Chapter Outline

In addition to establishing a baseline schedule for a project, it's also necessary to develop a baseline budget. Project costs are estimated when a proposal is prepared for the project. Once a decision is made to go forward with the proposed project, it's necessary to prepare a budget, or plan, for how and when funds will be spent over the duration of the project. Once the project starts, it's important to monitor actual costs and work performance to ensure that everything is within budget. At regular intervals during the project, the following cost-related parameters should be monitored:

• cumulative actual amount spent since the start of the project
• cumulative earned value of the work performed since the start of the project
• cumulative budgeted amount planned to be spent, based on the project schedule, from the start of the project

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