Aim: To understand the Control Costs process
The control costs process helps the project manager ensure that the work is occurring within the project budget and identifies any variances early in the process.
The table below shows the inputs, tools and techniques, and outputs for the control costs process.
Control Costs | ||
---|---|---|
Inputs | Tools & Techniques | Outputs |
Project management plan Project funding requirements Work performance information Organizational process assets | Earned value management Forecasting To-complete performance index Performance reviews Variance analysis Project management software | Work performance measurements Budget forecasts Organizational process assets updates Change requests Project management plan updates Project document updates |
Exam Alert:
Do you remember Earned Value Analysis? The calculations where we calculate SPI & CPI using the EV, PV and AC. Remember??
The whole idea behind a corrective or preventive action is to help preserve the healthy execution of your project and maximize its resource utilizations.
Let us Recap the Terms & Formulae used during Earned Value Analysis:
Terms:
• BAC – Budget At Completion – This is the amount that you planned that your project will use at completionFormulae:
• EV – Earned Value – The value (in monetary terms) your project has earned so far
• PV – Planned Value – The value that your project is supposed to have earned so far
• AC – Actual Cost – The Actual cost that you have spent so far
• ETC = Estimate To Complete – The amount of money you will need to complete the project
• EAC = Estimate At completion – The Amount of money you would have spent when the project completes
• TCPI – To Complete Performance Index – The Cost Performance Index that you must attain in order to finish the project as per the planned amounts
• SPI – Schedule Performance Index = EV / PV
• CPI – Cost Performance Index = EV / AC
• SV – Schedule Variance = EV – PV
• CV – Cost Variance = EV – AC
• ETC = EAC – AC
• EAC = BAC / CPI
• TCPI = BAC – EV / BAC – AC or
• TCPI = BAC – EV / EAC – AC
To know more about the Control Costs process Click Here
To know more about the Earned Value Measurements with examples Click Here
Preb: Chapter 27
Next: Chapter 29
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