Cost unit 2013 part 2. 24 jan
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Transcript of Cost unit 2013 part 2. 24 jan
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Cost Unit BSBPMG504A Manage
project cost part 2. day 1 Diploma Project Management
Captain Cook CollegeSharon Boyle
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Presentation Discussion revision through discussion around Assessment Items
◦ Assessment items for Cost Unit including structure for CMP◦ Confirmed & agreed date for Project management meeting
Morning Tea◦ Earned Value Analysis ◦ Variations & Closeouts
Work on either cost management plan or LMS questionsLunch Discuss answers for Activities 1 & 3 – leave Written/Oral to
next week Continue working on LMS
◦ Tomorrow◦ Project Meeting
Lesson plan 24 January
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No. 1. Prepare a Cost management plan for Fred’s Shed – Mr Jones job and
include a detailed project budget.
No 2. Analyse scenario to be provided & insert into baselined budget. Note
variances
No 3. Provide progress report - this will include the Variance analysis from
Scope & Time Units.
No 4. Attend a Project Meeting where progress will be presented based on
progress reports prepared in Scope, Time & cost units. Each student is required to attend the meeting, play the role
requested and prepare a set of minutes.
Cost unit assessment items
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Prepare a Cost management plan for Fred’s Shed – Mr Jones job and include a detailed project budget.
What is the purpose of a cost management plan?
Major components? Use scaled down template provided
Assessment Item 1. – workshopped for discussion & clarification
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TABLE OF CONTENTS◦ Introduction ◦ Cost Management Approach ◦ Measuring Project Costs ◦ Reporting Format ◦ Cost Variance Response Process ◦ Cost Change Control Process ◦ Project Budget
Structure of cost management plan
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A brief scenario will be provided which impacts on time & cost.
Update your budget in Assessment Item 1. Describe the impacts on the budget. Use the template but just the appropriate
sections
Assessment Item 2. – workshopped for discussion & clarification
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Provide progress report - this will include the Variance analysis from Scope & Time Units.
Use the template provided
Assessment No 4.
Provide progress report
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Each student is required to attend the meeting, play the role requested and prepare a set of minutes.
Date 25 January Agenda will be prepared & sent out by Jamie Everyone required to prepare minutes of
meeting
Assessment Item for Cost & Time
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Project Manager - Jamie Assistant PM - Kevin Cost controller – Jerzy Scheduler - Chas Client – Mr Jones - Dennis CEO – Fred - Sylvester Note taker - Winni
Roles agreed last week
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Remember◦ LMS – don’t bother with Activity 2. ◦ Written/Oral for next week.
Cost management plan –◦ use structure provided or do up your own ◦ Must include budget for Fred’s shed◦ Consider EVA after next week’s lectures & video
LMS questions or Cost management plan preparation
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Morning Tea
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1. Determine project costs 2. Monitor and control project costs 3. Conduct financial completion activities
Three basic elements within the Cost unit
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Overview from PMBOK page 167
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1. EVM an overview2. Basic Elements3. Cost Variances4. Schedule Variances
The details of EVM
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Different ways of presenting information◦ Numbers eg
◦ Graphs
◦ Analysis & indices
Reporting & Monitoring
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S-curve – ◦ expenditure &
income ◦ throughout
lifecycle
Earned Value Theory
Established Cost methods
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Earned Value Management
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tracking tools upon which to base forecasts Integrates scope, schedule & cost Answers many questions stakeholders need Performance can be shown as
◦ Past◦ Current ◦ Predictive
Promises to reduce over-runs
Earned Value Management both Time & Cost
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financial analysis specialty from United States Government programs in the 1960s,
Now significant branch of project management.
In the late 1980s and early 1990s, EVM emerged as a project management methodology
EVM has become an essential part of every project tracking.
Context
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http://www.youtube.com/watch?v=7WsfuvHegxE
Earned Value with Dave Litten
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Planned Value ◦ (PV) = PV or Budgeted cost of work scheduled
BCWS = Hourly Rate * Total Hours Planned or Scheduled
Actual Cost ◦ (AC) = hourly rate x total hours spent
Earned Value ◦ (EV)= Baselined costs x % complete
% Completed Planned◦ % Completed planning =PV/BAC
Basic Elements
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Cost Variance (CV) indicates how much over or under budget the project is.
Why is under cost a problem? (CV) = Earned Value (EV) – Actual Cost (AC)
Also CV = BCWP – ACWP
◦ Positive Cost Variance Indicates the project is under budget
◦ Negative Cost Variance Indicates the project is over budget
Cost Variances
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Cost Variance % - how much over or under budget the project is in terms of percentage
CV% = CV/EV◦ Or
CV% = CV/Budgeted Cost of Work
Cost Variances %
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CPI = EV/AC
Shows how efficient we are Above 1 good efficiency Below 1 project not using resources
efficiently
Cost Performance Indicator CPI
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TCPI = Total Budget – EV/Total Budget – AC
Another measure of efficiency –◦ The correct people do the correct things within a
clear process◦ Above 1 utilization must be stringent◦ Below 1 lenient.
To complete Cost performance indicator (TCCPI)
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Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)
How much is yet to be completed as per schedule
+ve Schedule variances = we are ahead of time
-ve Schedule variance = we are behind schedule
Then same % as for Costs
Schedule Variance
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Budget at Completion = total budget
BAC = Baselined effort hours x hourly rate
Estimate to complete – just what it says. Estimate hours required x hourly rate
A few more
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http://www.youtube.com/watch?v=7WsfuvHegxE&feature=related
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Activity 1.
Activity 3.
LMS
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Lunch
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Conduct appropriate close out activities◦ Has everyone been paid?◦ What about the variations? ◦ Where do we stand?◦ Detailed records must be kept◦ Any lessons learnt?
3. Conduct financial completion activities