ABSTRACT
This chapter contains a detailed analysis of the two elements of any cost, defines perception of cost and price for buyers and sellers, and compares value against cost and price. It also presents how the elements of a cost can be used for both cost and time planning and control. Cost is defined as a rate, as a function of two elements. The incompleteness of defining cost as only a dollar amount and how that incompleteness impacts managing activity cost is discussed. How elements of a cost can be used for cost, time, and resource planning for an activity is presented. Unit price/cost and the output rates and resource hours required to deliver a specific amount of work are introduced. Cost, price, and value perceptions from a buyer/user and seller/producer are covered. The concept of value as a fourth project constraint is discussed and why qualitative deliverables such as value are excluded from this book is explained. Value priorities of stakeholders and key project participants, and challenges of setting value as a measure of project success are presented. Considerations for setting qualitative goals for projects are offered.
