Scope, Schedule & Cost Planning
These three knowledge areas form the "iron triangle" of project management — the constraints every PM must balance. Together they produce the three project baselines that define project success and enable performance measurement.
Exam Weight: Planning processes account for roughly 24 of the 49 PMBOK processes and are heavily tested. Earned Value Management (EVM) questions appear on almost every PMP exam — mastering the formulas and their interpretations is non-negotiable.
Three components: Project Scope Statement (what's in and out), WBS (Work Breakdown Structure — decomposed deliverables), and WBS Dictionary (detail for each work package). All three together = scope baseline.
The approved version of the project schedule — derived from the network diagram, CPM analysis, and resource assignments. Float identifies where flexibility exists. The critical path has zero float.
Time-phased approved budget (S-curve). Excludes management reserve. Cost baseline + management reserve = Budget at Completion (BAC). EVM measures performance against the cost baseline.
Scope processes (blue) produce the WBS and scope baseline. Schedule processes (dark blue) produce the network diagram and schedule baseline. Cost processes (navy) produce the cost baseline. All three feed the project management plan.
Scope Management
Scope management defines and controls what is — and is not — included in the project. The WBS is the foundation of all planning: no schedule activity or cost estimate should exist for work outside the WBS.
Product scope: Features and functions of the deliverable (the "what"). Measured against product requirements.
Project scope: The work required to deliver the product (the "how much work"). Measured against the project management plan.
Project Scope Statement includes: project description, deliverables, acceptance criteria, exclusions (explicitly what's out of scope), constraints, and assumptions.
Scope creep: Uncontrolled expansion of scope without adjusting time, cost, or resources. The primary cause is poor requirements definition and missing integrated change control.
Gold plating: Adding features beyond requirements without authorization — also prohibited. The PM must deliver exactly what was agreed, no more, no less.
Requirements Traceability Matrix (RTM): Links each requirement to its source, WBS work package, test case, and final deliverable. Ensures nothing is missed and no unauthorized work is added. Essential input to scope validation.
Scope Validation (Monitoring & Controlling) = customer formally accepts deliverables. Focuses on acceptance.
Quality Control (Monitoring & Controlling) = verify deliverables meet quality requirements. Focuses on correctness.
QC typically happens before scope validation — you confirm it's correct before presenting for acceptance.
The WBS is a hierarchical decomposition of the total project scope into work packages — the lowest level where cost and schedule can be reliably estimated and controlled.
The 100% Rule: The WBS must capture 100% of the project scope — all deliverables, including project management work. Nothing inside the WBS should be outside scope; nothing in scope should be missing from the WBS.
Work package = smallest WBS element; can be scheduled, cost-estimated, monitored, and controlled. Typically 8–80 hours of work (rule of thumb).
WBS Dictionary: Describes each WBS element — scope, deliverables, assumptions, milestones, resources, cost estimate, quality requirements, acceptance criteria.
Decomposition is the technique: break deliverables into smaller components until work packages are reached.
Note: 1.5 Project Management is a WBS element — PM work is in scope and must be included per the 100% rule.
Schedule Management
Schedule management transforms the WBS into a time-phased plan. Critical Path Method (CPM) is the cornerstone technique — identifying the longest path through the network, which determines the minimum project duration.
Lead (negative lag): Allows overlap — successor starts before predecessor finishes. Example: FS with 3-day lead means successor starts 3 days before predecessor finishes. Accelerates schedule.
Lag (positive lag): Adds delay — mandatory wait between activities. Example: concrete must cure for 3 days (FS + 3-day lag) before forming can be removed.
Mandatory vs Discretionary Dependencies: Mandatory = inherent in work (hard logic — can't pour foundation before excavation). Discretionary = best practice / preferred sequence (soft logic — can be changed for schedule compression).
CPM identifies the critical path — the longest sequence of activities that determines the minimum project duration. Activities on the critical path have zero float (slack).
Forward Pass (left → right) calculates Early Start (ES) and Early Finish (EF):
- EF = ES + Duration − 1
- ES of successor = EF of predecessor + 1 (for FS)
Backward Pass (right → left) calculates Late Start (LS) and Late Finish (LF):
- LS = LF − Duration + 1
- LF of predecessor = LS of successor − 1 (for FS)
Float = LS − ES = LF − EF. Float = 0 → critical path activity. Negative float = project is behind.
Free float: Amount an activity can be delayed without delaying the early start of any successor.
Total float: Amount an activity can be delayed without delaying the project end date.
