The document provides information about estimating project costs, including:
1. It discusses key principles of project cost estimating such as integrity, using the best information, accounting for risks and uncertainties, using an expert estimating team, and validating estimates.
2. It describes types of project costs as variable vs fixed costs and direct vs indirect costs. It also discusses opportunity costs.
3. It explains that cost estimates show the monetary and time resources needed to complete a project, and outlines the typical components of a cost estimate spreadsheet.
4. It outlines the key steps in a project cost estimation process, including breaking work into tasks, evaluating tasks, and estimating resources needed based on task complexity and size. It provides an
1) Estimation is an essential part of project management used to justify projects, secure resources, understand support impacts, and improve processes.
2) The document describes estimation techniques including three point estimation and base and contingency estimation.
3) Three point estimation uses best, most likely, and worst case estimates to calculate expected value and standard deviation for tasks and projects. Base and contingency separates estimates into minimum bases and risk-based contingencies.
WHAT IS COST ESTIMATION IN PROJECT MANAGEMENT AND THEIR TYPES?MirzaNuman1
There are different types of Cost estimation in project management. But, Here we have mentioned 4 types of cost estimation in project management that are most commonly used by cost estimators for construction.
This document discusses risk management, cost control, and communication in construction projects. It describes how risk management involves identifying, assessing, and treating risks through various models and communication is key. It also explains that cost control is important for meeting project goals and involves establishing budgets, monitoring costs, and controlling changes. Effective risk management, cost control, and communication are important for construction project success.
The document discusses several techniques for cost estimation:
Parametric uses statistical models to relate costs to independent variables. Analogy estimates costs based on historical data from analogous systems, adjusting for differences. Engineering estimates break systems into components and aggregate labor, materials, and overhead costs. Actual costs project future costs based on experience from prototypes and early production. Cost estimation provides efficiency and control but requires accurate models and data. Demand estimation derives the relationship between demand and factors like price and income to inform pricing and other decisions. Surveys for demand estimation face tradeoffs between information and reliability versus cost and complexity.
WHAT IS COST ESTIMATION IN PROJECT MANAGEMENT AND THEIR TYPES?MirzaNuman1
There are different types of Cost estimation in project management. But, Here we have mentioned 4 types of cost estimation in project management that are most commonly used by cost estimators for construction.
Exploration of risks and risk management in construction project deliveryMECandPMV
Risks are pervasive throughout construction projects and need to be properly managed. This document discusses:
1) Various types of risks that occur during different phases of the project life cycle from planning to construction.
2) How the selection of a project delivery system, such as design-bid-build or design-build, can impact risks related to costs, schedule and control.
3) Qualitative and quantitative risk analysis methods that can be used to identify, prioritize and evaluate risks, such as cause-and-effect diagrams and decision analysis.
This document presents a case study evaluating an integrated schedule and cost risk analysis method using Monte Carlo simulation for a construction project in Vietnam. The study found the method to be effective compared to traditional approaches by identifying more risks and their impacts. It provides step-by-step guidelines for implementation. The analysis of a sample project found very low probabilities of completing on schedule and within budget. Simulated risk mitigation scenarios allowed analysis of strategies to improve outcomes. While effective, the author notes limitations and recommendations for refining and testing the approach in additional projects.
PetroSync - Cost Engineering Risk Management-Earned Value ManagementPetroSync
Will cover the latest techniques and practical methodologies of project cost engineering and risk management to successfully manage project cost and risk, in order to maximize business ROI in the long run.
1) Estimation is an essential part of project management used to justify projects, secure resources, understand support impacts, and improve processes.
2) The document describes estimation techniques including three point estimation and base and contingency estimation.
3) Three point estimation uses best, most likely, and worst case estimates to calculate expected value and standard deviation for tasks and projects. Base and contingency separates estimates into minimum bases and risk-based contingencies.
WHAT IS COST ESTIMATION IN PROJECT MANAGEMENT AND THEIR TYPES?MirzaNuman1
There are different types of Cost estimation in project management. But, Here we have mentioned 4 types of cost estimation in project management that are most commonly used by cost estimators for construction.
This document discusses risk management, cost control, and communication in construction projects. It describes how risk management involves identifying, assessing, and treating risks through various models and communication is key. It also explains that cost control is important for meeting project goals and involves establishing budgets, monitoring costs, and controlling changes. Effective risk management, cost control, and communication are important for construction project success.
The document discusses several techniques for cost estimation:
Parametric uses statistical models to relate costs to independent variables. Analogy estimates costs based on historical data from analogous systems, adjusting for differences. Engineering estimates break systems into components and aggregate labor, materials, and overhead costs. Actual costs project future costs based on experience from prototypes and early production. Cost estimation provides efficiency and control but requires accurate models and data. Demand estimation derives the relationship between demand and factors like price and income to inform pricing and other decisions. Surveys for demand estimation face tradeoffs between information and reliability versus cost and complexity.
WHAT IS COST ESTIMATION IN PROJECT MANAGEMENT AND THEIR TYPES?MirzaNuman1
There are different types of Cost estimation in project management. But, Here we have mentioned 4 types of cost estimation in project management that are most commonly used by cost estimators for construction.
Exploration of risks and risk management in construction project deliveryMECandPMV
Risks are pervasive throughout construction projects and need to be properly managed. This document discusses:
1) Various types of risks that occur during different phases of the project life cycle from planning to construction.
2) How the selection of a project delivery system, such as design-bid-build or design-build, can impact risks related to costs, schedule and control.
3) Qualitative and quantitative risk analysis methods that can be used to identify, prioritize and evaluate risks, such as cause-and-effect diagrams and decision analysis.
This document presents a case study evaluating an integrated schedule and cost risk analysis method using Monte Carlo simulation for a construction project in Vietnam. The study found the method to be effective compared to traditional approaches by identifying more risks and their impacts. It provides step-by-step guidelines for implementation. The analysis of a sample project found very low probabilities of completing on schedule and within budget. Simulated risk mitigation scenarios allowed analysis of strategies to improve outcomes. While effective, the author notes limitations and recommendations for refining and testing the approach in additional projects.
PetroSync - Cost Engineering Risk Management-Earned Value ManagementPetroSync
Will cover the latest techniques and practical methodologies of project cost engineering and risk management to successfully manage project cost and risk, in order to maximize business ROI in the long run.
The document discusses qualitative and quantitative risk analysis methods in project risk management. It defines risk and describes qualitative analysis which involves assessing probability and impact through a risk matrix. Quantitative analysis numerically analyzes risk impact through tools like probability distributions, sensitivity analysis, and modeling. It provides examples of qualitative versus quantitative analysis and how qualitative analysis leads to quantitative analysis by identifying risks with the greatest effects. The overall process of risk management is also summarized.
This document discusses risk management for projects and programmes. It defines key risk management terms like known knowns, known unknowns, and unknown unknowns. It explains that risk management involves identifying, assessing, planning for, and implementing responses to significant uncertainties that could impact a project's objectives. The goal is to keep the level of risk exposure within the agreed risk appetite in a cost-effective manner through an iterative process.
Project risk analysis methodology and how RiskyProject software can be used for quantitative project risk analysis.
For more information how to perform schedule risk analysis using RiskyProject software please visit Intaver Institute web site: http://www.intaver.com.
About Intaver Institute.
