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	<title>PMServicesNW &#187; Cost</title>
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	<link>http://www.pmservicesnw.com</link>
	<description>Free project management information and downloads</description>
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		<title>3 Techniques for Estimating Project Cost</title>
		<link>http://www.pmservicesnw.com/2011/02/3-techniques-for-estimating-project-cost/</link>
		<comments>http://www.pmservicesnw.com/2011/02/3-techniques-for-estimating-project-cost/#comments</comments>
		<pubDate>Tue, 22 Feb 2011 04:51:27 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[analogous]]></category>
		<category><![CDATA[bottom up]]></category>
		<category><![CDATA[parametric]]></category>
		<category><![CDATA[top down]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=2729</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP Here are 3 techniques for estimating project costs. Top Down Sometimes referred to as analogous estimating Uses the actual cost of a previous and similar project as the basis for the new estimate Requires a good dose of Expert Judgment Bottom Up Estimate each individual work item Add each estimate to get the total estimate Parametric Uses a mathematical model of the project characteristics to estimate the project costs   About the Author: Ray Myers, Jr. is a PMP certified project manager with over 20 years’ experience planning and managing technology projects.  Contact Ray at www.pmservicesnw.com Article source: www.pmservicesnw.com &#169;2012 PMServicesNW. All Rights Reserved..]]></description>
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		<item>
		<title>What Does It Cost to Crash Your Project?</title>
		<link>http://www.pmservicesnw.com/2011/02/what-does-it-cost-to-crash-your-project/</link>
		<comments>http://www.pmservicesnw.com/2011/02/what-does-it-cost-to-crash-your-project/#comments</comments>
		<pubDate>Sun, 20 Feb 2011 05:36:44 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Schedule]]></category>
		<category><![CDATA[Cost to Crash Project]]></category>
		<category><![CDATA[crashing cost]]></category>
		<category><![CDATA[project crashing]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=2768</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP Project managers are under constant pressure to reduce the scheduled time to complete their projects.  It is called crashing the project when you add resources to shorten the project schedule.  Crashing usually requires the expenditure of additional resources which adds cost to the project. Here is how you calculate the cost of crashing your project. Click Image to Enlarge.      About the Author: Ray Myers, Jr. is a PMP certified project manager with over 20 years’ experience planning and managing technology projects.  Contact Ray at www.pmservicesnw.com  Article source: www.pmservicesnw.com &#169;2012 PMServicesNW. All Rights Reserved..]]></description>
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		<slash:comments>0</slash:comments>
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		<item>
		<title>Travel Time and Expenses</title>
		<link>http://www.pmservicesnw.com/2010/12/travel-time-and-expenses/</link>
		<comments>http://www.pmservicesnw.com/2010/12/travel-time-and-expenses/#comments</comments>
		<pubDate>Sat, 01 Jan 2011 06:16:59 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[Profit Calculation]]></category>
		<category><![CDATA[profit margin]]></category>
		<category><![CDATA[Travel Expenses]]></category>
		<category><![CDATA[Travel Time]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=2276</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP Do you plan for travel time and travel expenses when bidding, proposing, or planning projects?  If not, you should and here is why. Let’s say that you are bidding a 4 week project that will that will be accomplished entirely at your customer site in another state.  Your on-site resource will work 40 hours each week and your billing rate is $200 per hour.  Your revenue for this project is: 4 weeks x 40 hours per week x $200 per hour = $32,000.00 You are planning for your on-site resource to fly to the site each Sunday and return home after work on Friday.  Your resource will post 4 hours to the project each Sunday and Friday for travel time. The burdened labor rate for your on-site resource is $80 per hour Your Travel expenses are based on the following assumptions: Airfare:            $400 round trip Hotel:               $120.00 per night or $600 per week Rental Car:       $175 per week Meals:              $50 per day or $250 per week Parking:           $20 per day or $100 per week Using these calculations, your resource will post $1,525 each week to the project for travel expenses or $6,100 total expense [...]]]></description>
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		<title>When to Use ROM Estimates</title>
		<link>http://www.pmservicesnw.com/2010/12/when-to-use-rom-estimates/</link>
		<comments>http://www.pmservicesnw.com/2010/12/when-to-use-rom-estimates/#comments</comments>
		<pubDate>Wed, 29 Dec 2010 01:36:38 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Estimating]]></category>
		<category><![CDATA[estimating]]></category>
		<category><![CDATA[ROM]]></category>
