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7 - PROJECT COST MANAGEMENT
7.2.3.2 Basis of Estimates
The amount and type of additional details supporting the cost estimate vary by application area. Regardless of
the level of detail, the supporting documentation should provide a clear and complete understanding of how the
cost estimate was derived.
Supporting detail for activity cost estimates may include:
• Documentation of the basis of the estimate (i.e., how it was developed),
• Documentation of all assumptions made,
• Documentation of any known constraints,
• Indication of the range of possible estimates (e.g., €10,000 (±10%) to indicate that the item is expected
to cost between a range of values), and
• Indication of the confidence level of the final estimate.
7.2.3.3 Project documents updates
Project documents that may be updated include, but are not limited to, the risk register.
7.3 determine Budget
Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to
establish an authorized cost baseline. The key benefit of this process is that it determines the cost baseline against
which project performance can be monitored and controlled. The inputs, tools and techniques, and outputs of this
process are depicted in Figure 7-6. Figure 7-7 depicts the data flow diagram of the process.
Inputs Tools & Techniques Outputs
.1 Cost management plan .1 Cost aggregation .1 Cost baseline
.2 Scope baseline .2 Reserve analysis .2 Project funding
.3 Activity cost estimates .3 Expert judgment requirements
.4 Basis of estimates .4 Historical relationships .3 Project documents
.5 Project schedule .5 Funding limit updates
.6 Resource calendars reconciliation
.7 Risk register
.8 Agreements
.9 Organizational process
assets
Figure 7-6. determine Budget: Inputs, tools & techniques, and outputs
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