Project Management

Project Management Central

Please login or join to subscribe to this thread

Topics: Cost Management
When is cost highest in the Project Life Cycle?
When is cost highest in the Project Life Cycle?

A. At initiation
B. During Planning
C. Midway during the Project
D. During closure
Sort By:
Page: 1 2 next>
C. Midway during the Project
Usually, the highest cash flow needed is during execution (midway during the project). however overall by the end of the project you have used the maximum amount.
Highest cost is during execution, so it's C.
C. Midway during the Project
This could be a trick question. Depending on the definition of cost.

Are we talking "monthly outlay"? (typically mid-way)

Or total expended? (typically near the end, but could go down if there is a rebate at the end for exceeding some goal)

And it could be front-loaded, if there is a significant discount on hardware/software purchases, to buy up-front in order to lock in a "year-end" deal with a vendor. Especially if labor costs are minimal for the duration of the project, relative to the hardware/software.
As cost of staffing the highest is at mid of project, but as cost of changes will be the highest at end of the project!!!
Usually your cashflow projection is highest during execution phase.
The cost is highest in the execution stage.
If you are asking this because you are going to take the PMP certification exam then my recommendation is taking a look to the PMBOK mainly chapter 7. This type of considerations have changed mainly when the PMI added what the PMI call agile/adaptative environments.
Total money expended on a project typically follows an "S-curve" shape, with a relatively slow ramp up in the beginning, followed by a steep upward slope, and then a ramping-off toward the end. The period with the high slope is usually around the middle of a project, i.e., during the execution and monitoring & controlling phase(s). But I have known projects that had huge initial cash outlays required at the beginning, and others that had similarly large payments owed at the end. In general and for PMP-type questions, however, the middle Execution phase is when cash outflow is at a max rate.
Page: 1 2 next>  

Please login or join to reply

Content ID:

"Bad artists copy. Good artists steal."

- Pablo Picasso