Project cost management terms based on pmbok guide, 6th edition 5 jan, 2018 stefania updated 14 jan, 2018 project cost management terms. Pmp pmbok 5th edition chapter7 project cost management. Project management fundamentals and professional pmp. This course provides the foundation and structure to learn the fundamentals of project management and prepare for the project management professional certification pmp or certified associate in project management capm and is based on the guide to the project management body of knowledge, pmbok sixth edition. Project management process columbus state university. Cost management should occur early in project planning in order to establish a framework for all cost management processes and ensure that the project does not go over budget. Project cost management a guide to the project management. Cost management knowledge area posted on april 29, 20 by jerome rowley after chapter 6, which discusses time management, the next knowledge area in chapter 7 covers the last of the three major triple constraints, that of cost, and the purpose of this knowledge area is so that the project can be.
Study flashcards on pmbok chapter 7 project cost management at. Cost estimating, cost budgeting, and cost control are three cost related processes that interact with each other and with other areas of project management. Pmbok ch 7 project cost management flashcards quizlet. Hence, good project management requires a firm grasp on the concepts and techniques in project budgeting and cost control.
Project cost management is the fourth knowledge area of project management it starts with a process of planning that produces a cost management plan. This will require corrective action from the project manager in order to bring the cost andor schedule performance indexes below the alert level. Project management is the application of processes, methods, skills, knowledge and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters. When integrated with the scopequality of the project and time management, these three functions form the core of project management.
The work breakdown structure wbs is the basis for the cost management plan because the costs are totaled or rolled up from the costs for the individual work packages in the wbs. The key benefit of this selection from a guide to the project management body of knowledge. The three processes of project cost management are preceded by a planning effort by the project management team, done as a. In this pmp study guide, we will cover the 4 processes with the procurement knowledge area. Get a guide to the project management body of knowledge pmbok guide, fifth edition now with oreilly online learning. In this course, i have carefully prepared for you 21 pmp exam questions from the project cost management knowledge area of the. Feb 19, 2018 to stay on budget, you need a cost management plan. There is a substantial body of literature about dealing with people in an operational, ongoing context. Click the pdf icon below to download the ebook from the online library.
Org 04 10 14 28 34 contents the case for project management no matter how the business landscape changes, project management helps companies deliver. Cost management, strategic cost management, project cost management. The pmbok guide, is a widely accepted critical chain approach to project management. The pmbok framework consists of five process groups, ten knowledge areas and 47 project management pm processes.
For example, the cost of a procurement item may be measured when committed, ordered, delivered, incurred, or recorded for accounting purposes. Project cost management pmbok 5th edition slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Procurement is the formal processes many organizations follow obtain goods and services. Mar 30, 2015 project cost management pmbok 5th edition slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Project cost management cost management knowledge area. Cost management is concerned with the process of planning and controlling the budget of a project or business. Management reserve cost and schedule are important project management tools amounts based on statistical analyses, past experiences typically in the 1030% range reserves should.
Project cost management pmp certification training. This section introduces the three project management references then analyzes, compares and aligns them. Poor project cost management is one of the easiest ways to make a project go awry. Jennifer bridges, pmp, shows you why you need a project cost management plan, and how to set up a process. In the planning phase, expected costs are projected and approved by higher management. Which of the following inputs best conveys this requirement to the estimate costs. Refer to the project master project plan to obtain the projects wbs and refer to the project schedule management plan for a description of how the wbs was established. Few important points you can expect five to ten questions related to earned value management. A guide to the project management body of knowledge pmbok guide 2000 edition 2000 project management institute, four campus boulevard, newtown square, pa 190733299 usa vii list of figures figure 11. Pmp study guide pmbok 6th edition pmp blog project cost management involves planning, budgeting, and managing costs. A guide to the project management body of knowledge. Pmbok chapter 7 project cost management flashcards by. Project cost and budget management 3 hamid omidvar, 9.
The pmbok controlling processes cost control have been expanded into four sections called cost tracking, cost reporting and metrics, cost control and changes, and cost closeout. A summary of pmbok practices cost management brighthub. Project procurement management is the process of selecting, monitoring and closing vendor contracts. Project cost management 1 plan cost mgmt 2 estimate cost 3 determine budget 4. Project cost management for project managers based on pmbok by dr. It can be found within, inside, or be presented as part of a. Pmbok edition 5 pmp exam prep chapter 4 project integration management project management body of knowledge. An important output of project cost management is a cost estimate there are several types of cost estimates and tools and techniques to help create them it is also important to develop a.
Apr 26, 2015 lecture explaining what is project cost management. Pmbok ch 7 project cost management study guide by cahorton07 includes 81 questions covering vocabulary, terms and more. Project cost management 1 plan cost mgmt 2 estimate cost 3 determine budget 4 control costs. Cost management plan a cost management plan is a document that describes how the organization will manage cost variances on the project based on estimation, but acted on. A guide to the project management body of knowledge pmbok. Cost estimation and control is vital to a projects success. Project cost management for project managers based on pmbok. Project management has final deliverables that are constrained to a finite timescale and budget. It is also an essential part of project management.
With the development of project management, the pmbok has been released many times from 1996 to now. Cost management should occur early in project planning in order to establish a. The project manager relies upon the data she has gathered from estimates to set up a realistic. Hence all changes and highlights are summed up in one page trends and emerging practices in project schedule management earned schedule is one derivative of. This course is suitable for anyone who needs to develop an understanding of project cost management principles. Requiring involvement by andor work from one or more departments. If you wish to master the concepts of project management, you can check out our structured pmp. Thankfully, the project management body of knowledge pmbok gives us a strong foundation in this area. Pmbok chapter 7 project cost management flashcards. Managing the project budget free ebook in pdf format. Thankfully, the project management body of knowledge. The project manager relies upon the data she has gathered from estimates to set up a realistic project budget.
