Cost Management Plan

1. Cost Management Plan

2. Cost Management Plan
“establishes the policies, procedures, and
documentation for planning, managing, expending
and controlling project costs.”
Project Management Institute. (2004). A guide to the project management body of knowledge (PMBOK guide).
Newtown Square, Pa: Project Management Institute.

3. Cost Collection Tools
 Expert Judgement
 Analytical Techniques
 Meetings

4. Cost Management Plans Establish
 Unit of Measure – staff hours, staff days, weeks for time
 Level of Precision – degree to which activity cost estimates
 Level of Accuracy – range of cost activities
 Organizational Procedures Link – work breakdown structure (WBS)
 Control Thresholds – variances
 Rules of Performance – earned value management (EVM)

5. Estimate Costs
 Develop approximation from monetary resources needed to complete project
activities
 Cost requirement to complete project activities
 Predictions based on information provided
 Refined and reviewed during course of project

6. Techniques to Estimate Costs
 Analogous Estimate – use values such as scope, cost, budget and duration
from previous and similar projects.
 Parametric Estimate – statistical relationship between relevant historical data
and other variables.
 Bottom-Up Estimate – estimate the component of work
 Cost of Quality (COQ) – cost of good quality and cost of poor quality

7. Determine Budget
 Estimated costs of individual activities or work packages
 Establish authorized cost baselines
 Includes all the funds authorized to execute the project

8. Control Costs
“monitor status of the project to update the project
costs and managed changes to the cost baselines.”
Project Management Institute. (2004). A guide to the project management body of knowledge (PMBOK guide).
Newtown Square, Pa: Project Management Institute.