Intaver Institute Inc. develops project risk management and project risk analysis software. Intaver's flagship product is RiskyProject: project risk management software. RiskyProject integrates with Microsoft Project, Oracle Primavera, other project management software or can run standalone. RiskyProject comes in three configurations: RiskyProject Lite, RiskyProject Professional, and RiskyProject Enterprise.
The document discusses project risk management. It defines risk as a function of uniqueness and experience. There are two types of risks: business risks relating to gains/losses, and pure risks which only have downsides. The risk management process involves identifying risks early and throughout the project. Risks can then be avoided, mitigated, transferred to a third party, or accepted. Common risk responses include changing plans to avoid risks, reducing probability/impact of risks, assigning risks to third parties, and simply accepting small risks. Preparing for risks requires analyzing and prioritizing them based on likelihood and impact.
EFFECTS OF RISK MANAGEMENT METHODS ON PROJECT PERFORMANCE IN RWANDAN CONSTRUC...Sibo Kanyambari Aimable
Risks are very common in construction sector. Risk is the Possibility of suffering loss and the impact on the involved parties. According to APM (2006), all projects are inherently risky because they are unique, constrained, complex, based on assumptions, and performed by people. As a result, project risk management methods must be built into the management of projects and should be used throughout the project lifecycle.
Many construction projects fail because organizations assume that all the projects would succeed and they therefore do not identify, analyze, and provide mitigation or contingencies for the risk elements involved in the project.
Society desires that all projects should be performing and has become less tolerant of failure (Edwards and Bowen, 2005). Pressure is exerted on project managers to minimize the chance of project failure. This increasing pressure for performance which suggests that it is prudent for anyone involved in a project to be concerned about the associated risks and how they can be effectively managed.
Traditionally, performance of a project is analyzed on the criteria of quality, budget and time of completion. Two more criteria to determine the performance of a project were added by Kerzner (2001). Firstly, the project would effectively and efficiently manage risks and, secondly, it should be accepted by the customer.
It is known that the cause of the projects failure can be directly related to the extent of risk management methods undertaken. Besides, the level of risk management methods undertaken during project lifecycle impacts directly on the performance or otherwise of the project. Furthermore, using risk management methods effectively to manage risk should be continuously undertaken throughout the project lifecycle to enhance project performance. Risk management methods are thus an important tool to cope with such substantial risks in projects performance.
The main objective of the enquiry work that underpins this research is to investigate the effect of risk management methods on project performance. In this paper, a case study of RSSB multi-storey already executed project is considered.
The document discusses project risk management. It defines project risk as the loss multiplied by the likelihood. Successful project leaders plan thoroughly to understand challenges, anticipate problems, and minimize variation. Project failures can occur if objectives are impossible, deliverables are possible but other objectives are unrealistic, or feasible deliverables and objectives but insufficient planning. Risk management includes qualitative and quantitative risk assessment to understand probability and impact of risks. It is important to document risks, have risk management plans, and regularly review assumptions and risks.
The document discusses project risk management based on the PMBOK and other sources. It addresses when and how to conduct risk management, including the key project management process groups of initiating, planning, executing, monitoring and controlling. The planning process group is most important for risk management and involves processes like developing risk management and response plans, identifying and analyzing risks qualitatively and quantitatively, and updating the risk register. A variety of risk management tools can be used including the risk register, risk breakdown structure, impact scales, and quantitative analyses.
This document outlines the risk management process for a case study project. It includes:
1. The risk management process with 6 steps: plan, identify, analyze qualitatively, analyze quantitatively, plan responses, and control risks.
2. A risk register containing 16 identified risks for the project with details like probability, impact, risk response strategies.
3. An update to the risk register after 29 months with one risk removed.
The document provides an overview of the risk management process applied to a case study project and the resulting risk register and monitoring.
This document presents a framework for appraising and justifying education projects for the Asian Development Bank. The framework aims to provide a standardized, logical approach for project design, appraisal, and assessment. It emphasizes sustainability and efficiency. Key elements include analyzing a country's educational policy context and sustainability issues, assessing proposed projects' internal efficiency and potential external impacts, and evaluating alternatives in terms of cost-effectiveness. While full economic analysis of costs and benefits is usually not feasible for individual projects, the framework provides guidance on qualitative and partial quantitative analyses.
Project Controls Expo, 18th Nov 2014 - "Schedule Risk Analysis for Complex Pr...Project Controls Expo
Schedule Risk Analysis is used on a wide range of projects as an established technique for identifying the uncertainties that threaten (or enhance) project success. However, applying the technique effectively to produce valid results on large and complex projects poses more of a challenge. This presentation summarises an approach to conducting schedule risk modelling for complex, long-term engineering projects, avoiding common pitfalls, and ensuring that outputs can be used to actively influence the project’s outcome.
This document discusses the differences between qualitative and quantitative risk analysis. Qualitative analysis involves identifying and prioritizing risks by likelihood and impact, while quantitative analysis assigns monetary values to risks to determine if projects can be completed on time and budget. The document recommends using a combination of both for the IRTC customer service system project to accurately assess risks. It provides an example of a Norwegian project that used quantitative data from a SCADA system to facilitate risk analysis updates.
The document discusses project management process groups and knowledge areas. It begins with an introduction of the author and project. There are 5 process groups that make up the project lifecycle: initiating, planning, executing, monitoring and controlling, and closing. The 9 knowledge areas that define project elements are also introduced: integration management, scope management, time management, cost management, quality management, human resource management, communication management, risk management, and procurement management. The document then provides more details about each process group and knowledge area and their importance for properly managing the project.
Estimating for projects and programmes is a core project management competence. Estimating uncertainty is generally the largest single risk to project delivery. Here, estimating best practice is described along with a few hints and tips.
The document provides guidelines for project risk management based on the six risk management processes from the PMBOK Guide. It discusses identifying risks, performing qualitative and quantitative risk analysis, planning risk responses, and controlling risks. An example application to a PMP certification course project is provided to demonstrate practical use of identifying risks, creating a risk register, and customizing a risk breakdown structure for the project.
NCV 4 Project Management Hands-On Support Slide Show - Module5Future Managers
This slide show complements the Learner Guide NCV 4 Project Management Hands-On Training by Bert Eksteen, published by Future Managers. For more information visit our website www.futuremanagers.net
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within its approved budget. A cost management plan establishes how project costs will be planned, structured, estimated, budgeted, and controlled. Cost estimates are developed by analyzing the resources needed to complete project activities using techniques like analogous estimating, parametric estimating, bottom-up estimating, and three-point estimating. Estimates are based on the project scope, schedule, risks, and other factors and are expressed in currency or other measurable units.
The document discusses qualitative and quantitative risk analysis methods in project risk management. It defines risk and describes qualitative analysis which involves assessing probability and impact through a risk matrix. Quantitative analysis numerically analyzes risk impact through tools like probability distributions, sensitivity analysis, and modeling. It provides examples of qualitative versus quantitative analysis and how qualitative analysis leads to quantitative analysis by identifying risks with the greatest effects. The overall process of risk management is also summarized.
This document discusses risk management for projects and programmes. It defines key risk management terms like known knowns, known unknowns, and unknown unknowns. It explains that risk management involves identifying, assessing, planning for, and implementing responses to significant uncertainties that could impact a project's objectives. The goal is to keep the level of risk exposure within the agreed risk appetite in a cost-effective manner through an iterative process.
