The document provides an overview of cost management processes from Chapter 7 of the CAPM exam prep material, including planning cost management, estimating costs, determining the budget, and controlling costs. It also discusses quality management processes from Chapter 8, including planning quality management, managing quality, and controlling quality. Key points are outlined for each process such as developing cost estimates, using earned value management to track performance, and quality tools like fishbone diagrams and control charts.

1. Certified Associate Project Management
CAPM® Exam Prep – Week 4
Prof. Muzette Charles, PMP | mcharles2@pace.edu

2. Schedule Management
Chapter 6 - Review

3. Schedule Management
Chapter 6 - Review

4. Schedule Management
Chapter 6 - Review

5. Cost Management
Chapter 7
“… includes the processes involved in planning, estimating, budgeting, financing, funding,
managing & controlling costs so that the project can be completed within the approved
budget.”
Process Process Group Key Deliverables
7.1 Plan Cost Management Planning Cost Management Plan
7.2 Estimate Costs Planning Activity cost estimates
7.3 Determine Budget Planning Cost Baseline (budget)
7.4 Control Costs Monitoring & Controlling Change Requests

6. Cost Management
Chapter 7
Plan Cost Management
Process 1
Key Points
 Provides guidance on how costs aka budget, will be managed throughout the project
 Aligns with Schedule baseline estimates, units of measure, level of accuracy (+/- %)
 Funding decisions: existing funds, equity or debt

7. Cost Management
Chapter 7
Estimate Costs
Process 2
Key Points
 Developing the monetary cost each activity needed to complete the project
 Cost estimates are a prediction based on info known at a given point in time & is constantly reviewed
 Expected accuracy: initially ROM -25% to +75% , Budget -10% to +25%, Definitive -5% to +10%
 Usually expressed in currency: dollars, euros, yen, etc

8. Cost Management
Chapter 7
Determine Budget
Process 3
Key Points
 Budget: all the calculated funds authorized to execute the project, includes reserves
 Cost baseline: the approved version of the budget, less Management Reserves, used as a
benchmark for variance analysis to measure project’s success.
 Reserve Analysis: Contingency Reserve & Management Reserve
 Funding Limit Reconciliation: PM is responsible to not exceed funding limits

9. Cost Management
Chapter 7Control Costs
Process 4
Key Points
 Earned Value Mgmt (EVM):
 Tracks how is your project doing compared to plan
 Variances & forecast future performance, cost & completion date
 Performance Measurement Baseline: integrates cost, time & scope to predict variance, correct &
minimize risk

10. Cost Management
Chapter 7
Control Costs
Process 4
Project is on Track: .95 < CPI or SPI < 1.10 (Industry Rule)

11. Cost Management
Chapter 7

12. Quality Management
Chapter 8
“… works to ensure the project requirements, including product requirements are met & validated.”
• “Project is completed with no deviations from the project requirements.”
• Customer satisfaction – project meets the defined customer needs
• Continuous improvement: Plan-Do-Check-Act (PDCA) is the basis for quality improvement
• Prevention over inspection
• Management responsibility
Process Process Group Key Deliverables
8.1 Plan Quality Management Planning Quality Management Plan
8.2 Manage Quality Executing Change Requests
8.3 Control Quality Monitoring & Control Validated Changes

13. Quality Management
Chapter 8
Plan Quality Management
Process 1 Key Points
 “… identifying quality requirements and/or standards for the project & its deliverables & documenting how the
project will demonstrate compliance with quality requirements and/or standards.”
 Conformance to requirements: Customer Satisfaction & Fitness for use
 Quality vs Grade: It does what you NEED it to do vs people VALUE the product
 Baseline key inputs: Scope/WBS, deliverables, Acceptance Criteria, Cost/approving funding, budget per period,
Schedule/milestone dates

14. Quality Management
Chapter 8
Plan Quality Management
Process 1
Key Points
7 Basic Quality Tools:
 Fishbone aka Ishikawa (Cause & Effect Diagram): see all defect causes by categories or see all
requirements & the factors that may cause defects
 Pareto Diagram: sorts frequency of defects in descending order – 80/20 Rule
 Histogram: vertical bar chart of potential problems
 Control Cart: if a process is stable or has predictable performance with upper/lower limits, Heuristic 7
 Scatter Diagram (Correlation charts): compares 2 types of data
 Flowcharts (Process Map): visualize how tasks/phases are interrelated/depend on each other SIPOC
model (supplier, input, process, output, customer)
 Checksheet (Tally Sheet): gathers data of product being tested

15. Quality Management
Chapter 8
Plan Quality Management
Process 1

16. Quality Management
Chapter 8
Manage Quality
Process 2
Key Points
 “…. The process of auditing the quality requirements & the results from quality control measurements to ensure
appropriate quality standards are used.”
 Seeks confidence that a future output or unfinished output will be completed in a manner to meet requirements
 Unfinished Output = Work in progress

17. Quality Management
Chapter 8
Manage Quality
Process 2

18. Quality Management
Chapter 8
Control Quality
Process 3
Key Points
 “… identifying causes of poor process or product quality & recommending and/or taking action to eliminate them.”
 “Validating that project deliverables meet the stakeholder’s requirements necessary for final acceptance.”
 Defects: Prevention (monitor quality) is ALWAYS better than Inspection (checking deliverables for defects)
 Cost-Benefit Analysis: Decreased Rework vs. Increased Production, Efficiency & Satisfaction

19. Quality Management
Chapter 8

20. CAPM Exam Prep
Group Exercise & Quiz 4