
Cost Management for Engineers-Cost Terms
Cost Management for Engineers-Cost Terms
Cost management is the process of planning and controlling the budget of a business.
Value Engineering:
It is a balance between cost and quality to achieve the desired function. Value Engineering (VE), also called:
- Value Management.
- Value Analysis.
- Target costing.
Cost Management:
It is a powerful systematic methodology to optimize cost performance & overcome cost constraints.
Cash flow analysis: Determines the estimated annual costs and benefits for a project and the resulting annual cash flow.
Cost budgeting: Allocating the overall cost estimate to individual work items to establish a baseline for measuring performance.
Cost control: Controlling changes to the project budget.
Cost estimating: Developing an approximation or estimate of the costs of the resources needed to complete a project.
Direct costs: It is the cost that can be directly related to producing the products and services of the project.
Indirect costs: It is the cost that is not directly related to the products or services of the project but is indirectly related to performing the project.
Life cycle costing: It considers the total cost of ownership, or development plus support costs, for a project.
Profit: It is revenues minus expenses.
A cost management plan: It is a document that describes how the organization will manage cost variances on the project.
Cost budgeting: It involves allocating the project cost estimate to individual work items over time. and there are plenty of cost management software that apply this concept.
The Term Cost Centre Definition | |
AC | Actual Cost |
ACWP | Actual Cost of Work Performed |
ADM | Arrow Diagramming Method |
AF | Actual Finish date |
AOA | Activity-on-Arrow |
AON | Activity-on-Node |
AS | Actual Start date |
BAC | Budget at Completion |
BCWP | Budgeted Cost of Work Performed |
BCWS | Budgeted Cost of Work Scheduled |
BOM | Bill Of Materials |
CAP | Control Account Plan |
COQ | Cost of Quality |
CPI | Cost Performance Index |
CPM | Critical Path Method |
CV | Cost Variance |
CWBS | Contract Work Breakdown Structure |
DD | Data Date |
EAC | Estimate at Completion |
EF | Early Finish date |
ES | Early Start date |
ETC | Estimate to Complete |
EV | Earned Value |
EVM | Earned Value Management |
EVT | Earned Value Technique |
FF | Finish-to-Finish |
FF | Free Float |
FMEA | Failure Mode and Effect Analysis |
FS | Finish-to-Start |
LF | Late Finish date |
LS | Late Start date |
OBS | Organizational Breakdown Structure |
OD | Original Duration |
PC | Percent Complete |
PDM | Precedence Diagramming Method |
PF | Planned Finish date |
PM | Project Management or Project Manager |
PMBOK® | Project Management Body of Knowledge |
PMIS | Project Management Information System |
PMO | Program Management Office or Project Management Office |
PMP® | Project Management Professional |
PS | Planned Start date |
PSWBS | Project Summary Work Breakdown Structure |
PV | Planned Value |
QA | Quality Assurance |
QC | Quality Control |
RAM | Responsibility Assignment Matrix |
RBS | Resource Breakdown Structure or Risk Breakdown Structure |
RD | Remaining Duration |
RFP | Request for Proposal |
RFQ | Request for Quotation |
SF | Scheduled Finish date |
SF | Start-to-Finish |
SOW | Statement of Work |
SPI | Schedule Performance Index |
SS | Scheduled Start date |
SS | Start-to-Start |
SV | Schedule Variance |
SWOT | Strengths, Weaknesses, Opportunities, and Threats |
TC | Target Completion date |
TF | Target Finish date |
TF | Total Float |
T&M | Time and Material |
TQM | Total Quality Management |
TS | Target Start date |
VE | Value Engineering |
WBS | Work Breakdown Structure |
You should be aware of the above-mentioned cost terms to understand the Cost in Project Management.
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4 Comments
Project time and cost management is really important for businesses these days.
Thanx
thanks alot
Great content. It is really very informative. Thank you for sharing it with us. Keep up doing a great job.