PMP S5

Project Management Professional [PMP®]
A Guide to the Project

Management Body of Knowledge
PMP® Exam Preparation Course- (PMBOK® Guide) – Fifth Edition
The fifth lecture
Presented by
Hossam Ghanem,PMP,ITIL,MCSE
PMP® , "PMBOK "PMI R.E.P logo are registered marks of the Project Management Institute, Inc.
Presentation Agenda:
– What we will Study
• Plan schedule Mgmt.
• Define Activities
• Sequence Activities
• Estimate Activity Resource
• Estimate Activity Duration
• Developed Schedule
• Plan cost Mgmt.
• Estimate cost
• Determine budget
What we will Study
• The Planning processes group consists of the following processes (Part 2): as follows
.
Planning Processes Group

Process Project Phase Knowledge Area Key Deliverables
Plan Schedule Mgmt. Planning Time Mgmt. Schedule Mgmt. Plan
Define Activities Planning Time Mgmt. Activity list
Sequence Activities Planning Time Mgmt. Schedule network Diagram
Estimate Activity Resource Planning Time Mgmt. Activity Resource Req.
Estimate Activity Duration Planning Time Mgmt. Activity Duration Estimate.
Develop Schedule Planning Time Mgmt. Project Schedule
Plan schedule Mgmt.
Plan Schedule Management is the process of establishing the policies, procedures, and documentation for
planning, developing, managing, executing, and controlling the project schedule. The key benefit of this
process is that it provides guidance and direction on how the project schedule will be managed throughout the
project.
Source: Project Management Institute, a Guide to the Project Management Body of Knowledge, (PMBOK® Guide) - Fifth Edition,
Project Management Institute, Inc., 2013, Figure 6-3, Page 145”
Plan schedule Mgmt./ Inputs
Project Management Plan

The project management plan contains information used to develop the schedule
management plan which includes, but is not limited to:
• Scope baseline. The scope baseline includes the project scope statement and the
work breakdown structure (WBS) details used for defining activities, duration
estimation, and schedule management; and
• Other information. Other scheduling related cost, risk, and communications decisions
from the project management plan are used to develop the schedule
Plan schedule Mgmt./ Tools
Analytical Techniques
The Plan Schedule Management process may involve choosing strategic
options to estimate and schedule the project such as: scheduling
methodology, scheduling tools and techniques, estimating approaches,
formats, and project management software. The schedule management
plan may also detail ways to fast track or crash.
Plan schedule Mgmt./ Tools
Meetings
Project teams may hold planning meetings to develop the schedule management plan.
Participants at these meetings may include the project manager, the project sponsor,
selected project team members, selected stakeholders, anyone with responsibility for
schedule planning or execution, and others as needed.
Plan schedule Mgmt.
Note :
Schedule Mgmt. Plan can establish the following :
• Level of accuracy . The acceptable range and the amount for contingencies are specified.
• Units of measures. Each unit used in measurements such as ( staff hours , weeks for time ).
• Project schedule model maintenance . The process used to update the status and record
progress of the project.
• Organizational procedures links. The WBS provides the framework for the schedule
management plan, allowing for consistency with the estimates and resulting schedules
• Control threshold . Variance threshold for monitoring schedule performance.
• Reporting format . The format and frequency for the various schedule reports are defined.
Plan schedule Mgmt./ outputs
Schedule Management Plan
A component of the project management plan that establishes the criteria and the
activities for developing, monitoring, and controlling the schedule. The schedule
management plan may be formal or informal, highly detailed or broadly framed, based
upon the needs of the project, and includes appropriate control thresholds.
this definition is taken from the Glossary of the Project Management Institute, a Guide to the Project Management Body of
Knowledge, (PMBOK® Guide) - Fifth Edition, Project Management Institute, Inc., 2013'
Define Activities
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Define Activities / Description
Define Activities/ Summary
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Define Activities / Input
Scope Baseline The project deliverables, constraints, & assumptions documented in the
project scope baseline are considered explicitly when defining activities.
Enterprise Environmental Factors Project Management Information System (PMIS).and

scheduling software tools.
Organizational Process Assets Existing formal & informal activity planning-related

policies, procedures and guidelines, such as the scheduling methodology, that are
considered in the activity definition, and Lessons-learned knowledge base containing
historical info .
Schedule Management Plan
A key input from the schedule management plan is define the level of detail necessary to
manage the work
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Define Activities / tools
Decomposition
Subdividing the work packages into smaller, more manageable components called activities,
Activities represents the effort needed to complete a work package with team members
involvement in the decomposition can lead to better and more accurate results.
Rolling Wave Planning

