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Thursday, 25 January 2007 20:48

Cost Budgeting

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Cost budgeting involves aggregating the estimated costs of individual schedule activities or work packages to establish a total cost baseline for measuring project performance. The project scope statement provides the summary budget. However, schedule activity or work package cost estimates are prepared prior to the detailed budget requests and work authorization.

Cost Baseline

A project’s cost baseline shows what the PM expects to spend on the project. It’s usually depicted as an S-curve, as shown below. The idea of the cost baseline allows the project manager and the host organizations management to predict when the project will be spending money and over what time period.

 cost-baseline.gif


Project Funding Requirements – Derived from the cost baseline.

 

 

Read 5431 times Last modified on Thursday, 10 December 2009 21:33

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