The AMA Handbook of Project Management

By Paul C. Dinsmore; Jeannette Cabanis-Brewin | Go to book overview

CHAPTER 10
Project Cost Management
in Practice

? MUHAMED ABDOMEROVIC, PMP, FKI LOGISTEX

To complete a project within budgeted cost, we must understand how to effectively estimate, allocate, and manage project cost factors. Cost management is normally preceded by activities to define and assign resources to scheduled project activities. This process is known as resource estimating.


RESOURCE ESTIMATING

Aresource can be people, money, supplies equipment, material, space-anything that is required to accomplish the project work activities. Resource requirements are identified by analyzing each activity, and determining the types and quantity of each resource necessary to complete that work. The sum of the resources identified for a given activity can be further specified as the total quantity for that activity. Activities can also be combined to define resource requirements for specified segments of the project, such as life cycle phases or discrete milestones or deliverables.

As we have said, project resource requirements are equal to the sum of the resource requirements of all the scheduled activities. Therefore, before finalizing the resource requirements estimate, it is important to consider the impact of the schedule and availability. In most cases, project estimators assume that resources will be available when required. This may not be the case and it may be necessary to make adjustments to the resource loading in order to arrive at a practical solution. There are many heuristic approaches used to load resources; two of the more popular approaches are considered below:

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