The work to be accomplished in the within another one or two reporting periods in the near
future is planned in detail (work package level). Therefore, schedule activities can exist at
various levels of detail in the project’s life cycle.
During early strategic planning, when information is less defined, activities might be kept at
the milestone level
Expert Judgment
these definitions are taken from the Glossary of the Project Management Institute, a Guide to the Project Management Body of
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Define Activities / output
Activity List
• The activity list is a comprehensive list including all schedule activities that are
planned to be performed on the project.
• The activity list includes the activity identifier and a scope of work description for
each schedule activity in sufficient detail to ensure that project team members
understand what work is required to be completed.
• The activity list is used in the schedule model and is a component of the project
management plan.
• The schedule activities are discrete components of the project schedule, but are not
components of the WBS.
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Activity attributes describe the characteristics of the activities and are an
extension of the activity list. Activity attributes will change over the life of the project as
more information is known. In the early stages of the project, activity attributes might
include the activity ID, the WBS identification code it's associated with, and the activity
name. As you progress through the project and complete other Planning processes, you
might add predecessor and successor activities, logical relationships, leads and lags,
resource requirements, and constraints and assumptions associated with the activity.
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Activity attributes
Activity attributes for each schedule activity may include :
-activity identifier
-activity codes
-activity description
-predecessor activities
-successor activities
-logical relationships
-leads and lags
-resource requirements
-imposed dates
-constraints, and assumptions.
-the person responsible for executing the work
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Milestone List
• The list of schedule milestones identifies all milestones and indicates whether the
milestone is mandatory (required by the contract) or
• optional (based upon project requirements or historical information).
The milestone list is a component of the project management plan
Milestones Significant events or achievements

Acceptance of deliverables or phase completion
Quality control
Keeps team focused
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Sponsor
Need little bit information Technical Team

regarding phase status
based on milestone
More detail regarding work
status inside the phase
Purpose of milestone is
who , and what
information need to be
transferred
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Sequence Activities
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Sequence Activities/ description
Summary
• Sequence Activities involves identifying and documenting the logical
relationships among schedule activities.
• Schedule activities can be logically sequenced with proper precedence

relationships, as well as leads and lags to support later development of
a realistic and achievable project schedule.
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Sequence Activities/ inputs
• Activity List
• Activity Attributes
• Milestone List
• Project Scope Statement

The project scope statement contains the product scope description, which
includes product characteristics that often can affect activity sequencing.
• Organizational Process Assets
• Enterprise environmental factors
• Schedule management plan
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Sequence Activities/ Tools
Precedence Diagram Method (PDM) is a visual representation technique that depicts the
activities involved in a project. It is a method of constructing a project schedule network
diagram that uses boxes/nodes to represent activities and connects them with arrows that
show the dependencies
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Dependency Determination
Four types of dependencies are used to define the sequence among the activities.
Mandatory dependencies.(Hard Logic) Mandatory dependencies are those that are

inherent in the nature of the work being done. Mandatory dependencies often involve
physical limitations, such as on a construction project.
Discretionary dependencies.(preferred logic or soft), usually established based on
knowledge of best practices within a particular application area
Based on Project Manager Decision
External dependencies.are those that involve a relationship between project
activities and non-project activities.
the testing schedule activity in a software project can be dependent on delivery of
hardware from an external source
Internal dependencies
Based on team’s control
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Leads and lags–definition
Definition
The amount of time whereby a successor activity can be advanced with

Leads
respect to a predecessor activity.
The amount of time whereby a successor activity is required to be delayed