Project risk analysis methodology and how RiskyProject software can be used for quantitative project risk analysis.
For more information how to perform schedule risk analysis using RiskyProject software please visit Intaver Institute web site: http://www.intaver.com.
About Intaver Institute.
Intaver Institute Inc. develops project risk management and project risk analysis software. Intaver's flagship product is RiskyProject: project risk management software. RiskyProject integrates with Microsoft Project, Oracle Primavera, other project management software or can run standalone. RiskyProject comes in three configurations: RiskyProject Lite, RiskyProject Professional, and RiskyProject Enterprise.
The document discusses project risk management. It defines risk as a function of uniqueness and experience. There are two types of risks: business risks relating to gains/losses, and pure risks which only have downsides. The risk management process involves identifying risks early and throughout the project. Risks can then be avoided, mitigated, transferred to a third party, or accepted. Common risk responses include changing plans to avoid risks, reducing probability/impact of risks, assigning risks to third parties, and simply accepting small risks. Preparing for risks requires analyzing and prioritizing them based on likelihood and impact.
EFFECTS OF RISK MANAGEMENT METHODS ON PROJECT PERFORMANCE IN RWANDAN CONSTRUC...Sibo Kanyambari Aimable
Risks are very common in construction sector. Risk is the Possibility of suffering loss and the impact on the involved parties. According to APM (2006), all projects are inherently risky because they are unique, constrained, complex, based on assumptions, and performed by people. As a result, project risk management methods must be built into the management of projects and should be used throughout the project lifecycle.
Many construction projects fail because organizations assume that all the projects would succeed and they therefore do not identify, analyze, and provide mitigation or contingencies for the risk elements involved in the project.
Society desires that all projects should be performing and has become less tolerant of failure (Edwards and Bowen, 2005). Pressure is exerted on project managers to minimize the chance of project failure. This increasing pressure for performance which suggests that it is prudent for anyone involved in a project to be concerned about the associated risks and how they can be effectively managed.
Traditionally, performance of a project is analyzed on the criteria of quality, budget and time of completion. Two more criteria to determine the performance of a project were added by Kerzner (2001). Firstly, the project would effectively and efficiently manage risks and, secondly, it should be accepted by the customer.
It is known that the cause of the projects failure can be directly related to the extent of risk management methods undertaken. Besides, the level of risk management methods undertaken during project lifecycle impacts directly on the performance or otherwise of the project. Furthermore, using risk management methods effectively to manage risk should be continuously undertaken throughout the project lifecycle to enhance project performance. Risk management methods are thus an important tool to cope with such substantial risks in projects performance.
The main objective of the enquiry work that underpins this research is to investigate the effect of risk management methods on project performance. In this paper, a case study of RSSB multi-storey already executed project is considered.
The document discusses project risk management. It defines project risk as the loss multiplied by the likelihood. Successful project leaders plan thoroughly to understand challenges, anticipate problems, and minimize variation. Project failures can occur if objectives are impossible, deliverables are possible but other objectives are unrealistic, or feasible deliverables and objectives but insufficient planning. Risk management includes qualitative and quantitative risk assessment to understand probability and impact of risks. It is important to document risks, have risk management plans, and regularly review assumptions and risks.
The document discusses project risk management based on the PMBOK and other sources. It addresses when and how to conduct risk management, including the key project management process groups of initiating, planning, executing, monitoring and controlling. The planning process group is most important for risk management and involves processes like developing risk management and response plans, identifying and analyzing risks qualitatively and quantitatively, and updating the risk register. A variety of risk management tools can be used including the risk register, risk breakdown structure, impact scales, and quantitative analyses.
This document outlines the risk management process for a case study project. It includes:
1. The risk management process with 6 steps: plan, identify, analyze qualitatively, analyze quantitatively, plan responses, and control risks.
2. A risk register containing 16 identified risks for the project with details like probability, impact, risk response strategies.
3. An update to the risk register after 29 months with one risk removed.
The document provides an overview of the risk management process applied to a case study project and the resulting risk register and monitoring.
This document presents a framework for appraising and justifying education projects for the Asian Development Bank. The framework aims to provide a standardized, logical approach for project design, appraisal, and assessment. It emphasizes sustainability and efficiency. Key elements include analyzing a country's educational policy context and sustainability issues, assessing proposed projects' internal efficiency and potential external impacts, and evaluating alternatives in terms of cost-effectiveness. While full economic analysis of costs and benefits is usually not feasible for individual projects, the framework provides guidance on qualitative and partial quantitative analyses.
Project Controls Expo, 18th Nov 2014 - "Schedule Risk Analysis for Complex Pr...Project Controls Expo
Schedule Risk Analysis is used on a wide range of projects as an established technique for identifying the uncertainties that threaten (or enhance) project success. However, applying the technique effectively to produce valid results on large and complex projects poses more of a challenge. This presentation summarises an approach to conducting schedule risk modelling for complex, long-term engineering projects, avoiding common pitfalls, and ensuring that outputs can be used to actively influence the project’s outcome.
This document discusses the differences between qualitative and quantitative risk analysis. Qualitative analysis involves identifying and prioritizing risks by likelihood and impact, while quantitative analysis assigns monetary values to risks to determine if projects can be completed on time and budget. The document recommends using a combination of both for the IRTC customer service system project to accurately assess risks. It provides an example of a Norwegian project that used quantitative data from a SCADA system to facilitate risk analysis updates.
The document discusses project management process groups and knowledge areas. It begins with an introduction of the author and project. There are 5 process groups that make up the project lifecycle: initiating, planning, executing, monitoring and controlling, and closing. The 9 knowledge areas that define project elements are also introduced: integration management, scope management, time management, cost management, quality management, human resource management, communication management, risk management, and procurement management. The document then provides more details about each process group and knowledge area and their importance for properly managing the project.
Estimating for projects and programmes is a core project management competence. Estimating uncertainty is generally the largest single risk to project delivery. Here, estimating best practice is described along with a few hints and tips.
The document provides guidelines for project risk management based on the six risk management processes from the PMBOK Guide. It discusses identifying risks, performing qualitative and quantitative risk analysis, planning risk responses, and controlling risks. An example application to a PMP certification course project is provided to demonstrate practical use of identifying risks, creating a risk register, and customizing a risk breakdown structure for the project.
NCV 4 Project Management Hands-On Support Slide Show - Module5Future Managers
This slide show complements the Learner Guide NCV 4 Project Management Hands-On Training by Bert Eksteen, published by Future Managers. For more information visit our website www.futuremanagers.net
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within its approved budget. A cost management plan establishes how project costs will be planned, structured, estimated, budgeted, and controlled. Cost estimates are developed by analyzing the resources needed to complete project activities using techniques like analogous estimating, parametric estimating, bottom-up estimating, and three-point estimating. Estimates are based on the project scope, schedule, risks, and other factors and are expressed in currency or other measurable units.
46R-11 Skills & Knowledge of Cost Estimators.pdfssuserad21d8
This document outlines the skills and knowledge required of project cost estimators. It discusses the cost estimating process, which includes planning the estimate, quantifying scope, applying costs, pricing the project, reviewing and validating the estimate. It also provides a competency model that structures the required skills and knowledge into areas like general concepts, estimating processes and practices, and other functional skills related to cost estimating. Project cost estimators are responsible for predicting all costs to complete a project given a defined scope. The skills required vary depending on whether one is estimating for an owner, engineering consultant, or construction contractor.
