Summary of project cost management

Project cost management includes cost estimation, cost budgeting, cost control     project cost Management The cost of the resources required to complete the project activities, as well as the impact of project decisions on the use of project product costs. Project cost management also takes into account the information needs of the stakeholders. The actual cost of the project must be controlled in order to achieve the project objectives, otherwise the cost of the project will be out of control. The main reasons for the cost out of control are:    1) cost estimation and budget is not accurate; 2) there is no uniform standards and norms are feasible; 3) There are misunderstandings in thinking 1. Cost estimation   Cost estimation: Approximate estimates of the cost of various resources required to complete the activities of each project.           Cost estimates continue to be clear and accurate as the project progresses: input of the project scope statement, WBS, WBS dictionary, Project management plan, enterprise environmental factors, and organizational process assets   Tools and techniques for cost estimation: analogy estimation, determination of resource rate, bottom-up cost estimation, project management software, vendor bid analysis, reserve analysis (used to determine expected but uncertain events), quality cost   cost estimates output: Project cost estimates, updated project cost management plans, Requested changes, project-supported files and Results 2. Cost budgeting   Cost budgeting: allocating the estimated cost of the project to the specific work of the project to determine the cost ration of the project's work and activities, and to establish the control standard for the project cost. The three functions of   cost budget: 1) The activities of allocating project resources according to plan; 2) is a control mechanism; 3) is a constraint mechanism   cost budgeting step:      1) First allocate total cost to work package for WBS      2) Assign work package costs to activities      3) determine cost budget spending time plan and project cost budget plan   cost budget input: WBS dictionary, activity cost estimate   Cost Budgeting tools: Total cost, management reserve, parametric model   cost budget output: Cost baseline plan, project management plan, capital requirements       Large projects may have multiple cost baselines to measure all aspects of project performance 3. Cost control   Cost Control: Project organization to ensure that under the changing conditions to achieve its budget costs, in accordance with the pre-developed plans and standards, through the use of various methods, the implementation of the project in the actual costs incurred in comparison with the planned costs, as far as possible to control the project's time cost within the planning and budget management process andnbsp The main contents of the project cost control include:      1) to influence the factors that cause the project cost benchmark to be changed      2) to work package, supervise the implementation of the cost     & NBSP;3) to take corrective action on the cost deviation incurred      4) to notify the project personnel      5) of the approved cost change and Adjusted cost baseline plan to prevent errors, Costs incurred for inappropriate or unauthorized project changes are included in project cost estimates      6) When changes occur, the key to managing the actual change   cost control is to analyze cost performance   cost control inputs: cost benchmarks, cost performance reports, Work performance information, approved change requisitions, project management plans   cost control techniques and tools: Cost change control system, performance measurement, budgeting technology, project performance evaluation   Cost control output: Updated cost estimates, updated cost baselines, performance measures, forecast completion

Summary of project cost management