ABSTRACT
This chapter focuses on the subject of cost management by describing techniques that can evaluate performance against budgets, analyse trends and attempts to a prediction of the total final project costs. It describes the tools, which are essential ingredients of an effective system for cost control because they aim to provide management information. Earned value analysis can be regarded as the missing link between cost reporting and cost control. Steps must be taken to ensure that the collection of cost data from production aligns with the project work breakdown. The actual costs can be plotted as a graph on the same axes as the graph of budgeted costs. Milestone analysis is one of the simpler methods which managers can use throughout the project life cycle to compare the actual costs and progress experienced with the costs and progress planned. Ideally, milestones should coincide with the completion of packages from the work breakdown structure.
