PM Discussion

I’m stuck on a Management question and need an explanation.

Topic 1: Project Costs

How do you estimate project costs?

As you learned earlier, customers and stakeholders expect project managers to deliver a definitive and functional cost estimate in a timely manner. How do project managers do this? Good question. As you read, there are three levels of estimation in a project: the WAG, the SWAG, and the “you bet your job on this figure” estimates. Actually, they are referred to in industry as, the “Order of Magnitude” the “Budget,” and the “Definitive” cost estimates. The PMBOK addresses them under Analogous, Parametric, and Bottom-up estimates respectively Explain which of the three is used where in the project lifecycle.

Topic 2:

Why should you know how to use EVM?

Project costs are monitored and controlled using a common technique called Earned Value Management (EVM).

Review the following figures below:

Project PV AC EV

A 10,000 11,000 10,000

B 9,000 8,000 7,000

C 8,000 8,000 8,000

D 7,000 7,000 5,000

Based on the Planned Values, Actual Costs, and Earned Values listed for Projects A, B, C, and D in the above table, how would you rank these four projects, from best- to worst-performing?