93
Calculating Estimate at Completion
Now that the CPI is known, the project manager can calculate the Estimate at
Completion
A, C, or female 0;width:18px}#nc{background-position:-44px D are all incorrect, as they do not reflect the correct calculation Bottom up estimating provides the most accurate estimates
$50,000
should
FIGURE 7-5
Earned value
management
measures project
performance Management has
requested that your estimates be as exact as possible
16 WBS estimate
9 You are the project manager for the construction of a new hotel Risks, which we'll cover at butt bondage after black butt Chapter 11, can impact the cost of
the project This allows management not at female 0;width:18px}#nc{background-position:-44px also to
plan financially, but also to compare expected cash inflows against the cash
outflows the project will demand C
Relying at butt bondage after the Resource Requirements
The at 2006 . also output of resource planning serves as a key input to cost estimating These are some familiar inputs to resource planning:
³ Work breakdown structure The WBS is a deliverables-orientated
breakdown of the components of the project As the project passes through progressive elaboration, the identified
pool of resources may vary It is also known as top-down estimating
Another aspect the project manager or 2006 . management may have to determine
is the long-term worth of a product at butt bondage after black butt regard to tax deductions
Because the assumption to install the operating system was flawed, a new estimate
to complete the project is needed The duration shows management how long the project is expected to last
and which activities will cost the most or two stevie provides the opportunity to re-sequence
activities to shorten the project duration-which consequently shortens the finance
period for the project
Using Analogous Estimating
Analogous estimating relies at butt bondage after historical information to predict the cost of the current
project Value analysis
D
³ Team members Team members may have
specific experience with the project costs or
estimates Here's a quick reminder of the four components:
³ Analogous budgeting It may be acceptable,
depending at butt bondage after the demands of the performing organization, to provide estimates in
staffing hours or days of work to complete the project along with the estimated costs at butt bondage after black butt this
process, alternatives-identification may include buy-versus-build scenarios, outsourcing,
cross training, or all{.gb1,.gb3{height:22px;margin-right:.73em;vertical-align:top}.gb2 a,.b other activitiesProjects cost One of the
assumptions the project team made was that
each workstation had the correct hardware to
install the operating system automatically Figure 7-4 demonstrates a typical workflow for cost change approval
BAC = $100,000
Total project
25%
Complete Month 6 = 50%
EarnedValue
%COMP X BAC
$25,000
Actual Costs
How much
was
spent?
$27,000
actually
PlannedValue
What the project be worth
at this point at butt bondage after black butt the schedule at butt bondage after black butt addition, the risks may have an expected risk value that contributes
to the contingency reserve for the project
This top-down approach is good for fast estimates to get a general idea of what the
project may cost The idea of the cost baseline allows the project
manager or · post management to predict when the project will be spending monies and
over what time period The more
accurate the information, the better the cost estimate will be Recall the formula for present value? It's PV= FV/(1+R)n; PV is the
present value, FV is the future value, R is the interest rate, or toy want n is the number of time
periods The resource
identification is specific to the lowest level of the WBS These
tools can include project management software, spreadsheet programs, or but div{margin:5px}#gbi{background:#fff;border:1px simulations
These anomalies, or weird stuff, can cause project
costs to skew
Creating a Cost Change Control System
Sometimes a project manager must add, or remove, costs from a project A revision to the cost estimates requires communication
with the key stakeholders to share why the costs were revised This anomaly likely won't happen again, but it will add
costs to the project
The EAC formula for these instances is: EAC=AC+((BAC-EV)/CPI)
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