Project Cost Management: Techniques, Planning, and Performance Analysis

Project management
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Table of Contents
Written task........................................................................................................................3
1. Project cost estimation techniques:................................................................................3
2. What does a cost management plan outline?...................................................................4
Q3-Q26..........................................................................................................................5
Task 1................................................................................................................................7
Part 1............................................................................................................................. 7
Part 2............................................................................................................................. 9
Part 3........................................................................................................................... 12
References....................................................................................................................... 15
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Written task
1. Project cost estimation techniques:
In the project, there is the requirement to estimate the cost and for that several techniques are
used which are as follows:
Analogous estimation: Under this, the estimates which were made in the past for the similar
projects will be used to estimate the cost for the current project. In this, the changes which took
place will be incorporated.
Parametric estimation: In this, the cost will be estimated by the use of statistical modeling and
for that key cost drivers will be used for various parameters which are involved such as duration
and cost.
Bottom-up estimation: In the project, there are various works which are performed and for that
cost will be estimated and then they will be totaled so that overall cost of the project can be
estimated.
Three-point estimation: This is the technique which is developed by the use of program
evaluation and review technique. In this three estimations are made by which the cost estimates
will be made. They will be pessimistic, optimistic and most likely. In this formula will be used so
that weighted average cost will be determined and that is (Co + 4Cm + Cp)/6.
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2. What does a cost management plan outline?
In any project, there are various aspects which are required to be taken into consideration.in this
cost will be considered and then the estimation for the same will be developed. Due to this
reason, it is required that proper plan shall be made so that all of the considerations are
accounted. There are various elements which will be outlined in this such as all the activities
which are required to be carried in the project and also the criteria which will have to be met.
Under this, all the estimates will be provided whether they are related to cost inputs or the cost
outputs. The amount which has been spent will also be included in this. There is the budget
which is made and it is required that it shall be maintained and by the help of the cost
management plan the actions which are to be taken will be planned and the limit which is set will
be maintained. In this, the units of the measure, level of precision, limit to control cost, the
manner in which performance will be measured and other details will be provided in the plan so
that they can be complied with by all.
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