An Effective PMP Preparation Concepts Article

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An Effective PMP Preparation Concepts

To have effective pmp preparation studies must include outputs to cost estimating activity.

Author: Ben Brashen

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The pmp exam includes these concepts and the student must understand them in the course of their pmp preparation to do well. The following are the outputs to the cost estimating activity:

Activity Cost Estimates

This output is a quantitative report on the estimated cost needed to fulfill the project. The cost estimate can come in a summary or very detailed format. How this is presented depends on the organization and their expectations. The data presented in this assessment may include all labor, material, equipment, service, facility, information technology, etc costs. In addition, special costs like inflation and contingency allowances may be included. PMP exam preparation includes working through exercises to understand how to do these activities.

Basis of Estimates

This output gives the reasoning and support for how the cost estimates were determined. The following additional detail may be included:

- Basis of estimate
- Any assumptions made
- All known constraints
- Range of estimate like ±$25,000 or ±15 percent
- Level of confidence of the final cost estimate
- PMP preparation must include basis of estimates as part of the study.

Project Document Updates

Update any project documents affected by the estimating process.

This module presented the inputs, tools, techniques, and outputs to estimating project costs. Estimating is the process of determining the monetary requirements in executing the project to its completion. Estimating cost is a prediction based on factors at that moment. These concepts are covered in the pmp preparation and must be understood by the student to do well and succeed on the test to obtain the certification.

Inputs to project management include the scope baseline, project schedule, human resource plan, risk register, enterprise environmental factors, and organizational process. The goal is to identify all sources of cost that are involved in the process and analyzing them in the next activity.

The tools and techniques used to estimate costs include expert judgment, analogous estimating, parametric estimating, bottom-up estimating, three-point estimates, reserve analysis, cost of quality, estimating software, and vendor bid analysis. Each work package is analyzed with one of more of these tools for cost and risk.

Outputs to estimating cost include an activity cost estimate, basis of estimates, and updating project documents. These outputs are incorporated in the next section, which is determining the budget.

About Author

Kimberly Bloch, For more information on pmp prep course, pmp preparation, capm certification, please visit:- http://www.pmeducate.com/

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