Lags
with respect to a predecessor activity.
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Sequence Activities/
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Sequence Activities/ outputs
The main output from the sequence activities process is

the project schedule network diagram, but to be
clear, this is not the actual schedule as there are no
start or finish dates assigned to each activity at this
point.
And Project Documents Updates:

Activity lists,
Activity Attributes,
Milestone list, and
Risk Register
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Estimate Activities Resources
Summary
• Analyzing project activity to determine the type and quantities of material,
people, equipment, or supplies required to perform each activity,
• Understanding the number of resources required to complete the activity and
determining how long they will be used for that activity,
Project Management Institute, Inc., 2013, Figure 6-12, Page 161.
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Estimate Activities Resource / inputs
Schedule Mgmt. Plan

Activity List
The activity list identifies the schedule activities for resources that are estimated.
Activity Attributes
Resource Calendars
Information on which resources (such as people, equipment, and materiel) are potentially
available is used for estimating the resource types.
Enterprise Environmental Factors

The process uses the infrastructure resource availability information included in enterprise
environmental factors.
Organizational Process Assets

Provide the policies of the performing organization regarding staffing and the rental or
purchase of supplies and equipment that are considered during activity resource estimating..
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Estimate Activities Resource / tools and techniques
TOOLS & TECHNIQUES
1. Expert Judgment Any person with expertise in resource

planning and estimating can help assess
resource inputs.
2. Alternative Analysis Many schedule activities have different
alternatives methods of accomplishment in
terms of resources.
3. Published Estimating Data Unit costs of resources and production rates
for an industry may be obtained from
professional organizations.
4. Bottom-Up Estimating Aggregates the cost or duration of the project
by aggregating the cost or duration of the
individual work packages.
5. Project Management Used to help plan, organize, and manage
Information System resources.
(PMIS)
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Estimate Activities Resource / Outputs
OUTPUTS
1. Activity Resource Identifies the type and quantity of resources
Requirements needed for each activity in a work package.
2. Resource Breakdown Hierarchical representation of resources by
Structure category and type, typical categories
being: labor, material, equipment, supplies.
3. Project Documents •Activity list
Updates •Activity attributes
•Resource calendars
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Estimate Activities Duration
Project Management Institute, Inc., 2013, F 6-14, Page 166
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Estimate Activities Duration
The process of estimating the number of work periods needed to

complete individual activities with estimated resources.
Once the amount of resources that

can be assigned to a project are
known as a result of process 6.4
Estimate Activity Resources, then
you can estimate the activity
durations in the current process
6.5 Estimate Activity Durations.
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Estimate Activities Duration / Inputs
Estimate Activity Durations: Inputs

Activity List.
Activity Attributes.
Schedule Mgmt. Plan
Activity Resource Requirements
The resources assigned to the activity, and the availability of the resources will influence the
duration of most activities.
For example, if a schedule activity requires two engineers working together to efficiently
complete a design activity, but only one person is applied to the work, the schedule activity will
generally take at least twice as much time to complete.
Resource Calendars
The type, availability, & capabilities of human resources, The type, quantity, availability, &
capability when applicable, of both equipment & material resources.
For example: if a senior and junior staff member are assigned full time, a senior staff member can
generally be expected to complete a given schedule activity in less time than a junior staff
member..
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Estimate Activities Duration / Inputs
Project Scope Statement

Constraints & assumptions, Examples of assumptions include: existing condition,
availability of information, and length of the reporting periods.
Examples of Constraints include: available skilled resources, and ccontract terms
and requirements
Enterprise Environmental Factors
Duration estimating databases and other historical reference data. (e.g., how long it takes
concrete to cure or how long a government agency usually takes to respond to certain types
of requests).
Organizational Process Assets
Historical information on the likely durations of many categories of activities is often
available( such as the project calendar (a calendar of working days or shifts on which
schedule activities are worked, and nonworking days on which schedule activities are idle).
Risk Register [will Describe later ]
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Estimate Activities Duration / tools
TOOLS & TECHNIQUES

