Project Cost Management
Having identified the resources needed to complete the project, it is now necessary to estimate how much each of these resources cost. The sum of all costs related to all resources is the total project costs. Cost estimating is the process of calculating and computing the costs of all the resources that have been identified to be necessary to complete the project. Such resources can be identified from the project scope statement, work breakdown structure, components and activities. Cost estimates for resources can in turn be affected by quality choice, risk influence and procurement matters. Resources typically include materials, manpower and machine. In addition, costs of these resources can be influenced by management competence, methods of construction and money to fund the project. Collectively, this can be abbreviated as the 6 M’s. Estimating the costs of resources can be affected by economic conditions, currency fluctuations, market competition and other variations such as those relating to availability as well as demand and supply situation.