The document discusses project cost estimation, including the different components that must be estimated such as labor, equipment, supplies, and overhead costs. It describes several techniques that can be used for cost estimation, including analogous estimating based on similar past projects, parametric estimation using statistical models, and three-point estimation providing low, most likely, and high estimates. The document also covers bottom-up and top-down approaches to cost estimation, with bottom-up estimating each task separately and top-down first estimating total costs and then breaking it down. It emphasizes the importance of accuracy in cost estimation and choosing the appropriate technique depending on the project.
Cost Estimation method in engineering economicsSuman922623
Cost estimation is a critical process in project management that impacts project success. There are various methods for cost estimation, from traditional approaches using historical data and expert judgment to parametric models that use mathematical formulas based on project parameters and variables. Accurate cost estimation requires clearly defining project requirements, involving domain experts, accounting for potential risks and uncertainties, and regularly reviewing and updating estimates as the project progresses.
Cost management involves planning, estimating, budgeting, and controlling costs to complete a project within budget. Common cost estimating techniques include analogous, parametric, and bottom-up estimating. Earned value management is used to measure project performance by comparing planned, earned, and actual costs and schedules.
This document discusses best practices for construction cost estimating and project management. It emphasizes the importance of collaboration among all stakeholders in developing detailed, line-item cost estimates. It also outlines various types of cost estimates, cost categories, and techniques for ongoing cost control such as earned value management. Key principles include transparency, independent cost research, and updating estimates over time based on changes to requirements or conditions.
This document provides guidance for developing cost estimates for WSDOT projects. It outlines WSDOT's cost estimating process, which involves determining the basis of the estimate, preparing a baseline estimate, reviewing the estimate, performing a risk assessment, determining how to communicate the estimate, and obtaining management endorsement. The document provides definitions of key terms and describes cost estimating methodology and how estimating is conducted during different project phases from planning through PS&E. It also addresses training, documentation, data, specialty estimating areas, and reviews. The overall aim is to promote reliable and accurate cost estimating that supports responsible fiscal management and effective project delivery.
This document provides an overview of basic project management concepts. It discusses that a project has defined scope, time, cost, quality and resource constraints. The key aspects of project management include planning the work, working the plan, and endorsing the plan. The project manager's role is to manage expectations, direct the team, track progress, communicate status, and resolve issues. Effective project management balances the triple constraints of scope, time and cost. The project life cycle begins with initiation, which involves defining objectives, assembling a team, and getting approval. Planning then further develops the scope, schedule, budget, risks and other elements of the project.
This document provides an overview of project cost management processes including plan cost management, estimate costs, determine budget, and control costs. Key concepts such as earned value management, cost estimating techniques like three-point estimating, and terms like cost baseline and management reserve are defined. The document also discusses trends in project cost management like expanding earned value management to include earned schedule. Sample formulas for calculating earned value metrics like cost variance, schedule variance, and estimate at completion are provided.
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within budget. Cost estimating develops cost approximations for project activities using techniques like analogous, bottom-up, and parametric estimating. Cost budgeting aggregates activity cost estimates and establishes a cost baseline. Cost control influences factors creating cost variances and controls changes to the budget.
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within budget. Cost estimating develops cost approximations for project activities using techniques like analogous, bottom-up, and parametric estimating. Cost budgeting aggregates activity cost estimates and establishes a cost baseline. Cost control influences factors creating cost variances and controls changes to the budget.
W4N1 Cost Management OverviewCost management is a critical comp.docxcelenarouzie
W4N1: Cost Management Overview
Cost management is a critical component of any project. It is very rare that there is no concern over what a project will cost!
Reliable cost estimates are required for responsible fiscal management at each stage of a project. Unreliable estimates and resulting budgets typically cause significant problems within an organization -- particularly for large enterprise projects. Cost management is closely related to time management because when projects overrun schedule there are typically cost overruns as well.
There are varying degrees of budgetary estimates at different stages of a project. At each stage, cost estimates must be accurate, transparent and reliable to the degree possible at that particular stage. Budgetary estimates (before the project is approved) will be high level, but should be based on a high level understanding of scope and approach. By the time that project budgets are established just prior to execution, much more detail is known and the estimates can be provided with more clarity. The degree of uncertainty should be defined with each estimate. Management needs the best information available on which to base decisions about the project. The degree of estimation detail and the basis of the estimates improves over time.
Cost estimates are not static -- estimating costs is not an exact science and actual costs must be regularly reviewed and tracked to budgetary estimates. The estimates do, however, set expectations and affect management decisions. A successful project manager is expected to establish a budget for a project and then manage the project to that budget. Any changes in the overall cost to complete a project must be discussed with management and key project stakeholders. If an initial budgetary estimate made during project initiation is extremely different from the budget planned for project execution (or worse from what it actually takes to complete the project in the late stages), management must rethink whether or not the project should proceed.
W4N2: Cost Estimating
There are various methods for estimating project costs. Sometimes historical data is available to support cost estimates, sometimes teams define the cost estimate in a “bottom up” manner by estimating what it will cost to perform each project work activity and then summing up the activities for the project, and for some specialty areas there may be industry or corporate formulas or guidelines that can help guide estimates. Various tools, from cost models, to project management systems, to complex excel spreadsheets typically support the development of cost estimates.
Based on the activity resource and duration estimates, the cost estimates define the cost of completing the work of the project. Cost estimates include labor, materials, services, equipment and any other direct costs for performing project activities. There are many factors that should be considered when preparing cost estimates, incl.
Software Project Cost Management and estimationssuser9d62d6
This document discusses key aspects of project cost management including estimating costs, determining budgets, and controlling costs. It provides details on processes, tools and techniques, and outputs for each aspect.
The main processes are estimate costs, determine budget, and control costs. Estimating costs involves tools like expert judgement, analogous estimating, bottom-up estimating, and reserve analysis. Determining the budget aggregates activity costs and includes contingency and management reserves. Controlling costs uses earned value management to track performance against the cost baseline and forecast estimates.
- Cost is one of 3 Triple constraints of the project. Managing costs of the project is very crucial and hardest part of the project. It spans across all phases of the project right from conception to closure of the project.
- Cost Management is not just controlling “Costs”; it involves definitive planning and preparing budgets. Collecting cost associated data. Comparing the data to prepared budgets and taking appropriate actions when needed.
- The process involved in estimating, budgeting, and controlling cost so that the project can be completed within approved budget.
- Value analysis (value engineering)
• Looking at less costly way to do the same work within the same scope
The main aim of this research study was to investigate the causes of illegal migrationn and its impacts in the
returnees who are living in Woliso town. To achieve these objectives, qualitative methods and Semi-structured in
depth interviews were held with a total of 25 women participants. Descriptive phenomenology was the approach
employed for conducting this study. The purposive sampling technique was used to select 25 returnees of illegal
emigrant f The Primary information was collected mainly from the migrants, Labour
and Social affairs office. Phenomenological method of analysis for study was used to analyze the data obtained
from the participants. The findings of the study revealed that there are a variety of contributory factors that led to
the emergence of migrant women from Ethiopia to Middle East countries. The result showed that the major factors
contributing to the migration and vulnerability of Ethiopian women to illegal emigration are lack of employment,
poverty, lack of prospects, the search for better opportunities and income to support themselves and their families
and economic insecurity as the probable cause of this migration.