Expert judgment can be used by using historical information to give
1. Expert judgment duration estimates from similar projects. It can also used to reconcile
different estimating methods.
Uses a measure from a previous similar project to estimate the duration or
2. Analogous estimating
cost of the current project in a top-down approach.
Uses an algorithm to estimate the duration or cost of the current project
3. Parametric estimating
based on historical data from previous similar projects.
A single-point activity duration estimate can be improved by using the
most likely, the optimistic (best-case), and pessimistic (worst-case)
4. Three-point estimating
estimate for each activity. These three estimates can be combined by
using the triangular or beta distribution formulas.
Group Decision-Making
5. Team-based approaches can be useful for improving duration estimates.
Techniques
Duration estimates can use “contingency reserves” for risks in the risk
6. Reserve analysis
register that the “known-unknowns” of the project.
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Estimate Activities Duration / outputs
OUTPUTS
Activity Duration The duration estimates may include a range of possible
1.
Estimates results.
•Activity attributes
Project Document
2.
Updates •Assumptions made during the activity duration
estimate
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Estimate Activities Duration / Exercise
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Estimate Activities Duration / Exercise
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Developed Schedule
Project Management Institute, Inc., 2013, Figure 6-16, Page 173
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Developed Schedule
• The purpose of this process is to put everything together from the first
five time management processes and create a schedule model
• Project schedule development, an iterative process, determines
planned start and finish dates for project activities.
• Schedule development can require that duration estimates and
resource estimates are reviewed and revised to create an approved
project schedule that can serve as a baseline against which progress
can be tracked.
• Schedule development continues throughout the project as work

progresses, the project management plan changes, and anticipated risk
events occur or disappear as new risks are identified
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Developed Schedule/ Inputs
INPUTS
1. Schedule Management Plan Identifies the scheduling method and tools to be used,
and how the schedule is to be calculated. It is an output
of process 6.1 Plan Schedule Management.
2. Activity List Identifies activities that will be included in the schedule
model. This is an output of process 6.2 Define Activities.
3. Activity Attributes Provides details to be used to build the schedule
model. This is an output of process 6.2 Define Activities.
4. Project Network Schedule Contains the logical relationships between predecessor
Diagrams and successor activities used to calculate the
schedule. This is an output of process 6.3 Sequence
Activities.
5. Activity Resource Identifies types and quantities of resources required for
Requirements each activity used to create the schedule model. This is
an output of process 6.4 Estimate Activity Resources.
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Developed Schedule/ Inputs
6. Resource Calendars Contains information on the availability of resources. This is an output

of process 6.4 Estimate Activity Resources.
7. Activity Duration Estimates Contains quantitative assessments of the likely number of work periods
required to complete an activity. This is an output of process 6.5
Estimate Activity Durations.
8. Project Scope Statement Contains assumptions and constraints that can impact development of
the project schedule model. This is an output of process 5.6 Define
Scope.
9.. Risk Register Identified risks and their characteristics affect the schedule
model. This is an output of Risk Management.
10. Project Staff Assignments Specifies which resources are assigned to each activity. This is an
output of Human Resources Management.
11. Resource Breakdown Structure Provides details by which resource analysis can be done. This is an
output of process 6.4 Estimate Activity Resources.
12 EEFs •Scheduling standards

•Scheduling tool
•Communication channels
13 OPAs •Project calendars
•Scheduling methodology
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Developed Schedule/Tools
TOOLS & TECHNIQUES

1. Schedule network Technique that generates the schedule model: it includes
analysis •Critical path method
•Critical chain method
•What-if analysis
•Resource optimization techniques
and calculates early and late start and finish dates of project
activities.
2. Critical path Through a forward and backward pass analysis, it calculates
method early start, early finish, late start, and late finish dates for all
activities to find the critical path, the longest path through a
project which consequently yields the shortest possible project
duration.
3. Critical chain Allows project team to place buffers on any project schedule
method path to account for limited resources and project uncertainties.
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Developed Schedule/Tools
4. Resource Used to adjust schedule due to demand and supply of resources:

optimization •Resource leveling
techniques •Resource smoothing
5. Modeling •What-if scenario analysis: used to assess feasibility of the project

techniques schedule under adverse conditions
•Simulation: calculates multiple project durations based on different sets
of assumptions (Monte Carlo analysis)
6. Leads and lags Develops viable schedule by adjusting the start time of successor activities.
7. Schedule Shortens project duration without reducing the project scope in order to
compression meet schedule constraints.
•Crashing: adds resources
•Fast-tracking: activities normally done in sequence are now performed in
parallel for part of their duration
8. Scheduling tool Automated scheduling tools contain the schedule model and expedite the
scheduling process.
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Developed Schedule/ITools
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Critical Chain Method

