Cost Management Concepts

Let's kickstart this Primavera P6 course off by exploring the benefits of cost-loading a schedule. Why bother? What are the key advantages? We'll also dig into the concepts of Top-Down Planning versus Bottom-Up Planning - 2 accepted methods used in many industries. And we'll explore which one Primavera P6 does best and why. Not only that, you'll get an overview of the 2 ways to enter planned costs in Primavera P6 Professional. Learn all about these cost management concepts in this video.

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Hi, welcome to the first video. Now let’s get started by talking about some important cost management concepts. When you get into the cost management side of managing projects and you decide to manage your projects cost alongside your schedule, things can get complicated a little bit. Let’s start by asking an important question. Why should we cost load to schedule?

Why do we bother putting our costs into a schedule? There are some important benefits you should be aware of. The most important reason the cost so to schedule is to kind of have this marriage between schedule and cost. We get our cash flow or our cost forecast. What that means is based on how the activities have been laid out and scheduled, we will know exactly how we are going to spend our money.

Where the peaks are, where the valleys are. From the cost perspective and a management perspective that can be incredibly valuable to a project manager. Number two, we can track our plan versus our actual cost rate there in the tool and see everything all together. We can also track how changes in the forecasted schedule will affect cost.

So we have change requests. If we have project set incredibly late, we can see how the changing schedule will affect the changing cost. Lastly, if you want to do anything related to earning value management, you need to know how to cost load a schedule. A...

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