Project cost management ,cost estimation cost control and evm for large epc projects and is essential for knowing the cost parameters for all construction engineers.
The document provides information on preparing cost estimations and evaluating project profitability. It discusses inputs like the work breakdown structure and resource requirements that are used to prepare cost estimations. Tools like analogous estimating, parametric modeling, and bottom-up estimating are described for developing cost estimates. Outputs include the cost estimates themselves and supporting details. Methods for evaluating project profitability discussed are payback period, average annual rate of return, net present value, and internal rate of return. Factors like cash flows, investment costs, and discount rates are considered in these calculations to determine whether a project is profitable.
Here are the answers to the pop quiz:
1. B
2. B
3. D
4. 1. Planning cost management
2. Estimating cost
3. Determining the budget
4. Controlling costs
5. A
6. 1. Estimates are done too quickly
2. People lack estimating experience
7. C
8. D
9. A
10. A
Estimating is a complex process involving collection of available and pertinent information relating to the scope of a project, expected resource consumption, and future changes in resource costs. This process is required in all stages of the project life-cycle.
Programming Foundation Models with DSPy - Meetup SlidesZilliz
Prompting language models is hard, while programming language models is easy. In this talk, I will discuss the state-of-the-art framework DSPy for programming foundation models with its powerful optimizers and runtime constraint system.
HCL Notes and Domino License Cost Reduction in the World of DLAUpanagenda
Webinar Recording: https://www.panagenda.com/webinars/hcl-notes-and-domino-license-cost-reduction-in-the-world-of-dlau/
The introduction of DLAU and the CCB & CCX licensing model caused quite a stir in the HCL community. As a Notes and Domino customer, you may have faced challenges with unexpected user counts and license costs. You probably have questions on how this new licensing approach works and how to benefit from it. Most importantly, you likely have budget constraints and want to save money where possible. Don’t worry, we can help with all of this!
We’ll show you how to fix common misconfigurations that cause higher-than-expected user counts, and how to identify accounts which you can deactivate to save money. There are also frequent patterns that can cause unnecessary cost, like using a person document instead of a mail-in for shared mailboxes. We’ll provide examples and solutions for those as well. And naturally we’ll explain the new licensing model.
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1. 1. Estimating Project Costs
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Introduction
Project Cost Management is a set of activities for estimating costs of project, determining and approving a necessary budget, allocating financial
resources and controlling spending for the purpose of ensuring that the project is performed under approved budget. Project cost management
allows addressing the identification, development, allocation and management of the project budget. The given project cost management
definition can be applied to most kinds of project.
In this article you will learn the following:
Cost Estimating Principles
Types of Project Cost
Cost Estimates
Cost Estimation Process
Example of Cost Estimation Process
Project Cost Estimating Principles
The process of estimating costs is a methodological activity that complies with a set of cost estimating principles. Such principles act as a
foundation for identifying and estimating project costs. Here is a list of the key project cost estimating principles:
The Principle of Integrity. With reference to this cost estimation principle, any estimate should be produced with a high standard of
ethical integrity and by following an open or transparent process. Any uncertainties and vagueness associated with estimates should be
explained in an easy-to-understand manner and in laymen’s terms. The principle allows avoiding false precision and rash decisions on
cost estimates by integrating all people involved in the cost estimation process into a team which works as a single mechanism
operating the same information on project cost estimating.
Cost Estimates Information. The development of cost estimates should be based only on the best information available. When cost
estimators develop any estimate, engineering judgment and technical advice should be applied any assumption made at that estimate.
By following this cost estimation principle, all information used for developing estimates can be thoroughly considered, filtered and
refined in order to get the most accurate and relevant pieces of that information.
Risk and Uncertainty. Any project cost should be identified and used within an estimate considering uncertainties and risks. A
methodological and exhaustive method of assessing and reassessing project risk and uncertainty should be applied to estimating
project costs. Cost estimation software can be used to associate each project cost with potential risks or uncertainties surrounding the
project. Cost estimation software will also allow considering project risks by producing accurate contingencies in estimates that may
be used later for developing a risk management plan.
Expert Estimating Team. The principle assumes that only a skilled, interdisciplinary team of experts should produce estimates and
make cost calculations. Project estimating sheets should be developed utilizing a clearly defined work statement. The team of experts
should use methodological tools and cost estimating approaches to develop estimates. The estimating team can be composed of the
project team members, experienced personnel of the performing organization, as well as experts from outside qualified agencies.
Technical, managerial, and communication cost estimating skills are required for the members of the estimating team. They should
also be able to identify and evaluate critical issues and risks.
Validation of Estimates: An expert, unbiased estimating team should validate project cost estimates. The project manger should
develop initial estimates of project costs and submit these estimated to the estimating team for validation. A second independent
judgment will allow making estimates more correct and capturing a different perspective on the project cost estimating process. This
cost estimation principle become more important to complex projects which require producing large estimates.
Release and Use of Estimates. The principle assumes that while project cost estimates might have been developed for a specific goal,
they can be used improperly by those people who do not understand the applicable context. Until the estimating team has been
thoroughly reviewed cost estimates and validated their content, these cost estimates should not be released to the project team and
stakeholders in order to avoid misuse and misunderstanding of cost estimations. Then cost estimates would be consistent with the
project scope and accurate indicators of project costs.
Types of Project Costs
All the costs of a project can be broken down into three categories that include the following project cost types:
Variable Cost and Fixed Cost. A Fixed Cost refers to a cost which is not to be changed throughout the project progress. Fixed cost
does not change an increase or reduction of the project work amount. Examples of fixed project cost are setup cost, rental cost, cost for
hiring of equipment, etc. A Variable Cost refers to any costs that can be changed with an amount of project work. An increase or
2. reduction of project scope causes the respective change in variable costs. Examples of variable project cost are cost of production
materials, remuneration of project team, cost of power and water.
Direct Cost and Indirect Cost. A Direct Cost is a cost that is directly associated with particular tasks or/and activities of the project.
Examples of direct project expense are team wages and expense on materials used during the project. An Indirect Cost refers to
expenses on overhead items (overheads). Indirect cost does not refer to the project cost value. Examples of indirect project cost are:
corporate tax, fringe benefit tax.
Opportunity Cost. An Opportunity Cost is a cost associated with an opportunity of a choice for the project. When you select between
two different projects, or activities within one project, you can consider opportunity expense of each project (activity) and then make
your choice.
Project Cost Estimates
The major tools of project cost estimation are estimates which can be developed in a spreadsheet view. A cost estimate for a project is a
calculation of all (monetary and time) resources necessary to perform and deliver the project. It is used to calculate and compare resources.
Project cost estimates generally show an amount of some currency units (e.g. USD, GBP, UAH) as well as an amount of working hours or total
working time required to complete the project.
Sometime, project cost estimates include both currency units and working hours and show a comparison between both measures. Cost estimation
software can be used to create cost estimates and define units per line and per column in the estimates.