Critical chain scheduling is a method of scheduling that takes limited resources into
account when creating a project schedule and includes buffers to protect the project
completion date.
A buffer is additional time to complete a task
People often add a buffer and use it if it’s needed or not
Critical chain schedule removes buffers from individual tasks and instead creates
project buffer, which is additional time added before the project’s due date
Feeding buffers, which are addition time added before tasks on the critical path.
Critical chain scheduling assumes resources do not multitask because it often delays
task completions and increases total durations
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Please Understand carefully for exam
Can there be more one critical path ? Yes , you can have two , three , or many critical paths
Do you want there to be ? No; it increases risk
Can there be negative float ? Yes; it means you are behind
How much float does the critical path have ? Zero total float
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Resource Optimization Techniques

CPM and PERT do not consider resource availability. Now that you
have a schedule of activities and have determined the critical path, it's
time to plug in resources for those activities and adjust the schedule or
resources according to any resource constraints you discover.
Remember that you identified resource estimates during the Estimate
Activity Resources process.
use
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There are two types of Resource Optimization Techniques

use
Recourse leveling – also called the resource-based method
Recourse smoothing–
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Schedule Compression
Schedule compression techniques are used to shorten the schedule duration without reducing the project scope,
in order to meet schedule constraints, imposed dates, or other schedule objectives. Schedule compression
techniques include, but are not limited to:
• Crashing. A technique used to shorten the schedule duration for the least incremental cost by adding
resources. Examples of crashing include approving overtime, bringing in additional resources, or paying to
expedite delivery to activities on the critical path. Crashing works only for activities on the critical path where
additional resources will shorten the activity’s duration. Crashing does not always produce a viable alternative
and may result in increased risk and/or cost.
• Fast tracking. A schedule compression technique in which activities or phases normally done in sequence
are performed in parallel for at least a portion of their duration. An example is constructing the foundation for a
building before completing all of the architectural drawings. Fast tracking may result in rework and increased
risk. Fast tracking only works if activities can be overlapped to shorten the project duration.
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Scheduling Tool
Automated scheduling tools contain the schedule model and expedite the scheduling process
by generating start and finish dates based on the inputs of activities, network diagrams,
resources and activity durations using schedule network analysis. A scheduling tool can be
used in conjunction with other project management software applications as well as
manual methods.
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Leads and Lags
Leads and lags are refinements applied during network analysis to

develop a viable schedule by adjusting the start time of the successor
activities. Leads are used in limited circumstances to advance a
successor activity with respect to the predecessor activity, and lags
are used in limited circumstances where processes require a set period
of time to elapse between the predecessors and successors without
work or resource impact.
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Modeling Techniques
Modeling techniques typically include the use of what-if scenario analysis and simulation.
What-if scenario analysis uses different sets of activity assumptions to produce

multiple project durations. For example, what would happen if a major deliverable is
delayed or the weather prevents you from completing a deliverable on time? What-if
analysis literally asks the question, “What-if (fill in the blank) happens on the
project?” and attempts to determine the potential positive and/or negative impacts to
the project. What-if questions help determine the feasibility of the project schedule
under adverse conditions. They are also useful to the project team in preparing risk
responses or contingency plans to address the what-if situations. Worst-case what-if
scenarios may result in a no-go decision.
Simulation techniques use a range of probable activity durations for each activity
(often derived from the three-point estimates), and those ranges are then used to
calculate a range of probable duration results for the project itself. Monte Carlo is a
simulation technique that runs the possible activity durations and schedule
projections many, many times to come up with the schedule projections and their
probability, critical path duration estimates, and float time
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Developed Schedule/outputs
OUTPUTS
1. Schedule Baseline The approved version of the schedule model by which performance of the project
will be measured. Can only be changed through formal change control
procedures.
2. Project Schedule The schedule baseline refers to the schedule model, whereas the project schedule
refers output of the schedule model. It can be represented in the following ways:
•Bar charts
•Milestone charts
•Project schedule network diagrams
3. Schedule Data Information used to describe and control the schedule:
•Resource requirements
•Alternative schedules (best case vs. worst case, resource-leveled vs. non-
resource-leveled, etc.)
•Scheduling of contingency reserve
4. Project Calendars Identifies working days and shifts available for scheduled activities of the project.
5. Project Management •Schedule baseline

