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PMP - Cost Management
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In earned value how is a cost variance calculated?
CV = EV - AC or BCWP - ACWP
In earned value how is CPI calculated?
EV / AC or BCWP / ACWP
What is the EAC and how is it calculated?
Estimate at Completion
EAC = BAC / CPI
assumes current performance will continue
EAC = AC + (BAC-EV)
assumes remaining work will be done at original budget rate
EAC = AC + [(BAC-EV) / (CPI x SPI)]
needed if you also have to consider effect of the schedule if you have an imposed firm deadline
Name two methods of accelerated depreciation
1. Double Declining Balance
2. Sum of the years digits
What is working capital
Current assets minus current liabilities
What is the purpose of a management reserve?
to reduce the chance of a cost overrun
What is value analysis and how does the process work?
A cost reduction tool composed of four major steps
1. Analyze a proposed design
2. Determine relative cost of each function
3. Assess whether each function is really needed
4. Assess how to provide the necessary functions at the lowest cost without compromising quality or performance
IRR is ?
Internal Rate of Return - an estimate of a project's profitability expressed as a percentage - the higher the better
What is an approximate range of accuracy for a bottom up estimate?
-5 to +10%
What is cost control?
1. Influencing factors which create changes
2. Ensuring requested changes are agreed upon
3. Managing the actual changes as they occur
4. Determining that the cost baseline has changed
What is the learning curve theory?
The learning curve theory holds that costs will decrease as you get better at doing a repetitive task.
Unit costs will decrease in a regular pattern each time the number of units produced is doubled
Author
cbass
ID
52080
Card Set
PMP - Cost Management
Description
PMP Cost Management Review
Updated
2010-11-29T01:25:49Z
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