		<category><![CDATA[Rough Order of Magnitude]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=2219</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP ROM estimates are used for strategic decisions, long range planning, or simply to respond to questions such as: How big is the bread box? or, Approximately, just for grins, how much are we talking about? The first step is to determine if a ROM estimate is appropriate.  Review the project charter and scope documents for a description of what needs to be done and complete a preliminary complexity assessment to answer the following questions.  Is the purpose of the estimate for strategic decisions, long range planning, or sizing? Is a less precise estimate acceptable or useful to make a current decision, for example Can we afford something in this cost range? Will an estimate that is + or – 50% be satisfactory at this point in time? Is the estimate needed within less than a week’s notice? Note, the ROM estimating technique should not be used to develop precise or estimates requiring a high level of confidence.  It is usually the first estimate that is developed or requested and will sometimes be needed to complete project initiation processes. &#169;2012 PMServicesNW. All Rights Reserved..]]></description>
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		<slash:comments>1</slash:comments>
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		<item>
		<title>Types of Estimates</title>
		<link>http://www.pmservicesnw.com/2010/12/types-of-estimates/</link>
		<comments>http://www.pmservicesnw.com/2010/12/types-of-estimates/#comments</comments>
		<pubDate>Wed, 29 Dec 2010 01:16:15 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Estimating]]></category>
		<category><![CDATA[Definitive Estimates]]></category>
		<category><![CDATA[Intermediate Estimates]]></category>
		<category><![CDATA[ROM]]></category>
		<category><![CDATA[Rough Order of Magnitude]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=2215</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP There are three types of estimates that may be used for project estimating: Rough-Order-of-Magnitude (ROM) Estimates (-50% to +50%) Budget Estimates (-10% to +25%) Definitive Estimates (-5% to +10%) Some or all of these estimate types may be used on a project. When providing project estimates, be sure to note which of the three types of estimate were used to generate the estimate. &#169;2012 PMServicesNW. All Rights Reserved..]]></description>
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		<title>Parametric Estimating</title>
		<link>http://www.pmservicesnw.com/2010/12/parametric-estimating/</link>
		<comments>http://www.pmservicesnw.com/2010/12/parametric-estimating/#comments</comments>
		<pubDate>Tue, 28 Dec 2010 01:05:10 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Estimating]]></category>
		<category><![CDATA[cost estimating]]></category>
		<category><![CDATA[parametric estimating]]></category>
		<category><![CDATA[Parametric estimating technique]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=2211</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP Parametric Estimating is an estimating technique that uses a statistical relationship between data and other variables to calculate the estimate.  It is simply a mathematical model. The complexity of the model may vary based on the nature of the project or activity to be estimated.  For example, you could use a spreadsheet to create a simple parametric model for the following variables: Number of senior programmers Number of junior programmers Pay rate for senior programmers Pay rate for junior programmers Number of months Number of work hours in a month (160 or 173.33) Prerequisites ROM Parametric estimating spreadsheet Steps Create the estimating spreadsheet Populate the spreadsheet based on project assumptions Revise the assumptions and update the spreadsheet to refine the estimate Document estimates &#169;2012 PMServicesNW. All Rights Reserved..]]></description>
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		<slash:comments>0</slash:comments>
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		<item>
		<title>FFP &#8211; Firm Fixed Price</title>
		<link>http://www.pmservicesnw.com/2010/12/ffp-firm-fixed-price/</link>
		<comments>http://www.pmservicesnw.com/2010/12/ffp-firm-fixed-price/#comments</comments>
		<pubDate>Mon, 13 Dec 2010 03:14:25 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[Cost Reimbursement]]></category>
		<category><![CDATA[FFP]]></category>
		<category><![CDATA[Firm Fixed Price]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=2135</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP  While there are a number of contract types, Firm Fixed Price (FFP) and Cost Reimbursement contracts are the most common.  Procurement specialists and contracting officers typically prefer FFP contract vehicles because this type of contract provides the most cost protection for the buyer. The contractor or seller under fixed price contracts must deliver the product or service for a pre-established fixed price.  This contract type places the maximum risk and the full responsibility for all costs squarely on the seller.  The ability of the seller to make a profit depends on the seller’s ability to control project costs and risks. When quoting Fixed Price, the seller must consider the costs and potential risks for the entire project lifecycle because the seller will not be able to adjust the price due to unforeseen circumstances. Cost Reimbursement contracts on the other hand, provide for payment of allowable costs to the extent agreed to in the contract.  The buyer agrees to pay the project costs and an incentive fee of some sort to the seller.  The seller’s cost responsibility is minimized under cost reimbursement contracts and the buyer assumes greater control over cost management. There are a number [...]]]></description>
