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7 - PROJECT COST MANAGEMENT

• reporting formats. The formats and frequency for the various cost reports are defined.
• Process descriptions. Descriptions of each of the other cost management processes are documented.

• Additional details. Additional details about cost management activities include, but are not limited to:
○ Description of strategic funding choices,

○ Procedure to account for fluctuations in currency exchange rates, and
○ Procedure for project cost recording.

7.2 Estimate costs

Estimate Costs is the process of developing an approximation of the monetary resources needed to complete
project activities. The key benefit of this process is that it determines the amount of cost required to complete
project work. The inputs, tools and techniques, and outputs of this process are depicted in Figure 7-4. Figure 7-5
depicts the data flow diagram of the process.

Inputs Tools & Techniques Outputs
.1 Cost management plan .1 Expert judgment .1 Activity cost estimates
.2 Human resource .2 Analogous estimating .2 Basis of estimates
management plan .3 Parametric estimating .3 Project documents
.3 Scope baseline .4 Bottom-up estimating updates
.4 Project schedule .5 Three-point estimating
.5 Risk register .6 Reserve analysis
.6 Enterprise environmental .7 Cost of quality
factors .8 Project management
.7 Organizational process software
assets .9 Vendor bid analysis
.10 Group decision-making
techniques

Figure 7-4. Estimate costs: Inputs, tools & techniques, and outputs

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