The process of Cost Management establishes the policies, procedures, and documentation for planning, managing, expending and controlling project costs. Following are the inputs, tools and techniques, and outputs of the process of Cost Management:
Project Management Plan- Schedule baseline and scope baseline is to be considered from there, which is important from the Cost Management Plan perspective.
Project Charter – It consists of constraints related to cost that are considered from the inputs.
Enterprise Environmental Factors
Organizational Process Assets
Tools & Techniques
Cost Management Plan – The components of Cost Management Plan are somewhat similar to those of Schedule Management Plan. Project cost is primarily concerned with the cost of resources needed to complete the project activities. Project Cost Management should also consider the effect of project decisions on subsequent recurring cost of using, maintaining or supporting resources.
Components of Cost Management Plan
The Cost Management Plan basically describes how the project costs will be. They can fall into these categories:
The Cost Management processes and their associated tools and techniques along with the following components are documented in CMP:
- Units of measure: Needed to measure project in terms of time, cost, labour, etc.
- Level of precision: The degree, to which activity costs, will be rounded up or down.
- Level of accuracy: The acceptable range example, (+5% to -5%) used in determining realistic activity cost estimates.
- Amount for contingencies: Amount kept for any emergency situations.
- Control thresholds
- Rules of performance measurements
- Reporting formats
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