Hence, good project management requires a firm grasp on the concepts and techniques in project budgeting and cost control thankfully, the project management body of knowledge. Apr 30, 20 the output of the process plan cost management, it will be no surprise, is the cost management plan itself. Cost control is the part of project management such that cost management processes involved in planning, estimating, budgeting, and controlling costs so that the budget can be completed within the. A guide to the project management body of knowledge, or in short pmbok is the project management standard for the pmp and capm exams, brought out by pmi, the project management institute. T d jainendrakumar the cost management includes the processes involved in estimating, budgeting, and controlling costs so that the project can be completed within the approved budget. Leading, communicating, negotiating, and others discussed in section 2. Book description isbn 9781626209829 57 pages this ebook describes the process of managing the project budget and its associated costs. This process is typically divided into three main phases. Pmbok contains standard terminologies, practices and guidelines to manage a project, practically in any domain or industry. Mar 16, 2015 pmp pmbok 5th edition chapter7 project cost management 1.
Cost management is one of the primary functions of project managers. Though the cost management plan is a required part of the project management plan, unlike time and scope management, it is not listed as a part of the formally. If you continue browsing the site, you agree to the use of cookies on this website. Please read chapter 7 from project management institute, a guide to the project management body of knowledge, pmbok guide fourth edition, project management institute, inc. Analysis and comparison of project management standards and guides. Project cost management should consider the information needs of the project stakeholdersdifferent stakeholders may measure project costs in different ways and at different times. Developing processes for establishing transportation project budgets 7. Iii a guide to the project management body of knowledge pmbok guide fourth edition 2008 project management institute, 14 campus blvd.
Overview of project management knowledge areas and project management processes 8 figure 12. In this pmp study guide, well cover all the processes in the cost management knowledge area in pmbok 6th edition. Cost management plan template free management ebooks. Buy a guide to the project management body of knowledge pmbok guide book online at best prices in india on. The cost management function maintains its important focus at every stage throughout the life cycle of a project. Project cost management project management knowledge. T d jainendrakumar the cost management includes the processes involved in estimating, budgeting, and controlling. The basics of project cost management project management. Study pmbok chapter 7 project cost management flashcards from matthew clarks class online, or in brainscapes iphone or android app.
An important output of project cost management is a cost estimate there are several types of cost estimates and tools and techniques to help create them it is also important to develop a cost management plan that describes how cost variances will be managed on the project 12. Project cost management the pmbok project cost management processes as previously stated, money is usually one of the key constraints of any project and this process is therefore all about defining the budget and managing the actual project costs within it. Plan cost management implies creating the cost management plan. Essentially what this does is give a framework for of the other processes in the cost management knowledge area, and the next post will discuss the detailed contents of the cost management plan. A particular project in the domain of civil construction requires that every onsite worker be insured. Pdf cost control is the part of project management such that cost management processes involved in planning, estimating, budgeting, and. Project management as a practice is rapidly growing and spreading worldwide, and is now seen globally as a recognized and strategic competency, a career path and a subject for training and education.
Then there is an iterative process that develops and updates the cost estimates and cost baseline. Project cost management is keeping your project within its defined budget. Here are some key concepts for this knowledge area. The second process involved with pmbok cost management strategies is cost budgeting. The budget should take into account all stages of the project life cycle. Project management templates templates by pmbok guide knowledge areas project cost management project cost management. Project cost management 1 plan cost mgmt 2 estimate cost 3. This article outlines the processes involved in managing project cost, processes that include estimating and forecasting project cost, budgeting project cost.
Plan cost management based on pmbok guide, 6th edition 4 jan, 2018 stefania updated 14 jan, 2018 what plan cost management is. Cost management does not happen in isolation the project manager needs input from the project team and key stakeholders. A well defined project helps in facilitating appropriate management of the costs, making the project a profitable one for the undertaker. Analysis and comparison of project management standards and. Project cost management framework project management plan 6. This article on cost estimation techniques in project management 1 will help you remember the tools and techniques in the pmbok guide for the estimate costs process and 2 can be used as a reference later when you are working on projects to estimate costs. In order to verify the print run of your book or pdf, refer to the bottom of the. Cost management in project management allows a business to predict impending expenditures to help reduce the chance.
Cost management is the main focus of managerial accounting that helps a firm forecast future expenditures in an effort to reach their budgeting goals. This copy is a pmi member benefit, not for distribution, sale or reproduction. Introduction to project management body of knowledge pmbok6. Cost management is one of the 10 project management knowledge areas and it involves necessary processes to finish the project within the approved budget. The first task is to set the budget based on cost estimates and the second is to manage the costs so that they remain within the budget that has been set. Project cost management is the fourth knowledge area of project management. Org 04 10 14 28 34 contents the case for project management no matter how the business landscape changes, project management helps companies deliver value. Project managementpmbokcost management wikibooks, open. Project cost management is the fourth of 10 project management knowledge areas within the pmbok.
This standard addresses all types of projects, from bridge building to information systems implementation. Pmp pmbok 5th edition chapter7 project cost management 1. Project cost management is a group of processes required to ensure the project is completed within the approved budget. Lecture explaining what is project cost management. You can check out the complete range of project management pdf. It starts with a process of planning that produces a cost management plan. It includes activities such as planning, estimating, budgeting, financing, funding, managing, and controlling costs so that the project can be completed within the approved budget. For this reason a major part of any project is the cost management plan. This article outlines the processes involved in managing project cost. Project cost management project cost management includes the processes involved in planning, estimating, budgeting, financing, funding, managing, and controlling costs so that the.
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