Sunday, February 1, 2015

Cost baseline

Cost baseline is the approved version of the time-phased project budget, but excludes management reserves.

Can only be changed through formal change control procedures and is used as a basis for comparison to actual results.

Developed as a summation of approved budgets for different schedule activities.

Management reserves are added to the Cost baseline to produce the project budget.

Cost Forecasts are derived from progress against the cost baseline and computed estimates to complete (ETC).  Typically expressed in terms of Cost variance (CV) and cost performance index (CPI).

An estimate to completion (EAC) can be compared to budget at completion (BAC) to see if the project is still within tolerance ranges of if a change request is required.

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