Cost estimate spreadsheets are not static and to be continuously developed and modified throughout the course of the project in order to reflect
additional details as project processes are being progressed. The accuracy plays the pivotal role in developing and managing cost estimates and
spreadsheets. While project processes develop and change, project cost estimates should also be respectively changed and supplemented with new
details. The matter of cost estimate accuracy is defined by cost estimation standards and requirements so that each organization can define the
expected degree of accuracy. Cost estimation software allows creating cost estimate templates and sample cost spreadsheets that include specific
accuracy degrees and possible deviations.
In project cost estimating spreadsheets, all information on the resources that can be changed throughout the project course is included and used. A
typical project cost estimating spreadsheet includes information from such sources as labor, infrastructure, materials, financial resources,
facilities, services, work time, etc. Cost estimating spreadsheets may also include special categories, such as contingency costs and inflation
allowance.
Project Cost Estimation Process
Estimating costs (cost estimation) is a process of determining an amount of monetary resources required to accomplish project activities. The
process of project cost estimating involves the approximation and development of costing alternatives to plan, perform and deliver the project.
The process focuses on finding and allocating optimal costs for the project.
The process is vital to determining whether the project will be successful, all its goals and objectives will be achieved and its deliverables will be
produced. Considering this statement, the following definition of a successful project can be made: the project becomes successful if it meets the
four success criteria:
the scope is developed and produced on schedule;
the scope is delivered within budget;
the quality expectation are met; and
the expected benefits are receive by stakeholders
The cost estimation process influences all the items of the project success criteria so the project manager should understand all the importance of
the process.
The process of estimating project costs involves applying several specific techniques, in combination or separately. Here a list of the key project
cost estimation techniques and tools:
Analogous Cost Estimating. This technique is also known as “Historical Data Analysis” and it assumes applying the actual cost of
previous or analogues projects as the foundation for estimating the cost of the current project. This cost estimation technique is usually
applied to separate segments of the project and in combination with other techniques and tools.
Parametric Cost Estimating. It is an effective method that allows using historical and statistical data on
the project to make an estimate for activity parameters (like scope, budget and duration). It may
3. provide a higher degree of estimation accuracy depending on the data included in the parametric
model. The technique can be used separately as well as in combination with other cost estimation
techniques and tools.
Bottom-up Cost Estimating. This method supports the idea that the individual activity cost (or work package cost) consciousness is
of prime importance. It assumes estimating cost of a smaller work unit. By using the method, individual scheduled activities, or a
work package, can be estimated to the smallest detail. Then all estimated costs are grouped and sorted by cost categories, and then
gathered into the summary table that is used for tracking, control and reporting purposes.
Top-down Cost Estimating. This technique is opposite to Bottom-up Cost Estimating method. The technique assumes that the total
project budget is determined at the project’s beginning and the estimating team needs to identify the costs of each project work item
(task or job). The method of Top-down Cost Estimating allows determining the number of required activities and tasks referring to the
WBS which reflects the necessary work items and work packages. By using the WBS, the team can determine the quantity of the work
items that can be delivered within the fix project budget. The team may decide to add or remove certain items in the WBS in order to
fit the fix project budget.
Reserve Analysis. Since Quality Assurance and Quality Control are integrated parts of the cost estimate process, the technique is used
to deal with uncertainties that may overstate or understate project costs by making cost estimate reviews. It assumes that costs may
include reserves (or contingency allowances) which can be used for mitigating risks and responding to threats. Reserves should be
estimated and then added to cost estimated in order to allow applying the critical chain method and risk mitigation strategies.
Cost of Quality. The method of estimating quality cost allows develop the schedule activity cost estimate and estimate how many
resources it is required to achieve the expected quality.
By using project estimation software (like MS Project, VIP Task Manager Pro), all the listed tools and techniques can be managed and applied.
Advanced examples of project estimation software allow managing project tasks, making billing and payment activities, documenting
transactions and resource transfers, communicating with project participants, customers and vendors, planning meetings and events, and sharing
cost estimating information.
Example of the Cost Estimating Process
Most projects face the same or similar problems related to estimating costs and managing financial resources. New technologies, teams
unfamiliar with these technologies, or unclear project work statements are most frequent problems. Here is probably one of the best ways to
estimate and calculate costs for your project. The given example of cost estimate process is most applicable to IT projects and software
development projects.
Step #1. Breaking project work down into smaller tasks. You need to decompose your project work into as many work items (tasks
and jobs) as possible. A convenient way to break down your tasks is to consider typical activities appropriate to your project, and then
see whether they can be divided into tasks and todo lists. For example, a software development project involves such typical activities
as such Analysis, Designing, Developing, Demo, Testing, Bug Fixing, Documenting, Deploying, and Supporting. Now having these
activities, you can divide each of the activities into a number of smaller tasks and actions. The Analysis activity can be divided into
several tasks, like “Collecting Necessary Info”, “Examining Collected Info”, “Creating a software development plan”, etc.
Step #2. Evaluating tasks. Once you have specified tasks and jobs for each typical process/activity in your project, now it is time to
evaluate the tasks considering two scales: Complexity (high, medium, low) and Work Size (large, medium, small). Note that less
complex tasks may still require a large amount of work, so for example Low Complexity does not necessary involves Small Work
Size. For example, you run an IT project, and you need to load a database that contains information taken from paper documents.
Loading may take several weeks which means that a very complex task (“Loading Database”) may not involve much actual work of
people but can still take much time, as in configuring the database for optimum performance. Evaluating tasks can be a complicated
matter because complex tasks are usually hard to allocate between team members, while large-sized yet less complex tasks can usually
be shared between team members.
Step #3. Regarding to the previous step, all project tasks can be effectively broken down into nine combinations of complexity and
size (3×3 – high, medium, low versus large, medium, low). Therefore, each task can fall into one of the combinations. For each
combination, you need to estimate an expected amount of resources (time, people, money) required. For example, you have evaluated
tasks and now you can state that high-complexity and small-sized tasks take three weeks at most, medium-complexity and small-size
tasks take one week, and so on. All possible combinations of tasks should be reviewed and evaluated, so that your will define better
values for your project. By combing all defined values for each task, you can obtain a cost estimate of resources (time, people, money)
required
4. Create Group Synergy With Facilitation
Human synergy occurs when the combined effort of two or more people is greater than the sum of the individual
efforts. An effective facilitator works to achieve common goals by encouraging synergy. You can create group
synergy by developing an office culture that values and respects the talent of its employees.
Difficulty:
Instructions
1 Value every view. Rather than operating with a "majority rules" approach, seek to achieve consensus. This
may take more time, but group members will see that they all play a role in coming to the best decision.
o 2
Affirm that each person has a unique set of strengths that the group needs. Encourage an employee to
develop in skill areas where she has a natural inclination. Workers enjoy their work more and the group
stands to gain from their fulfillment.
o 3
Insist that group members look to each other for direction and validation. This fosters cooperative
conversation. It drives home the point that the facilitator guides the group rather than taking a solely top-
down approach.
o 4
Praise the group for whatever qualities you want to see more of, whether that is speed, quality, efficiency,
creativity, or other important criteria for the project at hand. In this way, the facilitator provides direction and
validation.
o 5
Maintain balance between individual and group needs. Valuing the individual while keeping the common
goals in the forefront requires skill and insight, but it is essential to maintain a well-functioning group.
5. o 6
Focus on external threats and obstacles. Such a focus helps diffuse competition and build cooperation.
