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| Also known as an actual cost of work performed (ACWP); represents the total costs that have actually been accrued up to a particular point in time. |
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| Estimate or plan that the project will try to achieve (cost, scope, time, etc.) |
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| Detailed estimate that usually involves team input. As the team builds the pieces of the estimate, they build the total estimate from the bottom up. |
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| The total amount of money expected to be spent on a project based on the original cost estimates plus any approved changes. |
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| An estimate used to put money in a company's (or project) budget. |
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| A numbering system in project management used to identify pieces of the work breakdown structure. |
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| Money included in an estimate that accounts for events which may be somewhat predicted (known unknown.) |
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| A point where scope, time, budgeted cost, and actual cost come together to measure performance on a project. |
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| Estimating (educated consistent process) the cost of people and other resources to complete the project. |
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| A cost estimate that provides the accurate estimation of the project cost; the finaal estimate to be used on the project before implementation begins; Tolerance range: -10 to +15% |
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| Cost that is directly applicable to the project (Ex: Test computer for software being created on the project, IC chips, or labor used on the project.) |
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| Estimate at Completion (EAC) |
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| Represents the projected total estimate, based on the current efficiency (CPI) with which you are spending money on the project; Formula: BAC/CPI |
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| Cost that is not directly accrued on the project (Ex: electricity, taxes, rent.) |
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| A theory which states that the more of something that is produced, the lower the unit cost of it becomes due to an improvement in efficiency. |
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| Application of a mathematical model used to estimate project components (time, cost, scope) by having other variables entered into the application. |
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| Process used to complete the project within the approved budget. |
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| Determination of resources (people, material, equipment) needed for a project including the determination of when (or how much of) the resources are needed. |
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| Schedule Performance Index (SPI) |
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| ratio of earned value and planned value that can be used to calculate how a project is progressing. |
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| Money that has already been spent on a project; should not be considered when selecting or evaluating a project. |
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| Easily measurable cost or benefits of a project, measured in dollars. |
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| Analogous Estimates (Technique) |
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| Process of using a previous project of similar characteristics (size, cost, scope) to estimate a new project. |
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| Budget at Completion (BAC) |
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Definition
| Total project budget, amount of money planned to be spent by the time the project is complete. |
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| A structure used to monitor project cost that usually aligns with a company's accounting system. |
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| Applying the overall cost estimates to the individual work elements to allow for a baseline cost measurement. |
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| The process of controlling changes to the budget. |
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| The document that explains how to handle cost estimations, budgeting, variances, and other cost related items on the project. |
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| Cost Performance Index (CPI) |
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Definition
A ratio that shows the current efficiency of money being spent on the project,
Formula: EV/AC
A value of one means you are getting out what you put (which is good), less than one is bad, greater than one is good. |
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Definition
The difference between what has been built (EV) and what the cost was to build it (AC).
Formula: EV-AC
A value of zero means the project is creating what it should for the cost as planned. A negative value means you are over budget, a positive value means you are under budget. |
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Term
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Definition
| Also known as budgeted cost of work performed (BCWP); represents the value of the work that has actually been accomplished or completed up to a particular point in time. |
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| Earned Value Technique (EVI) (Technique) |
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Definition
| The technique associated with measuring the amount of completion of a work breakdown structure component, control account or project. |
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| Internal Rate of Return (IRR) |
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| A project comparison value, represents the discounted rate that zeros out the net present value (NPV.) |
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| Consideration of not just project cost, but total ownership (operations and support) cost of the item created by the project. |
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| A value used in capital budgeting, in which the present value of cash inflow is subtracted from the present value of cash outflows; compares the value of a dollar today versus the value of the same dollar in the future, after taking inflation and return into account. |
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| The cost associated with giving up one opportunity for another (Ex: Project A $50K, Project B $75K. If you select Project B, it has an opportunity cost of the total of Project A, which is $50K.) |
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| Represents the total cost that should have been spent up to a particular point in time. |
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| Money made after expenses have been subtracted from revenue. |
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| Money set aside in a budget used for items that are difficult to predict. |
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