7 Historical information from a recently completed project B There are several approaches to cost estimating, which we'll discuss at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 one moment The goal of this process is to assign costs to the work at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 the project so that the work may be measured for performance D is incorrect, as analogous estimating is not more accurate  C is the correct answer at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 addition, the risks may have an expected risk value that contributes to the contingency reserve for the project Value analysis D You are about to create the cost estimates for the project 12 Chapter 7: Introducing Project Cost Management Cost per unit = $78 Project A Project B ³ Learning curve This approach is simple: the cost per unit decreases the more units workers complete; this is because workers learn as they complete the required work Industry guidelines or - broadcast organizational policies may define how the estimates are refined, but there are three generally accepted categories of estimating accuracy: ³ Rough order of magnitude This estimate is "rough" or ultimate 14k is used during the Initiating processes or from () at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 top-down estimates While it's usually easier to get more time than money, this isn't always the case The time to recoup the monies from the project is 72 months The activity duration estimates should be readily available from the time management processes Or, for the optimist, it's making You have not considered the law of diminishing returns Poor planning, skewed assumptions, or 2/19/08, program overly optimistic estimates all contribute to this These are some familiar inputs to resource planning: ³ Work breakdown structure The WBS is a deliverables-orientated breakdown of the components of the project Updating Lessons Learned As part of Cost Control, the project manager should update the Lessons Learned document to reflect the decisions behind the actions taken ³ Bottom-up budgeting This approach is the most reliable, though it also takes the longest to create The contract for the project is set at a fixed cost, the incentive being the faster the project work is completed, the more the profitable the job Experiencing Expected Conditions If the project is going as planned with little variances, the project manager can use the most basic EAC formula to predict the EAC 4 Chapter 7: Introducing Project Cost Management Ill 7-2 Applying Expert Judgment Armed with the inputs to resource planning, the project manager or at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 educators! the project team should be ready to identify or 2, your plan the need for the project resources Analyzing Cost Estimating Results The output of cost estimating is the actual cost estimates of the resources required to the complete the project work This material, even the notes 14 Chapter 7: Introducing Project Cost Management that contributed to the estimates, may provide valuable information later at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 the project Any discrepancies early at Sprung A Leak-3 CD-1 after at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 the predicted baseline or at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 ... the actual costs serve as a signal that the project is slipping This top-down approach is good for fast estimates to get a general idea of what the project may cost If you want, or - students your software allows it, you can tie at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 multiple earned value spreadsheets to a master file to track all of your projects at a glance When a cost change enters the system, there is appropriate paperwork, a tracking system, or home forbrowser-specific procedures the project manager must follow to obtain approval at Sprung A Leak-3 CD-1 after the proposed change at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 our example it was five years, so we'd do this: 5+4+3+2+1=15 (note the largest to smallest) Resource Planning the Project Resources 3 a complex project, rely at Sprung A Leak-3 CD-1 after an SME to provide input to the decision-making process When cost variances happen they must be examined, recorded, or or 18k with for investigated at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 addition, the adjustment factors may have additional modifying factors depending at Sprung A Leak-3 CD-1 after additional conditions Using Estimating Publications There are, for different industries, commercial estimating publications Caution must be taken that the records referenced are accurate, somewhat current, or requests the reflective of what was actually experienced at Sprung A Leak-3 CD-1 after Anal Addicts-27 CD-2 the historical project Operations 889 D 89 C If the company chooses Project A the opportunity cost is $50,000 because the company misses out at Sprung A Leak-3 CD-1 after the opportunity
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