Rallying the group to overcome a specific obstacle is a unifying activity.
Synergy Effect in Management Information
System
Dwight Chestnut has been a freelance business researcher and article writer for over 18 years.
He has published several business articles online and written several business ebooks.
Chestnut holds a bachelor's degree in electrical engineering from the University of Mississippi
(1980) and a Master of Business Administration from University of Phoenix (2004). By Dwight Chestnut,
eHow Contributor
updated November 25, 2010
Print this article
Information technology enhances synergistic relationships
among employees.
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One of the primary sources of innovation within companies is open and effective collaboration among employees,
corporate departments and corporate partners. New synergistic relationships develop, which lead to new innovations.
Information technology systems, such as a Management Information System (MIS), help facilitate open and effective
collaboration.
1. Definitions
o Management information systems (MIS) are systems that collect raw data from a variety of information
systems throughout a business enterprise and deliver it in useful form to help managers make decisions.
6. Synergy describes the resulting effect of what happens when individuals are motivated or empowered to
work together in non-traditional ways to stimulate new ideas and increase productivity.
Effects
o The application of information technology systems breaks down traditional communications barriers among
corporate departments and companies, allowing individuals to interact and collaborate in ways not possible
before--thus creating new synergies. This applies to MIS systems as well as other IT systems. However, the
benefits of this synergy heavily depend on the willingness of individuals to step outside of their traditional
roles and work together.
Significance
o In a global economy, companies that continuously innovate and create new products and services win. The
quality and speed of innovation is directly linked to the synergy created from open and effective collaboration
among all corporate stakeholders.
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Read more: Synergy Effect in Management Information System | eHow.com
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system.html#ixzz1UhEmo7LT
Definitions and usages
In the context of organizational behavior, following the view that a cohesive group is more than
the sum of its parts, synergy is the ability of a group to outperform even its best individual
member. These conclusions are derived from the studies conducted by Jay Hall on a number of
laboratory-based group ranking and prediction tasks. He found that effective groups actively
looked for the points in which they disagreed and in consequence encouraged conflicts amongst
the participants in the early stages of the discussion. In contrast, the ineffective groups felt a need
to establish a common view quickly, used simple decision making methods such as averaging,
and focused on completing the task rather than on finding solutions they could agree on.[2]
In a technical context, its meaning is a construct or collection of different elements working
together to produce results not obtainable by any of the elements alone. The elements, or parts,
can include people, hardware, software, facilities, policies, documents: all things required to
produce system-level results. The value added by the system as a whole, beyond that contributed
independently by the parts, is primarily created by the relationship among the parts; that is, how
they are interconnected. In essence, a system constitutes a set of interrelated components
working together with a common objective: fulfilling some designated need.[3]
If used in a business application it means that teamwork will produce an overall better result than
if each person was working toward the same goal individually. However, the concept of group
cohesion needs to be considered. Group cohesion is that property which is inferred from the
7. number and strength of mutual positive attitudes among members of the group. As the group
becomes more cohesive, its functioning is affected in a number of ways. First, the interactions
and communication between members increase. Common goals, interests and small size all
contribute to this. In addition, group member satisfaction increases as the group provides
friendship and support against outside threats.[4]
There are negative aspects of group cohesion which have an effect on group decision-making
and hence on group effectiveness. There are two issues arising. The risky shift phenomenon is
the tendency of a group to make decisions that are riskier than those that the group would have
recommended individually. Group Polarisation is when individuals in a group begin by taking a
moderate stance on an issue regarding a common value and, after having discussed it, end up
taking a more extreme stance.[5]
A second, potential negative consequence of group cohesion is group think. Group think is a
mode of thinking that people engage in when they are deeply involved in cohesive group, when
the members' striving for unanimity overrides their motivation to appraise realistically the
alternative courses of action. Studying the events of several American policy "disasters" such as
the failure to anticipate the Japanese attack on Pearl Harbor (1941) and the Bay of Pigs Invasion
fiasco (1961), Irving Janis argued that they were due to the cohesive nature of the committees
that made the relevant decisions.[6]
That decisions made by committees lead to failure in a simple system is noted by Dr. Chris
Elliot. His case study looked at IEEE-488, an international standard set by the leading US
standards body; it led to a failure of small automation systems using the IEEE-488 standard
(which codified a proprietary communications standard HP-IB). But the external devices used
for communication were made by two different companies and the incompatibility between the
external devices led to a financial loss for the company. He argues that systems will be only safe
if they are designed, not if they emerge by chance.[7]
The idea of a systemic approach is endorsed by the United Kingdom Health and Safety
Executive: The successful performance of the health and safety management depends upon the
analyzing the causes of incidents and accidents and learning correct lessons from them. The idea
is that all events (not just those causing injuries) represent failures in control, and present an
opportunity for learning and improvement.[8] This book describes the principles and management
practices, which provide the basis of effective health and safety management. It sets out the
issues which need to be addressed, and can be used for developing improvement programs, self-
audit or self-assessment. Its message is that organizations need to manage health and safety with
the same degree of expertise and to the same standards as other core business activities, if they
are to effectively control risks and prevent harm to people.
The term synergy was refined by R. Buckminster Fuller who analyzed some of its implications
more fully[9] and coined the term Synergetics.[10]
A dynamic state in which combined action is favored over the difference of individual component
actions.
8. Behavior of whole systems unpredicted by the behavior of their parts taken separately, known as
emergent behavior.
The cooperative action of two or more stimuli (or drugs), resulting in a different or greater response
than that of the individual stimuli.
[edit] Drug synergy
Drug synergy occurs when drugs can interact in ways that enhance or magnify one or more
effects, or side effects, of those drugs. This is sometimes exploited in combination preparations,
such as codeine mixed with acetaminophen or ibuprofen to enhance the action of codeine as a
pain reliever. This is often seen with recreational drugs, where 5-HTP, a serotonin precursor
often used as an antidepressant, is often used prior to, during, and shortly after recreational use of
MDMA as it allegedly increases the "high" and decreases the "comedown" stages of MDMA use
(although most anecdotal evidence has pointed to 5-HTP moderately muting the effect of
MDMA[citation needed]). Other examples include the use of Cannabis with LSD, where the active
chemicals in cannabis have been reported to enhance the hallucinatory experience of LSD.[citation
needed]
.
Negative effects of synergy are a form of contraindication. For example, a combination of
depressant drugs that affect the central nervous system (CNS), such as alcohol and Valium, can
cause a greater reaction than simply the sum of the individual effects of each drug if they were
used separately. In this particular case, the most serious consequence of drug synergy is
exaggerated respiratory depression, which can be fatal if left untreated.
Drug synergy can occur both in biological activity and because of pharmacokinetics. Shared
metabolic enzymes can cause drugs to remain in the bloodstream much longer in higher
concentrations than if individually taken.
[edit] Biological sciences
Synergy has been advanced by Robert Corning as a hypothesis on how complex systems
operate.[11] Environmental systems may react in a non-linear way to perturbations, such as
climate change, so that the outcome may be greater than the sum of the individual component
alterations. Synergistic responses are a complicating factor in environmental modeling.[12]
[edit] Pest synergy
Pest synergy would occur in a biological host organism population where, for example, the
introduction of parasite A may cause 10% fatalities, and parasite B may also cause 10% loss.
