The Cost Performance Index (CPI) is a method for calculating the cost efficiency and financial effectiveness of a specific project through the following formula: CPI = earned value (EV) / actual cost (AC). A CPI ratio with a value higher than 1 indicates that a project is performing well budget-wise.
22. What is the formula for schedule performance index SPI
EV (Earned Value) / PV (Planned Value) = SPI
Schedule Performance Index as the ratio of earned value to planned value. It is an indicator of the project’s efficiency concerning the schedule or time. The period can be specific or cumulative for a part of a project or an entire project. The project manager will have a value of less than 1 (project behind schedule), of 1 (project on schedule), or greater than 1 (project ahead of schedule). From the resulting SPI calculation, subtract 1 to determine what percent the work is behind or ahead of the planned schedule.
23. What does a positive number indicate for CV (Cost Variance) or SV (Schedule Variance)
A positive number indicates that the project is under budget (CV) or ahead of schedule (SV).
A negative number indicates that the project is over budget (CV) or behind schedule (SV).
24. What does the number less than one indicate with SPI and CPI
Greater than one is good, and less than one is bad.