(PMBOK GUIDE ) Sixth edition - 3FOLD Education Centre

1 Abu Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 1 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 1A GUIDE to thePROJECT MANAGEMENTBODY OF knowledge (PMBOK GUIDE ) Sixth editionChapter 7 project Cost ManagementPMBOK is a registered mark of the project management Institute, Inc 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 2 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 2 project Cost management . * project Cost management includes the processes involved in planning, estimating, budgeting, financing, funding, managing, and controlling costs so the project can be completed within the approved budget. Abu Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre .

2 All rights reserved .. PMP Exam Review Slide # 3 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 3 TopicA cost that does not change with an increase or decrease in the amount of goods or services CostGeneral ConceptsDescriptionCosts that vary depending on a company's production volume; they rise as production increases and fall as production decreasesVariable CostA price that can be completely attributed to the production of specific goods or CostCosts that are not directly accountable to acost object(such as a particular project , facility, function or product).Indirect Cost 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 4 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 4 TopicIn economics and business decision-making, a sunk costis a costthat has already been incurred and cannot be recovered.

3 Sunk CostGeneral ConceptsDescriptionThe process of identifying and documenting all the costs involved over the life of an asset is known as Life Cycle Costing (LCC).Lifecycle CostThe loss of other (highest) alternatives when one alternative is CostAbu Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 5 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 5 TopicValue engineering(VE) is a systematic method to improve the "value" of goods or products and services by using an examination of , as defined, is the ratio of function to can therefore be increased by either improving the function or reducing the EngineeringGeneral ConceptsDescriptionCost escalationis defined as changes in thecostor priceof specific goods or services in a given economy over a EscalationIn economics,inflationis a sustained increase in the general price level of goods and services in an economy over a period of 3 FOLD Education Centre .

4 All rights reserved .. PMP Exam Review Slide # 6 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 6 Chapter Plan Cost Estimate Determine Control CostsProject Cost ManagementAbu Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 7 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # Plan Cost management . *The process of defining how the project costs will be estimated, budgeted, managed, monitored, and controlled. 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 8 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # Plan Cost management (ITTO) project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc.

5 , 2017, Fig. 7-2, Page Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 9 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # Estimate Costs. The process of developing an approximation of the monetary resources needed to complete project work. 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 10 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # Estimate Costs (ITTO) project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc., 2017, Fig. 7-4, Page Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 11 3 FOLD Education Centre .

6 All rights reserved .. PMP Exam Review Slide # Determine Budget. *The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 12 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # Determine Budget (ITTO) project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc., 2017, Fig. 7-6, Page Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 13 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 13In bottom-up cost aggregation, individual activities are added up, or : Cost Aggregation 3 FOLD Education Centre .

7 All rights reserved .. PMP Exam Review Slide # 14 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 14 project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc., 2017, Fig. 7-8, Page Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 15 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 15 project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc., 2017, Fig. 7-9, Page Baseline, Expenditures, and Funding Requirements 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 16 3 FOLD Education Centre .

8 All rights reserved .. PMP Exam Review Slide # Control Costs. *The process of monitoring the status of the project to update the project costs and manage changes to the cost baseline. Abu Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 17 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 17 Process covered in this Control Control Costs: Control Costs: Tools and Control Costs: Outputs 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 18 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # Control Costs (ITTO) project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc.

9 , 2017, Fig. 7-10, Page Dhabi : 02-6670660 Dubai: 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 19 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 19 InputsCost management plan, cost baseline and performance measurement baseline are inputs to this management Control Costs -InputsRelevanceLessons learned Documents12 The project funding requirements are an important input into the Control Costs process because they enable you to determine when expenditures will be incurred and when funding for the project will be available and to therefore assess actual versus planned project funding requirements and control any changes to these Funding Requirements3 project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc.

10 , 2017, Fig. 7-10, Page 257. 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 20 3 FOLD Education Centre . All rights reserved .. PMP Exam Review Slide # 20 InputsThe types of organizational process assets that will be useful as inputs into the Control Costs process are any existing organizational policies, procedures, templates, or any other element relating to how costs will be monitored and reported on in your Process Control Costs -InputsRelevance5 Work performance data contains data on project status such as which activities have started, their progress ( , actual duration, remaining duration, and physical percent complete), and which activities have Performance Data4 project management Institute, A GUIDE to the project management body of knowledge , ( pmbok GUIDE ) Sixth edition , project management Institute Inc.