Plan Updates •Schedule management plan
6. Project Documents •Activity resource requirements
Updates •Activity attributes
•Calendars
•Risk register
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Break
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What we will Study
• The Planning processes group consists of the following processes (Part 3): as follows
.
Planning Processes Group

Process Project Phase Knowledge Area Key Deliverables
Plan cost Mgmt. Planning Cost Mgmt. Cost e Mgmt. Plan
Estimate Activities cost Planning Cost Mgmt. Activity cost estimate
Determine budget Planning Cost Mgmt. Cost baseline
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Plan cost Mgmt.
Summary
Project cost Mgmt. includes the process involved in planning , estimating , budgeting and
controlling cost so that the project can be completed within the approved budget.
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Plan cost Mgmt. / Tools
Expert Judgment
Expert judgment, guided by historical information, provides valuable insight about the environment
and information from prior similar projects. Expert judgment can also suggest whether to combine
methods and how to reconcile differences between them.
Judgment based upon expertise in an application area, Knowledge Area, discipline, industry, etc., as
appropriate for the activity being performed should be used in developing the cost management plan.
Analytical Techniques
Developing the cost management plan may involve choosing strategic options to fund the project such
as: self-funding, funding with equity, or funding with debt. The cost management plan may also detail
ways to finance project resources such as making, purchasing, renting, or leasing. These decisions,
like other financial decisions affecting the project, may affect project schedule and/or risks.
Organizational policies and procedures may influence which financial techniques are employed in
these decisions. Techniques may include (but are not limited to): payback period, return on
investment, internal rate of return, discounted cash flow, and net present value.
Meetings
Project teams may hold planning meetings to develop the cost management plan. Attendees at these
meetings may include the project manager, the project sponsor, selected project team members,
selected stakeholders, anyone with responsibility for project costs, and others as needed.
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Plan cost Mgmt. outputs
Cost Management Plan

The cost management plan is a component of the project management plan and describes how the
project costs will be planned, structured, and controlled. The cost management processes and
their associated tools and techniques are documented in the cost management plan.
For example, the cost management plan can establish the following:
• U nits of measure. Each unit used in measurements (such as staff hours, staff days,
weeks for time measures; or meters, liters, tons, kilometers, or cubic yards for quantity
measures; or lump sum in currency form) is defined for each of the resources
• Reporting formats. The formats and frequency for the various cost reports are defined.
• Process descriptions. Descriptions of each of the other cost management processes are
documented.
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Estimate cost
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Estimate cost / input
Cost management plan the output of plan cost management process. The cost management plan
defines how project costs will be managed and controlled. It includes the method used and the level of
accuracy required to estimate activity cost
Scope baseline.
This uses the project scope statement with important references relating back to the underlying needs that
led to its creation. Also important here is that the scope statement contains assumptions and constraints
that relates to the scope, and each of these will affect the cost estimates.
Project schedule.
Projects consume large amounts of cost and knowing when such costs are needed, is important
particularly when considering cash-flow. For this reason, and cost performance baseline will be created as
part of the next process, ‘determine budget’.
.
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Estimate cost / input
Human resource plan.

This document shows what types of resources the project will need and includes how all they will be
procured. Both of these aspects will have a direct affect on cost estimates generated in the estimate
costs process.
Risk register.
All risks contain impact. Here, the risk register will help identify the risks that will have an impact on
estimate costs, and these will need to be factored in when estimating project costs. The register will
also contain opportunities, and any that may reduce costs are important to consider here.
EEF Enterprise environmental factors.