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		<slash:comments>1</slash:comments>
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		<item>
		<title>Project Pricing – T&amp;M</title>
		<link>http://www.pmservicesnw.com/2010/09/project-pricing-%e2%80%93-tm/</link>
		<comments>http://www.pmservicesnw.com/2010/09/project-pricing-%e2%80%93-tm/#comments</comments>
		<pubDate>Thu, 30 Sep 2010 04:33:01 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[project pricing]]></category>
		<category><![CDATA[project pricing T&M]]></category>
		<category><![CDATA[T&M]]></category>
		<category><![CDATA[time and materials]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=1826</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP T&#38;M, short for Time and Materials, is a common pricing methodology that is used when the project scope is not clearly defined or when the scope frequently changes.   T&#38;M contracts are ideal for small projects or tasks because the client pays for only the actual hours worked and the materials used on the project.  This arrangement gives the client the greatest leverage for obtaining services at the lowest possible price. T&#38;M pricing is quoted based on an hourly, daily, weekly or monthly rate.  The service provider’s profit is built into the quoted hourly rate and any materials used during the course of the project.  Travel expenses are generally reimbursed at cost.  The client’s cost is determined like this:   (Hours Worked x Hourly Rate) + Materials + Expenses   Advantages to the Client Generally less expensive than fixed price or flat rate pricing Provides greatest flexibility when the project scope is not clearly defined Enables scope changes without the hassle of scope control or change management procedures Provides the most control over the project Easy to terminate or cancel the project Disadvantages to the Client Overall responsibility for the project scope, all project deliverables, [...]]]></description>
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		<slash:comments>1</slash:comments>
		</item>
		<item>
		<title>Project Pricing &#8211; Margin</title>
		<link>http://www.pmservicesnw.com/2010/09/project-pricing-margin/</link>
		<comments>http://www.pmservicesnw.com/2010/09/project-pricing-margin/#comments</comments>
		<pubDate>Sun, 26 Sep 2010 03:52:46 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[profit margin]]></category>
		<category><![CDATA[project pricing]]></category>
		<category><![CDATA[use margin to calculate price]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=1821</guid>
		<description><![CDATA[By Ray Myers, Jr., PMP According to the businessdictionary.com, margin is defined to be: the difference between the cost price and the selling price of a product.  In other words, margin is the profit earned on a business transaction. Margin is usually measured as a percentage of the selling price.  Thus the project manager might say, “We earned 30% margin on this project.”  There are 2 margin calculation formulas that every project manger involved with project pricing should know.   Use Margin to Calculate Sell Price Use this formula to calculate the selling price of a product or service when the cost and desired margin is known.  For the purpose of this example, assume the hourly cost is $100 and you want to calculate a selling price with 30% margin. Sell Price = Cost / (1 – Margin) Sell Price = $100 / (1 &#8211; .30) = $142.85 per hour   Calculate Profit in Terms of Margin Use this formula to determine the profit margin you earned on a project when the project cost and sell price is known.  Assume that your project cost $700 and you sent a $1,000 invoice to your client.  What was your profit margin? Margin [...]]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>Project Pricing &#8211; Markup vs. Margin</title>
		<link>http://www.pmservicesnw.com/2010/09/project-pricing-markup-vs-margin/</link>
		<comments>http://www.pmservicesnw.com/2010/09/project-pricing-markup-vs-margin/#comments</comments>
		<pubDate>Fri, 24 Sep 2010 02:32:28 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[markup vs margin]]></category>
		<category><![CDATA[project margin]]></category>
		<category><![CDATA[project markup]]></category>
		<category><![CDATA[project pricing]]></category>

		<guid isPermaLink="false">http://www.pmservicesnw.com/?p=1735</guid>
		<description><![CDATA[By: Ray Myers, Jr., PMP  Is there a difference?  You bet, and understanding the difference between these confusing terms may impact the profit you make on your project.  Let’s define the terms and do a quick calculation to see the difference between the two pricing concepts. Markup Markup is the difference between the cost of your project and the selling price. Markup is calculated by adding a percentage of the project cost to the project cost to determine the sale price.  Assume an hourly rate of $100 and we use a 25% markup to determine the sale price. Sale Price = hourly rate + (hourly rate * markup %) Sale Price = $100 + ($100 * .25%) = $125 Margin Gross margin is the difference between the cost of your project and the profit. Margin is calculated by dividing the hourly rate by 1 – the desired margin.  Using the previous assumptions in the above example, margin is calculated like this: Sale Price = hourly rate / (1 – margin %) Sale Price = $100 / (1 – 25%) = $133.33  See the difference between the two calculations.  It doesn’t look like much, but using the wrong calculation could significantly [...]]]></description>
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