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7 - PROJECT COST MANAGEMENT

Additional information that may be found in the scope baseline with contractual and legal implications, such as
health, safety, security, performance, environmental, insurance, intellectual property rights, licenses, and permits.
All of this information should be considered when developing the cost estimates.

7.2.1.4 Project Schedule

Described in Section 6.6.3.2. The type and quantity of resources and the amount of time which those resources
are applied to complete the work of the project are major factors in determining the project cost. Schedule activity
resources and their respective durations are used as key inputs to this process. Estimate Activity Resources (Section
6.4) involves determining the availability of staff, the number of staff hours required, and quantities of material and
equipment needed to perform schedule activities. It is closely coordinated with cost estimating. Activity duration 7
estimates (Section 6.5.3.1) will affect cost estimates on any project where the project budget includes an allowance
for the cost of financing (including interest charges) and where resources are applied per unit of time for the
duration of the activity. Activity duration estimates can also affect cost estimates that have time-sensitive costs
included in them, such as union labor with regularly expiring collective bargaining agreements or materials with
seasonal cost variations.

7.2.1.5 risk register

Described in Section 11.2.3.1. The risk register should be reviewed to consider risk response costs. Risks,
which can be either threats or opportunities, typically have an impact on both activity and overall project costs. As
a general rule, when the project experiences a negative risk event, the near-term cost of the project will usually
increase, and there will sometimes be a delay in the project schedule. In a similar way, the project team should
be sensitive to potential opportunities that can benefit the business either by directly reducing activity costs or by
accelerating the schedule.

7.2.1.6 Enterprise Environmental Factors

Described in Section 2.1.5. The enterprise environmental factors that influence the Estimate Costs process
include, but are not limited to:

• Market conditions. These conditions describe what products, services, and results are available in the
market, from whom, and under what terms and conditions. Regional and/or global supply and demand
conditions greatly influence resource costs.

©2013 Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK Guide) – Fifth Edition 203
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