The environment within which the project is to be run will have a large effect on the estimate costs and
hence the budget that will be required. The marketplace, policies, procedures and processes, laws
and regulations are just some examples of factors that will have a direct affect on costs.
Organizational process assets.
Usually cost information can be gleaned from previous similar projects, lessons learned, or any
guidelines that must be followed. In addition there may be software tools or databases that contain
important cost data.
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Estimate cost / Tools and Techniques
TOOLS & TECHNIQUES

Expert judgment can be used by using historical information to give
1. Expert Judgment duration estimates from similar projects. It can also used to reconcile
different estimating methods.
Uses a measure from a previous similar project to estimate the
2. Analogous Estimating
duration or cost of the current project in a top-down approach.
Uses an algorithm to estimate the duration or cost of the current
3. Parametric Estimating
project based on historical data from previous similar projects.
Estimates costs of individual work packages, and these estimates are
4. Bottom-Up Estimating
then totaled or “rolled up” to higher levels.
Accuracy of estimates may be improved by considering risk in order
to create three estimates: the most-likely (cM), optimistic (cO), and
5. Three-Point Estimating
pessimistic (cP) cost estimate. These three estimates are combined in
either the triangular or beta distribution.
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Duration estimates can use “contingency reserves” for risks in
6. Reserve Analysis
the risk register that the “known-unknowns” of the project.
Assumptions about the cost of quality may effect the cost
7. Cost of Quality (COQ)
estimates.
Project Management
8. Automated tools used to create cost estimates.
Software
Responsive bids from qualified vendors should be analyzed to
9. Vendor Bid Analysis
create cost estimates.
Group Decision-Making Team-based approaches can be useful for improving duration
10.
Techniques estimates.
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Estimate cost / Tools
Notes
Parametric Modeling Estimation: there are two type of this techniques
• Regression Analysis is a mathematical model based upon historical information .
• Learning Curve model is based upon the principal that the cost per unit decreases
as more work gets completed.
Many of these techniques used in the Cost Management knowledge area are
similar to those used in creating the duration estimates in the Time Management
knowledge areas. Some additional techniques not used in Time Management are
the Cost of Quality and Vendor Bid Analysis, from the Quality and Procurements
knowledge areas, respectively.
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Estimate cost / outputs
OUTPUTS
Quantitative assessments of the probable costs to

1. Activity Cost Estimates
complete project.
2. Basis of Estimates Details supporting the activity cost estimates (output #1).
The risk register will be updated to include the estimated

3. Project Documents Updates
costs of risk responses.
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Determine Budget : Input
Project Management Institute, Inc., 2013, Figure 7-6, page 208”
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Determine Budget :
Determine Budget
What is Determine Budget?:-Allocating the overall cost estimate to individual activities
or work packages, in order to establish a cost baseline for measuring project
performance.
Importance of project budget:

• Ensures best allocation of project funds,
• Establishes project cost baseline,
• Keeps the project under control.
It distribute cost on time phases so that the performing org will know how to plan for
cash flow and likely expenditures.
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INPUTS
1. Cost Management Plan This is an output of process 7.1 Plan Cost Management.
The scope management plan has three components of the scope
baseline:
•Project Scope Statement (output of 5.3 Define Scope)

2. Scope Baseline
•WBS (output of 5.4 Create WBS)
•WBS Dictionary (output of 5.4 Create WBS)

The cost estimates of each activity within a work package are
3. Activity Cost Estimates aggregated or “rolled up” to get a cost estimate for each work
package as a whole. This is an output of process 7.2 Estimate Costs.
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Details supporting the activity cost estimates (input #3). This is another output
4. Basis of Estimates
of process 7.3 Estimate Costs.
This is used to assign costs to the calendar period in which they are scheduled
5. Project Schedule
to occur. This is an output of process 6.6 Determine Schedule.
This is used to indicate resource costs over the duration of the project.
6. Resource Calendars
This is an output of the Human Resources Management process 9.2 Acquire
Project Team.
Used to aggregate costs for risk responses to obtain the contingency reserves
7. Risk Register
for the project. This is an output of process 11.2 Identify Risks.
This is used for products, services or results that are purchased from suppliers
8. Procurement Agreements or vendors in order to complete the project. This is an output of Procurements
Management process 12.
•Cost budgeting policies, templates, guidelines
9. OPAs •Cost budgeting tools
•Cost reporting formats
79
Determine Budget : tools
TOOLS & TECHNIQUES

