Cost Baseline
DE: Kostenbaseline
The approved time-phased project budget excluding management reserves.
Detailed Explanation
The cost baseline is the approved time-phased budget representing the authorized spending plan. It is established by summing work package estimates and contingency reserves, typically displayed as an S-curve.
In EVM, the cost baseline provides the Planned Value (PV) against which Earned Value and Actual Cost are compared. Changes require formal change control approval.
The project budget equals cost baseline plus management reserves. Without baseline discipline, performance measurement becomes meaningless.
Key Points
- Approved, time-phased spending plan
- Excludes management reserves, includes contingency
- Typically an S-curve of cumulative expenditure
- Provides Planned Value for EVM
- Changes require formal approval
- Project budget = cost baseline + management reserves
Practical Example
A 12-month project has a EUR 1.2M cost baseline: EUR 50K in month 1, ramping to EUR 150K/month during peak (months 4-9), tapering to EUR 40K in month 12. At month 6, actual spend of EUR 680K vs. planned EUR 620K reveals a EUR 60K unfavorable variance.
Tips for Learning and Applying
Build bottom-up from work package estimates
Display as a time-phased S-curve, not just a total
Integrate with EVM from day one
Keep contingency reserves visible but separate
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