Answer to Question #275584 in Management for Suji

Question

Introduction – “Cost estimation in project management is the process of forecasting the financial and other resources needed to complete a project within a defined scope. Cost estimation accounts for each element required for the project – from materials to labour and calculates a total amount that determines a projects budget.”

Questions to answer:

 

1.Define and state the importance of project cost management processes

2.Identify and briefly explain - the main types of cost in project management 

3.Identify and briefly explain the relevance - major components of project cost management used in the workplace

4.Identify and briefly explain - 3 main challenges one can experience in cost estimation in project management in the workplace

5.Identify and briefly explain - 3 Ways/strategies a manager can do to improve costs estimation and budgeting in the workplace

Answer 1

Project cost management sets the baseline for project costs. Effective cost management ensures that a project's budget is on track and will be completed according to its planned scope. Without cost control, a company can easily lose money and costs can go above project profit.

Cost management in project management is the process of planning, estimating, budgeting, and controlling project costs. Cost management processes are in place to help project teams plan and control budgets during the project life cycle.

It makes it possible to reduce costs and increase the profit margin, as it allows identifying unnecessary expenses that are not generating return, as well as better investment opportunities.