Cost estimates of work packages in the WBS are aggregated or
1. Cost Aggregation “rolled up” at higher levels (including control accounts) and then
finally for the entire project.
This establishes the contingency reserves and management
2. Reserve Analysis
reserves for the project.
Guidance in the area of determining the budget by those with
expertise. This expertise can come from project team members,
3. Expert Judgment
outside consultants, stakeholders (including customers), or
professional or industry associations.
4. Historical Relationships These are used to develop analogous or parametric estimates.
The expenditure on the project needs to be reconciled with the
Funding Limit
5. funding limits on the commitment of funds to the project, and
Reconciliation
the timing of these commitments.
80
Determine Budget : outputs
OUTPUTS
The approved version of the time-phased project budget.
Management reserves are not included in this cost baseline.
1. Cost Baseline
The management reserves plus the cost baseline give the
project budget.
The funding for the project may occur in periodic
2. Project Funding Requirements increments, which may place time constraints on work to be
done in the project schedule.
•Risk register
3. Product Documents Updates •Activity cost estimates
•Project schedule
81
Determine Budget : outputs
82
End
83

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Project Management Professional [PMP®]

A Guide to the Project

The fifth lecture

– What we will Study

• Plan schedule Mgmt.

• Estimate Activity Resource

• Estimate Activity Duration

• Plan cost Mgmt.

Planning Processes Group

Define Activities Planning Time Mgmt. Activity list

Sequence Activities Planning Time Mgmt. Schedule network Diagram

Estimate Activity Resource Planning Time Mgmt. Activity Resource Req.

Estimate Activity Duration Planning Time Mgmt. Activity Duration Estimate.

Develop Schedule Planning Time Mgmt. Project Schedule

Project Management Plan

management plan which includes, but is not limited to:

estimation, and schedule management; and

The Plan Schedule Management process may involve choosing strategic

options to estimate and schedule the project such as: scheduling

methodology, scheduling tools and techniques, estimating approaches,

formats, and project management software. The schedule management

plan may also detail ways to fast track or crash.

schedule planning or execution, and others as needed.

• Control threshold . Variance threshold for monitoring schedule performance.

Schedule Management Plan

Define Activities/ Summary

Enterprise Environmental Factors Project Management Information System (PMIS).and

Organizational Process Assets Existing formal & informal activity planning-related

Schedule Management Plan

Rolling Wave Planning

Activity attributes describe the characteristics of the activities and are an

The milestone list is a component of the project management plan

Milestones Significant events or achievements

Need little bit information Technical Team

• Schedule activities can be logically sequenced with proper precedence

• Project Scope Statement

Mandatory dependencies.(Hard Logic) Mandatory dependencies are those that are

Leads and lags–definition

The amount of time whereby a successor activity can be advanced with

The amount of time whereby a successor activity is required to be delayed

The main output from the sequence activities process is

And Project Documents Updates:

Schedule Mgmt. Plan

Enterprise Environmental Factors

Organizational Process Assets

TOOLS & TECHNIQUES

1. Expert Judgment Any person with expertise in resource

The process of estimating the number of work periods needed to

Once the amount of resources that

Estimate Activity Durations: Inputs

Project Scope Statement

TOOLS & TECHNIQUES

• Schedule development continues throughout the project as work

6. Resource Calendars Contains information on the availability of resources. This is an output

12 EEFs •Scheduling standards

TOOLS & TECHNIQUES

4. Resource Used to adjust schedule due to demand and supply of resources:

5. Modeling •What-if scenario analysis: used to assess feasibility of the project

Critical Chain Method

Please Understand carefully for exam

Do you want there to be ? No; it increases risk

Can there be negative float ? Yes; it means you are behind

Resource Optimization Techniques