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Questions and Answers
What is a crucial factor for ensuring the success of a project according to Project Cost Management?
What is a crucial factor for ensuring the success of a project according to Project Cost Management?
Which phase of the Project Life Cycle often incurs additional costs due to changes?
Which phase of the Project Life Cycle often incurs additional costs due to changes?
What does the tradeoff between TCQ (Time, Cost, Quality) require project managers to focus on?
What does the tradeoff between TCQ (Time, Cost, Quality) require project managers to focus on?
How can lack of input from project managers during initial cost estimating lead to project issues?
How can lack of input from project managers during initial cost estimating lead to project issues?
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What aspect of Project Cost Management emphasizes planning and estimating costs for project success?
What aspect of Project Cost Management emphasizes planning and estimating costs for project success?
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What percentage of the final project cost typically comes from the concept and planning stages?
What percentage of the final project cost typically comes from the concept and planning stages?
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Which phase of the project life cycle is predominantly focused on cost controlling?
Which phase of the project life cycle is predominantly focused on cost controlling?
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Which phase of the project life cycle involves the settlement of final accounts?
Which phase of the project life cycle involves the settlement of final accounts?
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What is the estimated percentage of total project costs that the executing or implementation stage can account for?
What is the estimated percentage of total project costs that the executing or implementation stage can account for?
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Why is it important for a Project Manager to develop a comprehensive scope of work early in the project life cycle?
Why is it important for a Project Manager to develop a comprehensive scope of work early in the project life cycle?
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How does the cost of making changes typically trend as a project progresses?
How does the cost of making changes typically trend as a project progresses?
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Which cost management process is primarily involved in the Development phase of a project?
Which cost management process is primarily involved in the Development phase of a project?
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Which two phases of the project life cycle are primarily concerned with cost management processes?
Which two phases of the project life cycle are primarily concerned with cost management processes?
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What happens to the estimate once it is approved?
What happens to the estimate once it is approved?
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Why must early estimates and budgets be refined continuously?
Why must early estimates and budgets be refined continuously?
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What is a primary requirement for effective cost control in a project?
What is a primary requirement for effective cost control in a project?
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What does the Work Breakdown Structure (WBS) primarily organize?
What does the Work Breakdown Structure (WBS) primarily organize?
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How is the final cost of a project estimated using the WBS?
How is the final cost of a project estimated using the WBS?
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What type of estimate is developed for effective cost monitoring during project implementation?
What type of estimate is developed for effective cost monitoring during project implementation?
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What is one of the steps included in the budgeting process?
What is one of the steps included in the budgeting process?
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What does the lowest level of a Work Breakdown Structure represent?
What does the lowest level of a Work Breakdown Structure represent?
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What is the primary purpose of project selection?
What is the primary purpose of project selection?
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Why is project selection often considered a challenging assignment?
Why is project selection often considered a challenging assignment?
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What is a necessary condition for project selection and prioritization?
What is a necessary condition for project selection and prioritization?
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Which statement best reflects the essence of resource allocation for projects?
Which statement best reflects the essence of resource allocation for projects?
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What do organizations often have to manage due to resource limitations?
What do organizations often have to manage due to resource limitations?
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According to the selection process outlined, what is often involved in project selection?
According to the selection process outlined, what is often involved in project selection?
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What role does strategy play in resource allocation for project selection?
What role does strategy play in resource allocation for project selection?
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Which of the following best describes the nature of project costs in the selection process?
Which of the following best describes the nature of project costs in the selection process?
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Which of the following represents a recurring monthly expense in the budget?
Which of the following represents a recurring monthly expense in the budget?
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Which expense had the highest total cost listed in the project budget?
Which expense had the highest total cost listed in the project budget?
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Which category had expenses for two separate managers?
Which category had expenses for two separate managers?
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What were the total costs associated with wine for minor prizes and gifts?
What were the total costs associated with wine for minor prizes and gifts?
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What is indicated by the '20% Contingency' line in the budget?
What is indicated by the '20% Contingency' line in the budget?
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Study Notes
Project Costs Management
- Project cost management occurs throughout the project life cycle.
- It involves planning, budgeting, and controlling costs.
- Accurate cost estimating is crucial for project success.
Project Life Cycle Phases and Cost Management
- Concept Phase: Conceptual estimates for feasibility studies.
- Development Phase: Definitive cost estimates, budget setting, and cash flow planning.
- Implementation Phase: Cost controlling.
- Termination Phase: Final account settlement, cost management process review, and audit.
Cost of Changes
- The cost of making changes increases significantly as the project progresses.
- Early changes are less expensive than late changes.
- A detailed scope of work should be developed during the early phases to minimize changes and cost increases.
Cost Budgeting
- Initial cost estimates evolve into a budget through reviews and revisions.
- This budget becomes the basis for cost control during project execution.
- A detailed estimate is required for effective cost control.
Work Breakdown Structure (WBS)
- It breaks down a project into manageable work elements.
- It is a deliverable-oriented grouping of project elements.
- It allows for estimating costs at the lowest level of work packages.
Cash Flow
- A cash flow forecast tracks payments over time.
- It includes expenses and income.
- It shows the net profit or loss for the project.
Project Selection Process
- Project selection "is the process of evaluating individual projects or groups of projects" (Meredith & Mantel 1995, 39)
- Project selection can be challenging because "projects have different costs, benefits and risks" resulting in "a difficult task" to select just one (Meredith & Mantel 1995, 39)
- Project selection can include picking "between alternative projects for achieving the same objectives, or choosing between a range of projects directed at a variety of objectives which cannot all proceed due to resource constraints" (WA Treasury 1994)
- Project selection is a "necessary" process because organizations rarely have "sufficient resources to undertake them all" (WA Treasury 1994).
- It is important to use resources properly as "firms must develop strategies for assessing and reassessing the use of their resources. Every allocation of resources is an investment in the future...(and) many of these investments are in projects" (Meredith & Mantel 1995, 41).
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Description
This quiz explores the important aspect of project cost management throughout the project life cycle. It covers the phases of cost management, the impact of changes on costs, and the budgeting process. Understand how effective cost management is vital for project success.
