Cost Management is one area of project management that can be learned. It involves the necessary processes to complete the project within the budget. Its purpose is stated in PMP courses as “to determine the budget necessary to execute the project”. Its goal is to monitor and manage project costs to meet the budget. The first step in cost management knowledge is plan cost management process. This article will explain what plan cost management is and what should be included within a cost management plan.
What is the Plan Cost Management Process
Plan cost management refers to the establishment of policies, procedures, documentation, and policies for managing, expanding, controlling, and planning project costs. Projects will have many resources and different materials. Sometimes, you will also need to purchase additional equipment and tools. As you can learn in an online PMP training, the plan cost management process is designed to plan, manage, and control these expenses in a project.
Example of a cost management program for a construction project
For example, several civil engineers and construction workers will be involved in a construction project. There are many materials, such as cement, wood and steel. Tools and equipment such as trucks, bulldozers, hammers, etc., will be needed. They will be required.
The Plan Cost Management Process’s Major Output
The cost management process is primarily about determining the cost of each activity as well as determining the budget for the project. The project budget is then managed and controlled to ensure that the project is completed within the budget. Cost Management Plan is the main output of the plan cost control process.
This plan will provide guidance and direction about how project costs will be managed during the project. With the plan cost management process, you can see how much money is needed for a particular phase of the project.
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What are the Questions Answered in this Plan?
The cost management plan outlines how to estimate costs and how to calculate the budget. This management plan outlines how to manage and control the costs after the budget has been established.
This plan addresses two main questions
“How do I plan the cost of the project?” This plan will show you how to estimate the costs for each activity, each deliverable, and how to build the overall project budget.
“How do I manage the project to the cost base?” Once the budget has been established, the cost baseline is calculated. The cost baseline is the initial cost estimate for the project. If there are no changes to the project or any approved change requests, the budget will be met. The cost management plan will help you decide what to spend on throughout the project and make sure you meet the budget.
Like many management plans, the cost management plan is also part the project management plan. This helps to achieve the project goals and objectives.
What Should Be Included?
The Cost Management Plan should include 6 items.
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Costs will be estimated based on how much material you require. These units can change depending on where you are located or what project you are working on. For example, in the US or UK, these units are generally