When both parasites are present, the losses would normally be expected to total less than 20%,
yet in some cases, losses are significantly greater. In such cases it is said that the parasites in
combination have a synergistic effect.
[edit] Toxicological synergy
9. Toxicological synergy is of concern to the public and regulatory agencies because chemicals
individually considered safe might pose unacceptable health or ecological risk in combination.
Articles in scientific and lay journals include many definitions of chemical or toxicological
synergy, often vague or in conflict with each other. Because toxic interactions are defined
relative to the expectation under "no interaction", a determination of synergy (or antagonism)
depends on what is meant by "no interaction". The United States Environmental Protection
Agency has one of the more detailed and precise definitions of toxic interaction, designed to
facilitate risk assessment. In their guidance documents, the no-interaction default assumption is
dose addition, so synergy means a mixture response that exceeds that predicted from dose
addition. The EPA emphasizes that synergy does not always make a mixture dangerous, nor does
antagonism always make the mixture safe; each depends on the predicted risk under dose
addition.
For example, a consequence of pesticide use is the risk of health effects. During the registration
of pesticides in the United States exhaustive tests are performed to discern health effects on
humans at various exposure levels. A regulatory upper limit of presence in foods is then placed
on this pesticide. As long as residues in the food stay below this regulatory level, health effects
are deemed highly unlikely and the food is considered safe to consume.
However, in normal agricultural practice it is rare to use only a single pesticide. During the
production of a crop several different materials may be used. Each of them has had determined a
regulatory level at which they would be considered individually safe. In many cases, a
commercial pesticide is itself a combination of several chemical agents, and thus the safe levels
actually represent levels of the mixture. In contrast, a combination created by the end user, such
as a farmer, has rarely been tested in that combination. The potential for synergy is then
unknown or estimated from data on similar combinations. This lack of information also applies
to many of the chemical combinations to which humans are exposed, including residues in food,
indoor air contaminants, and occupational exposures to chemicals. Some groups think that the
rising rates of cancer, asthma and other health problems may be caused by these combination
exposures; others have alternative explanations. This question will likely be answered only after
years of exposure by the population in general and research on chemical toxicity, usually
performed on animals. Examples of pesticide synergists include Piperonyl butoxide and MGK
264.[13]
[edit] Human synergy
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Human synergy relates to humans. For example, say person A alone is too short to reach an
apple on a tree and person B is too short as well. Once person B sits on the shoulders of person
A, they are more than tall enough to reach the apple. In this example, the product of their
synergy would be one apple. Another case would be two politicians. If each is able to gather one
10. million votes on their own, but together they were able to appeal to 2.5 million voters, their
synergy would have produced 500,000 more votes than had they each worked independently. A
song is also a good example of human synergy, taking more than one musical part and putting
them together to create a song that has a much more dramatic effect than each of the parts when
played individually.
A third form of human synergy is when one person is able to complete two separate tasks by
doing one action. For example, if a person was asked by a teacher and his boss at work to write
an essay on how he could improve his work, that would be considered synergy. Or, a more visual
example of this synergy is a drummer using four separate rhythms to create one drum beat.
Synergy usually arises when two persons with different complementary skills cooperate. In
business, cooperation of people with organizational and technical skills happens very often. In
general, the most common reason why people cooperate is it brings a synergy. On the other
hand, people tend to specialize just to be able to form groups with high synergy (see also division
of labor and teamwork).
Example: Two teams in System Admin working together to combine technical and
organizational skills in order to better the client experience, thus creating synergy.
[edit] Corporate synergy
Corporate synergy occurs when corporations interact congruently. A corporate synergy refers to
a financial benefit that a corporation expects to realize when it merges with or acquires another
corporation. This type of synergy is a nearly ubiquitous feature of a corporate acquisition and is a
negotiating point between the buyer and seller that impacts the final price both parties agree to.
There are distinct types of corporate synergies:
[edit] Revenue
A revenue synergy refers to the opportunity of a combined corporate entity to generate more
revenue than its two predecessor stand-alone companies would be able to generate. For example,
if company A sells product X through its sales force, company B sells product Y, and company
A decides to buy company B then the new company could use each sales person to sell products
X and Y thereby increasing the revenue that each sales person generates for the company.
In media revenue, synergy is the promotion and sale of a product throughout the various
subsidiaries of a media conglomerate, e.g. films, soundtracks or video games.
[edit] Management
Synergy in terms of management and in relation to team working refers to the combined effort of
individuals as participants of the team. Positive or negative synergy can exist. The condition that
exists when the organization's parts interact to produce a joint effect that is greater than the sum
of the parts acting alone.
11. [edit] Cost
A cost synergy refers to the opportunity of a combined corporate entity to reduce or eliminate
expenses associated with running a business. Cost synergies are realized by eliminating positions
that are viewed as duplicate within the merged entity. Examples include the head quarters office
of one of the predecessor companies, certain executives, the human resources department, or
other employees of the predecessor companies. This is related to the economic concept of
economies of scale.
[edit] Computers
Synergy can also be defined as the combination of human strengths and computer strengths, such
as advanced chess. Computers can process data much more quickly than humans, but lack the
ability to respond meaningfully to arbitrary stimuli.
[edit] Synergy in the media
In media economics, synergy is the promotion and sale of a product (and all its versions)
throughout the various subsidiaries of a media conglomerate,[14] e.g. films, soundtracks or video
games. Walt Disney pioneered synergistic marketing techniques in the 1930s by granting dozens
of firms the right to use his Mickey Mouse character in products and ads, and continued to
market Disney media through licensing arrangements. These products can help advertise the film
itself and thus help to increase the film's sales. For example, the Spider-Man films had toys of
webshooters and figures of the characters made, as well as posters and games.[15] The NBC
sitcom 30 Rock often shows the power of synergy.
[edit] Obligatory Synergies
When spasticity occurs, such as following a stroke, it manifests in abnormal and stereotypical
patterns across multiple joints called obligatory synergies.[16] They are described as either a
flexion synergy or an extension synergy and effect both the upper and lower extremity (see
below).[16] When these patterns occur in a patient, he or she is unable to move a limb segment in
isolation of the pattern.[16] This interferes with normal activities of daily living.[16] Some aspects
of the obligatory synergy patterns however, can be cleverly used to increase function relative to
the movement available to the individual. Careful thought should therefore be considered in
deciding which muscle groups to stretch at specific times during recovery. Obligatory synergy
patterns are observed when a patient tries to make a minimal voluntary movement, or as a result
of stimulated reflexes.[16]
The flexion synergy for the upper extremity includes scapular retraction and elevation, shoulder
abduction and external rotation, elbow flexion, forearm supination, and wrist and finger
flexion.[16]
The extension synergy for the upper extremity includes scapular protraction, shoulder adduction
and internal rotation, elbow extension, forearm pronation, and wrist and finger flexion.[16]
12. The flexion synergy for the lower extremity includes hip flexion, abduction and external
rotation, knee flexion, ankle dorsiflexion and inversion and toe dorsiflexion.[16]
The extension synergy for the lower extremity includes hip extension, adduction and internal
rotation, knee extension, ankle plantar flexion and inversion and toe plantar flexion.[16]
Note that some muscles are not usually involved in these synergy patterns and include the
lattisimus dorsi, teres major, serratus anterior, finger extensors, and ankle evertors.[16]
[edit] See also