What are the cost management tool methods

There are three types of estimation methods for cost management tool methods:

Analogical estimation: is a form of top-down estimation, usually done at the beginning of a project or when there is insufficient information.

Parametric estimation: is a modeling statistical technique such as regression analysis and learning curves.

Bottom-up estimation: is performed by making detailed cost estimates for project work packages, and then summing the results to arrive at the total project cost through cost accounts and a work breakdown structure (WBS). This method is the most accurate.

The concept of PMI cost estimation is often referred to as investment estimation in China, i.e., the total investment of the project is estimated on the basis of the study of the construction scale, technical program, equipment program, engineering program and project implementation schedule.

Cash flow analysis of the project

Project cost management is based on the preparation of financial statements, mainly financial cash flow statement, profit and loss account, sources and application of funds table, borrowing repayment schedule and so on. Among them, the project's cash flow analysis is the most important project management statements.

Through the project's financial cash flow analysis, you can calculate the project's financial internal rate of return, financial net present value, payback period and other indicators, so as to make a judgment on the project's decision.

When the cost deviation (CV) >0, indicating cost savings; conversely, when CV <0, indicating cost overruns.

When the progress deviation (SV) > 0, indicating that the progress is ahead of schedule; Conversely, when SV < 0, indicating that the progress is lagging behind.