Project Cost Management

Cost Estimation

•  Cost for each element of work break down structure. 
• Team 
• Material 
•  Suppliers 
•  Life Cycle Costing 
• Examining trade off 
• Trade Off – Spending more now to spend less later 
• Cost Elements 
• Direct Cost 
• Salary 
• Cost paid for buying Material 
• Indirect Cost 
• Fringe Benefits 
• Telephone Bills 
• Insurance 
• Storage Cost. 
• Fixed Cost 
• Cost for buying H/W. 
• Variable Cost 
• Electricity 
• Internet 
• Cost Variability 
• Change Over Time 
• Change Over Volume 
• Estimating Techniques 
• Analogous 
• Unit Cost Based on Effort 
• Parametric 
• Vander Bids/Fixed Price 

Cost Budgeting 

• Aggregate Costs 
• Cash Flow 
• Cost Baseline 
• Can be changed only for approved changes. 
• d. Contingency 
• Unknowns 
• Reserved Amount/Fund 

Project Budget Accounting 

• Present value(PV) 
• Applying expectations of future interest rates to determine what is the present value of money that will be reserved to be used some future point in time. 
• Net Present Value(NPV) 
• Present Value of money – Present Value of Cost 
• Rate of Return(ROR) 
• Payback Period 
• Time period in which project will return its cost. 

Cost Control