AACE CCP flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Class 5 estimate

AACE estimate class with 0% to 2% project definition, prepared for concept screening; expected accuracy is roughly -20% to -50% on the low side and +30% to +100% on the high side.

PERT expected duration

The three-point weighted average (O + 4M + P) / 6, where O is optimistic, M is most likely, and P is pessimistic; it approximates the mean of an activity duration distribution.

Learning curve formula

Y = aX^b, where Y is unit cost or hours, a is first-unit value, X is cumulative units, and b = log(learning rate)/log 2; an 80% curve gives b approximately -0.322.

Cost-capacity factor

C2 = C1 × (Q2/Q1)^n, used to scale plant or facility cost from a known capacity Q1 and cost C1 to a new capacity Q2 using exponent n.

Contingency versus escalation

Contingency covers known-unknown scope and estimating uncertainty within project scope; escalation covers anticipated price changes over time; management reserve covers unknown-unknowns outside the approved baseline.

Bottom-up estimating

An estimating method that builds total project cost from detailed work-package or activity-level estimates; it is usually more accurate but requires greater definition and effort than parametric or analogy methods.

Factored estimating

A capacity or ratio method that derives costs of supporting systems by multiplying the cost of major equipment by published or historical factors; accuracy depends on similarity of the reference project.

Critical path

The longest continuous path through a schedule network; it determines the shortest possible project duration, and its activities have zero total float when no constraints alter the calculation.

Total float

The amount of time an activity can be delayed without delaying the project finish date; it equals late start minus early start, or late finish minus early finish.

Free float

The time an activity can slip without delaying the early start of any successor; it equals the minimum successor early start minus the activity's early finish.

Resource leveling

A scheduling technique that adjusts activity start and finish dates, sometimes extending project duration, to resolve resource over-allocation or demand above available limits.

Cost slope for crashing

Cost slope = (crash cost - normal cost) / (normal duration - crash duration); it identifies the additional cost per unit of time saved by compressing an activity.

Finish-to-start relationship

A precedence relationship in which a successor activity cannot start until its predecessor finishes; it is the most common logical link in CPM schedules and may include a lag.

Schedule baseline

The approved version of the project schedule used to compare actual progress and performance; changes to it require formal integrated change control approval.

Earned value (EV)

The budgeted cost of work performed, also called BCWP; it quantifies completed work in the project's authorized budget currency and is a core input to cost and schedule performance indices.

Cost variance (CV)

CV = EV - AC; a positive value indicates work is under budget, while a negative value indicates work is over budget relative to the budgeted cost of completed work.

Cost performance index

CPI = EV / AC; values above 1.0 indicate favorable cost efficiency, values below 1.0 indicate unfavorable cost performance, and the index is used to forecast final cost.

Schedule performance index

SPI = EV / PV; values above 1.0 indicate ahead of schedule in earned-value terms, and values below 1.0 indicate behind schedule; it compares earned value with planned value.

Estimate at completion

EAC = AC + ETC; a common forecast is EAC = AC + (BAC - EV) / CPI, assuming remaining work continues at the current cost performance index.

To-complete performance index

TCPI = (BAC - EV) / (BAC - AC) when targeting the budget, or (EAC - EV) / (EAC - AC) when targeting a revised estimate; values above 1.0 require improved efficiency.

Earned schedule

A time-based extension of earned value that converts EV into the date or duration of corresponding planned work; SPI(t) = ES / actual time, and IEAC(t) = planned duration / SPI(t).

Project triple constraint

The interdependent objectives of scope, time, and cost, often with quality, that define project performance; changing one generally requires adjustment to at least one other.

RACI matrix

A responsibility assignment tool that labels stakeholders as Responsible, Accountable, Consulted, or Informed for tasks; each activity should have one accountable owner.

Expected monetary value

EMV = probability × impact for a risk event; it supports quantitative risk analysis by expressing uncertain outcomes in monetary terms and summing across the risk register.

Communication channels

The number of communication paths among n stakeholders is n(n - 1) / 2; adding stakeholders increases channel count rapidly and raises project communication complexity.

Projectized organization

An organizational structure in which project teams report primarily to project managers, who have high authority over resources and priorities; staff often move between projects after completion.

Integrated change control

A process for reviewing, approving, rejecting, and documenting changes to project baselines and deliverables, ensuring impacts on scope, schedule, cost, quality, and risk are assessed.

Net present value

NPV = sum of future cash flows discounted at a required rate minus initial investment; a positive NPV indicates the project is expected to add value at that discount rate.

Internal rate of return

The discount rate at which a project's NPV equals zero; a project is generally acceptable when its IRR exceeds the organization's required rate of return or hurdle rate.

Break-even quantity

Break-even quantity = fixed costs / (unit price - variable cost per unit); it is the sales volume at which total revenue equals total cost and profit is zero.

Straight-line depreciation

Annual depreciation = (asset cost - salvage value) / useful life; it allocates an equal depreciation expense to each year of the asset's service life.

Benefit-cost ratio

BCR = present value of benefits / present value of costs; a ratio greater than 1.0 indicates that discounted benefits exceed discounted costs for the evaluated alternative.