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School For Postgraduate Studies: Master of Project Planning & Management-Mpp

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79 views17 pages

School For Postgraduate Studies: Master of Project Planning & Management-Mpp

Uploaded by

Saidi Buyera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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SCHOOL FOR

POSTGRADUATE STUDIES
MASTER OF PROJECT
PLANNING & MANAGEMENT-MPP

COURSE UNIT-
PROJECT RISK & COST MANAGEMENT
MODULE 1: INTRODUCTION TO PROJECT
COST MANAGEMENT

© Eelo University - lectures


The objectives of this Module are to;
i. Get an over view of project cost
management
ii. Understand the meaning of project cost
iii. Define project cost management
iv. Study the cost management processes
v. Identify the cost elements
OVERVIEW OF PROJECT COST MANAGEMENT
PROJECT COST ?
The project cost is a cost required to
procure all the needed products,
services and resources to deliver the
project successfully. Example: In an
example of a construction project,
the cost estimation starts from land
acquisition cost, construction cost,
materials cost, administration cost,
labor cost and other direct and
indirect costs.
PROJECT COST MANAGEMENT

Cost Management includes


the processes involved in
planning, estimating &
budgeting, financing,
funding, managing, and
controlling costs so that the
project can be completed
within the approved budget.
COST MANAGEMENT PROCESSES

Plan Cost Management


Plan cost management is
the process of defining
how the project costs will
be estimated, budgeted,
managed, monitored, and
controlled.
ESTIMATE COST

Estimate cost is the


process of developing
& approximation of the
monetary resources
needed to complete the
project works.
DETERMINE BUDGET

Determining budget is the


process of aggregating the
estimated costs of
individual activities or work
packages to establish an
authorized cost baseline.
BUDGET SAMPLE
OFFICE EXPENSES FOR 6 MONTHS
DETAILS UNITS QTY P/U TOTAL
Telephone Months 6 180 1,080
Internet Months 6 150 900
Power Months 6 200 1,200
Water Months 6 60 360
Welfare Months 6 150 900
Rent Months 6 500 3,000
Cleaning Months 6 160 960
Fuel Months 6 300 1,800
Maintenance Months 6 200 1,200
Sub-total 11,400
CONTROL COST

Control cost is the process


of monitoring the status of
the project, to update the
project costs, and manage
changes to the cost baseline.
COST MANAGEMENT ELEMENTS

As mention in the above slides;


useful elements of project cost
management. 1. Cost Estimation.
One of the most important
elements of a project cost
management tool is cost
estimation, which is the practice of
forecasting the price of a complete
project with a defined scope.
Recommended Software. Forecasts
The Elements of Cost are the three types of
product costs (labor, materials and overhead) and
period costs.
Further reading
1. Project Estimating and Cost Management
By: Parviz F. Rad,Ginger Levin
2. The Advanced Project Management Office
By: Parviz F. Rad,Ginger Levin
ACTIVITY 1 – COURSE WORK
10 MARKS. IT ACCOUNTS FOR
10% OF THE SEMESTER MARKS

Question –
While giving examples, explain the project
cost management process.
Hand in 7 days time

#Thank you for being part of this lecture#

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