This lesson covers how to determine the budget of a project. Determining the budget rolls up the cost estimates into a total project budget that creates the Cost Baseline. The Cost Baseline includes a time based approach to determine project costs as time passes and the Project Funding Requirements. [toggle_content title="Transcript"] The last area under planning for cost management is to determine the budget. Determining the budget rolls the cost estimates into a total project budget. That creates the cost baseline which includes the time based approach to determine the project costs as time passes and the project funding requirements are determined. Your key outputs is the cost baseline and the project funding requirements. Your cost baseline is going to be your approved budget. The one thing for the cost baseline it does not include the management reserve. Any of those risks that you put in. Example of the one million dollar building does not include the extra hundred thousand that you included. It doesn't also include fee so fee is also known as profit. Your project funding is I am going to need ten percent of this project funding upfront so it's based between the time when you need the money because you don't always get paid everything at once and most times you don't get paid at the very end. So you try to figure out what cycle am going to get paid. Is it monthly, are there milestone that need to be completed. It's your basic over how much you are going to get paid and what I am going to get paid. Your inputs are the cost management plan, scope baseline...scope baseline is your WBS, WBS dictionary and your scope statement that came out of the scope knowledge area. Activity cost estimates which was created in this knowledge area. So that's the basis of estimates. Your project schedule comes out of the time knowledge area. Resource counters come out of the human resources knowledge area. Risk register comes out of the risk knowledge area and any agreements that you have within any of those or prime or quick. Any agreements whatsoever. Your tools are cost aggregation, reserve analysis, expert judgement, historical relationships and funding money reconciliation. In summary, you have all these inputs which are cost management plan, scope baseline, activity cost estimates, basis of estimates, project schedule, resource counters, risk register and agreements. The tools are cost aggregation, reserve analysis, expert judgement, historical relationships and funding money reconciliation. Your outputs is the cost baseline and the project funding requirements. [/toggle_content]
Project Management Professional (PMP) - PMI
Our online PMP training course educates on how to initiate, plan and manage a project, as well as the process behind analyzing risk, monitoring and controlling project contracts and how to develop project schedules and budgets.