PMBOK Cost Management

Overview

The PMBOK Cost Management skill supports the elaboration of documents for the Cost Management knowledge area — planning, estimating, budgeting, financing, and controlling costs so the project is completed within the approved budget. It covers cost management plans defining estimation methodology and EVM rules, cost estimates using analogous, parametric, bottom-up, or three-point techniques, basis of estimates documenting assumptions and confidence levels, project budgets with contingency and management reserves, time-phased cost baselines, and Earned Value Management performance reports with full metric calculations (PV, EV, AC, CV, SV, CPI, SPI, EAC, ETC, VAC, TCPI).

Getting Started

Upload your WBS, resource rates, or vendor quotes to the workspace and activate the PMBOK Cost Management skill. The agent will ask about the estimation technique, currency, and reserve policies, then build estimates tied to WBS work packages. For Earned Value reporting, provide current PV, EV, and AC data — the agent calculates all metrics, shows formulas, interprets trends, and recommends corrective actions.

Example Conversation

Below is an example of a typical session producing an Earned Value cost performance report at the midpoint of a software project.

You: I need a cost performance report for our mobile app project at the end of Month 6 (of 12). Here’s the data: BAC = $1,200,000. Planned Value (cumulative): $620,000. Earned Value (cumulative): $540,000. Actual Cost (cumulative): $610,000. We’ve completed 45% of the work. Can you calculate all EVM metrics and tell me what’s going on?

Agent: Here’s the Earned Value analysis for Month 6:

Variances:

• CV = EV - AC = $540,000 - $610,000 = -$70,000 (over budget)
• SV = EV - PV = $540,000 - $620,000 = -$80,000 (behind schedule)

Performance Indices:

• CPI = EV / AC = $540,000 / $610,000 = 0.89 (spending $1.13 for every $1 of value earned)
• SPI = EV / PV = $540,000 / $620,000 = 0.87 (progressing at 87% of planned rate)

Forecasts:

• EAC (typical) = BAC / CPI = $1,200,000 / 0.89 = $1,348,315
• EAC (atypical) = AC + (BAC - EV) = $610,000 + $660,000 = $1,270,000
• ETC = EAC - AC = $738,315 (if current performance continues)
• VAC = BAC - EAC = -$148,315
• TCPI (to meet BAC) = (BAC - EV) / (BAC - AC) = $660,000 / $590,000 = 1.12

Interpretation: The project is both over budget and behind schedule. With a TCPI of 1.12, you would need to perform the remaining work at 112% cost efficiency — a significant improvement over current performance. I recommend three corrective actions: (1) root-cause analysis of the cost variance, (2) evaluate scope reduction or fast-tracking opportunities, and (3) consider requesting a revised budget (EAC) of $1,350,000 with justification to the Change Control Board.

The full report with formulas, trend charts description, and corrective action plan is saved.

Document Excerpt

Below is a representative excerpt from an Earned Value cost performance report drafted with the skill.

Cost Performance Report — Excerpt

Project: Mobile Banking App v2.0 Reporting Period: Month 6 of 12 Currency: USD

Earned Value Summary

Variance Analysis

Forecasts

Corrective Actions

This excerpt is illustrative. Final content must reflect the specific project’s financial data, organizational policies, and current EVM standards.