PPM - Exam 2, part 1

Project Cost Estimating

100

The process of developing an approximation (estimate) of the monetary resources needed to complete project activities.

Cost Estimating

200

What are the 6 steps in the Cost Estimating Process?

1. Plan the cost estimate

2. Develop the database

3. Select the Cost Estimating Methods

4. Prepare the Risk Assessment

5. Prepare the Estimate

6. Document the Estimate

300

What are the 5-steps in the Planning Cost Estimate?

1. Use a Team Approach

2. Develop a WBS

3. Use the WBS to develop a cost estimating strategy

4. Document Assumptions (repeat Document!!!)

5. Use a Sufficiency Review

400

In documenting Assumptions, what are the two main categories to consider?

1. Some are related to the DIRECT LABOR costs

2. Some are Derived from CONSTRAINTS.

500

When developing the database, the basic account records, cost reports, historical databases, and other MIS are considered to be ________ in the process.

Primary

Project Cost Estimating

100

When developing the database, contracts, cost proposals, and fucntional specialists are considered to be _____ in the process.

Secondary

200

What are the three common Cost Estimating Methods?

1 Analogous Estimating

2. Parametric Estimating

3. Bottom Up (grassroots) Estimating

Note: When Cost Estimating you need to put out an "APB" to get valid cost estimates.  

300

A Cost Estimating Method technique for estimating the duration or cost of an activity or projecting using HISTORICAL DATA from a similar activity is _____.

Analogous Estimating

IE: house next door is similar except 1 car garage, we want 2 car garage.

400

A Cost Estimating Method technique in which a ALGORITHM is used to calculate costs or duration base on historical data and project parameters is _____.

Parametric Estimating

ie - We want 2000sf home, Builder first 1800sf at $90sf, remainder at $60sf

500

A Cost Estimating Method technique in which estimating project duration or cost by AGGREGATING the estimates of the lower level components of the Work Breakdown Structure (WBS) is ______.

Bottom Up (Grassroots) Estimating

ie - Need $x for foundation, $x for structure, $x for appliances

Project Cost Estimating

100

In the parametric models, the fundamental principle formula is _________?

$ = f(K * MT/R)

K = Complexity, Quality, Specifity

M = Mass, Size, Quantity

T = Time Span, schedule contraints

R = Resource Effectiveness, Relative Experience, Simplicity

200

The six Elements of Estimates include ______.

1. Direct Labor Expense

2. Non-Direct Labor Expense

3. Overhead Expense

4. General and Administrative (G&A) Expense

5. Profit

6. Total Billing (Sum of Above)

Note: These are the same values captured in a WBS form.

300

The charge of labor for the project. Generally, the product of labor hours and associated labor rates is known as _____.

Direct Labor Expense

400

The non-labor charges of subcontractors, consultants, travel, telephone, computer time, material costs are all examples for ________.

Non-Direct Labor Expense.

500

_______ can be traced to the support of a particular project or work package. Usually, allocated on a rational basis (direct labor). Examples include facilities, building rents, utilities, or insurance.

Direct Overhead

Project Cost Estimating

100

_____ are non-direct expenses that CAN NOT be allocated ona rational basis. Among them include taxes, financing, penalty and warranty costs, executive salaries

General and Administrative Expenses

200

Expenses plus Profit equal ______.

Total Billing

300

To ANTICIPATE the realities and ESTABLISH target costs of operating, maintaining, and disposing of the end system and DESIGN the of the system are purposes of ________.

Life Cycle Cost Analysis

400

_______ is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.

Determine Budget

500

The _______ is a time-phased budget that will be used to measure and monitor cost performance.

cost baseline

Procurement Contract Pricing

100

What are the four elements of the Procurement Process?

1. Plan Procurement Management

2. Conduct Procurements

3. Control Procurements

4. Close Procurements

200

______ is the process of documenting project procurement decisions, specifying the approach, and identifying potential sellers.

Plan Procurement Management

300

_____ is the process of obtaining seller responses, selecting a seller, and awarding a contract.

Conduct Procurements

400

_____ is the process of managing procurement relationships, monitoring contract performance, and making changes and corrections as appropriate.

Control Procurements

500

_____ is the process of completing each project procurement.

Close Procurements