Agenda

2 Project Budget

Elapsed Time 5 minutes

0 Instructor Introduction 3 minutes

0 Agenda review 2 minutes

0 Chapter of the week 50 minutes

0 Q&A of chapter 10 minutes

0 Break 10 minutes

0 Exercises 25 minutes 0 Round table 15 minutes

0 Closure 5 minutes

Content 0 Creating the Project Cost Management Plan

0 Estimating Costs

0 Cost Budget Baseline

0 Communications Plan

Project Budget 3

Creating the Project Cost Management Plan

0 The cost management plan establishes the format and conditions you’ll use to plan for project costs.

0 This plan is established using the WBS and its associated control accounts

4 Project Budget Initiation Execution Monitoring Closing Planification

Creating the Project Cost Management Plan

5 Project Budget

Some of the elements of this plan are:

• Level of accuracy

• Units of measure

• Organizational procedures links

• Control thresholds

• Rules of performance measurement

• Reporting formats

• Process descriptions

Initiation Execution Monitoring Closing Planification

Estimating Costs

6 Project Budget

0 This process develops a cost estimate for the resources (human and material) required for each schedule activity.

Initiation Execution Monitoring Closing Planification

Estimating Costs

7 Project Budget

Alternative options for cost estimation:

• Make versus buy

• Buy versus lease

• Sharing resources across projects or departments

Initiation Execution Monitoring Closing Planification

Cost Budget Baseline

8 Project Budget

0 This process aggregates the estimated costs of individual activities or work packages to establish and authorized cost baseline

Initiation Execution Monitoring Closing Planification

Cost Budget Baseline

9 Project Budget

Cost performance baseline:

• It is an authorized time-phased budget at completion (BAC) used to measure, monitor and control overall cost performance of the project.

How Cost Performance Baseline is developed:

• As a summation of the approved budgets by time period

How Cost Performance Baseline is typically displayed:

• It is typically displayed in the form of an S-curve

Initiation Execution Monitoring Closing Planification

Communications Plan

10 Project Budget

0 This process involves determining the communication needs of the stakeholders by defining:

• Types of information needed

• Format for communicating the information

• How often it’s distributed

• Who prepares it

Initiation Execution Monitoring Closing Planification

Communications Plan

11 Project Budget

Lines of communication:

• Network model with nodes and lines connecting the nodes.

• These lines indicate the number of communication channels.

Formula for calculating the lines of communication

• Participants (Participants -1) / 2

Initiation Execution Monitoring Closing Planification

Questions or comments

12

Elapsed time 55 minutes

13

Break: 10 minutes

Elapsed time 65 minutes

14

Exercises

Elapsed time 75 minutes

15

Round table

Elapsed time 100 minutes

16

Tips for the exam

Elapsed time 115 minutes

0 The primary output of Estimate Costs is activity cost estimates.

0 Be able to identify the tools and techniques of Estimate Costs process.

0 Be able to identify additional general management techniques that can be used in the Project Cost Management Knowledge Area.

0 The cost performance baseline is displayed as an S curve

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0 Bibliography:

0 Heldman, Kim. PMP® Project Management Professional Exam Study Guide. Sybex. Wiley Publishing, Inc. 5th ed. 2009.

0 Project Management Institute, Inc. A guide to the Project Management Body of Knowledge (PMBOK). 4th ed. 2008.

0 Authors:

0 Iván Guillén Franco, PMP®

0 Luis Catalán, PMP®

0 Roberto Burgos, PMP®

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