Project Cost and Schedule Management

Flashcards covering cost management planning, cost estimation techniques, project budget components, cost control tools, and project scheduling concepts such as milestones, deliverables, and Gantt charts.

What is a Cost Management Plan?

The official document that defines how project costs will be estimated, budgeted, and controlled throughout the entire project lifecycle.

What are the four pillars of the Cost Management Plan?

Cost Estimation, Cost Baseline, Cost Control, and Reporting/Metrics (such as Earned Value Management).

How does the Bottom-Up Estimation method calculate project costs?

It breaks down each task into its smallest individual components (labor, materials, and equipment) from the ground up and multiplies unit rates by duration or quantity to arrive at a precise total.

How is the overall project budget built?

By aggregating the cost estimates of individual Work Packages (from the WBS) and adding reserves for identified risks.

What are the four main cost categories considered when determining the project budget?

Labor, Materials, Equipment, and Overheads (indirect administrative expenses).

What is the Contingency Reserve and what percentage of the budget does it typically represent?

It typically represents $5\text{–}10\%$ of the budget and is specifically set aside to cover known, anticipated risks documented during risk planning (like minor delays or expected price fluctuations).

What are the two primary components that make up the total Project Budget?

The Cost Baseline (the approved budget for planned work) plus the Management Reserve (a buffer for unforeseen events).

What is the Cost Baseline?

The approved, time-phased budget used as a benchmark to measure actual financial performance.

What is the Management Reserve, and who controls it?

A $5\text{–}10\%$ financial cushion for unforeseen risks outside the project's defined scope that is controlled by upper management.

What are Control Accounts in project budgeting?

Management checkpoints where scope, budget, and actual costs are integrated and compared against the baseline.

What is the core purpose of the Control Project Costs process?

It is the ongoing process of monitoring financial performance to detect and address budget deviations promptly.

Which specific tools and techniques are highlighted for controlling project costs?

Earned Value Management (EVM), forecasting, and the To-Complete Performance Index (TCPI).

What key outputs are produced when controlling project costs?

Updated cost forecasts and formal change requests whenever corrective action is needed.

What is a Project Schedule and what are its key components?

A detailed roadmap outlining project tasks, their sequence, start and end dates, and needed resources. Its key components include Tasks/Activities (from the WBS), Dependencies, Duration, Milestones, and Deadlines.

What is a Project Milestone and what is its duration?

A significant event or point in time marking the completion of a major phase or key achievement. Under theoretical rules, milestones have zero duration—they are simply specific dates.

What is the difference between a project deliverable and a milestone?

A deliverable is the actual tangible or intangible work output produced and delivered to a stakeholder (such as a prototype, report, or software release), whereas a milestone is the moment that deliverable is completed and approved.

What general workflow is followed to create a project schedule?

Developing the WBS to identify and sequence activities, estimating task durations, assigning resources, determining milestones, building the visual timeline (Gantt Chart), and entering the monitoring and control phase.

In a Gantt Chart, what do the horizontal axis, bars, arrows, and diamonds represent?

The horizontal axis represents the timeline; the position and length of the bars show when each task begins, how long it takes, and when it ends; arrows indicate task dependencies; and diamonds mark key milestones.