Cost Management in Construction Project Management

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Cost Management in Construction Project
Management
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Construction Project Management

• A construction project, however big or small,
  needs to be performed and delivered with care and
  planning.
• Cost is a major factor that needs to be
  effectively controlled through construction
  project management.
• Cost management includes a set of activities that
• Ensures the project is completed within the
  approved budget.

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Effective Cost Management Plan

• Resource Planning
• Estimation of Cost
• Cost Budgeting
• Cost Monitoring
• Cost Control

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Resource Planning

• During this phase a resource management plan is
  created which helps you identify all of the
  resources required to complete your construction
  project successfully.
• With this plan, the project manager establishes
  the amount of materials, labour, and equipment
  needed to complete your project.
• Alongside this, a schedule plan is created to
  know how and when resources will be utilized.
• This will help you know whether you have enough
  resources to complete the project.
• Once the resource types and quantities are
  known, the full cost of resources needed to
  complete a project is calculated.

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Estimation of Cost

• A cost estimate is the total cost involved in
  successfully finishing a project, from inception
  to completion.
• A variety of estimating tools, techniques and
  software are used to determine the total cost of
  completing a project.
• An accurate cost estimate helps to develop a
  cost management plan and creates the baseline for
  controlling the costs during the projects
  execution phase.

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Cost Budgeting

• Once cost estimates are created, the projects
  budget can be finalized and approved.
• Project managers typically release budgeted
  amounts in stages according to the level of a
  projects progress.
• These allocations may include contingencies and
  reserves.

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Cost Monitoring

• Once the construction work has started, the
  project manager keeps a close eye on project
  costs.
• When the item costs more than the estimate, the
  project manager determines the reason for the
  variation and either accepts or mitigates it. 
• This process is essential to ensuring that the
  estimated budget will be achieved.

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Cost Control

• Cost control is the practice of measuring
  variances from the cost baseline.
• All deviations to the cost baseline are noted and
  the expected final total costs are continuously
  predicted taking effective corrective action to
  avoid cost overruns.

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• With costs in mind, hire one of the best Project
  Management
• Consultants in Los Angeles for applying thorough
  cost estimating
• processes and techniques to ensure that a project
  comes in at or
• under your budget.

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