Activity Node Format (PDM):
| Activity Name | |
| ES | EF |
| LS | LF |
| Duration | Float | |
Worked Example: Activity B
Crashing: Add resources to critical path activities to reduce duration. Results in increased cost. Always analyze cost-benefit — crash the activity with the lowest cost-per-day-saved first. Does not increase risk significantly when done correctly.
Formula: Crash Cost per Day = (Crash Cost − Normal Cost) ÷ (Normal Duration − Crash Duration)
Fast Tracking: Perform critical path activities in parallel (overlap) that were originally sequential. Results in increased risk (rework if predecessor output changes) and may require more communication. Does not necessarily increase cost.
Key rule: Both techniques only work on the critical path. Compressing non-critical activities does not shorten the project end date.
| Technique | Method | Cost Impact | Risk Impact | Use When |
|---|---|---|---|---|
| Crashing | Add resources to critical path activities | Increases cost | Low–moderate | Budget available; hard deadline |
| Fast Tracking | Overlap sequential activities | Minimal cost change | Increases risk | No budget; willing to accept rework risk |
| Resource Leveling | Adjust schedule to resolve over-allocation | May increase cost | Low | Resource constraints; may extend schedule |
| Resource Smoothing | Adjust within float to reduce peaks | Neutral | Low | Keep schedule; smooth resource usage |
Cost Management & Earned Value
Cost management establishes the budget baseline and tracks financial performance. Earned Value Management (EVM) is the PMP's unified framework for measuring schedule and cost performance objectively — in dollar terms.
| Technique | Method | Accuracy | Phase |
|---|---|---|---|
| Analogous (Top-Down) | Expert judgment based on similar past projects | −25% to +75% (ROM) | Early / Initiation |
| Parametric | Statistical model (unit cost × quantity); e.g., cost per sq ft, cost per function point | −10% to +25% | Planning |
| Bottom-Up | Estimate each work package individually, roll up to total | −5% to +10% | Detailed Planning |
| Three-Point (PERT) | Expected = (O + 4M + P) ÷ 6 | Varies — accounts for risk | Planning / Risk |
ROM vs Budget vs Definitive: ROM (Rough Order of Magnitude) = −25% to +75%, used in Initiating. Budget estimate = −10% to +25%, used for authorization. Definitive = −5% to +10%, used for contract bidding. Accuracy improves as the project progresses and more information becomes available.
The three inputs (always know these first):
- PV (Planned Value) = BCWS — what was the budgeted cost for work scheduled to be done by now?
- EV (Earned Value) = BCWP — what is the budgeted cost for work actually completed?
- AC (Actual Cost) = ACWP — what did it actually cost to do the completed work?
Interpretation rules (always apply):
- CV positive = under budget; negative = over budget
- SV positive = ahead of schedule; negative = behind
- CPI > 1 = under budget; < 1 = over budget
- SPI > 1 = ahead of schedule; < 1 = behind
EVM Worked Example
| Scenario / Assumption | EAC Formula | When to Use |
|---|---|---|
| Current efficiency (CPI) will continue for remaining work | EAC = BAC ÷ CPI | Most common on PMP exam — "if current trends continue" |
| Remaining work will be done at original planned rate | EAC = AC + (BAC − EV) | Original estimate was flawed but future will be on plan |
| Remaining work completely re-estimated (bottom-up) | EAC = AC + ETC | Significant changes; new detailed estimate prepared |
| Both CPI and SPI will affect remaining work | EAC = AC + [(BAC − EV) ÷ (CPI × SPI)] | Schedule pressure also impacts remaining cost |
ETC = EAC − AC
How much more money is needed to finish the project from this point forward. If EAC = $109,890 and AC = $55,000, then ETC = $54,890.
VAC = BAC − EAC (negative = over budget at completion)
TCPI = (BAC − EV) ÷ (BAC − AC) — efficiency needed on remaining work to finish within BAC. TCPI > 1 means you need to work MORE efficiently than you have been.
Integration & Baselines
The scope, schedule, and cost baselines together form the Performance Measurement Baseline (PMB). Changes to any baseline require formal integrated change control — they cannot be modified unilaterally.
| Baseline | Components | What It Enables | Changed Via |
|---|---|---|---|
| Scope Baseline | Scope statement + WBS + WBS Dictionary | Defines deliverables; basis for scope validation | Change request → CCB approval |
| Schedule Baseline | Approved project schedule (with milestones, critical path) | Measures schedule variance (SV, SPI) | Change request → CCB approval |
| Cost Baseline | Time-phased approved budget (S-curve); excludes management reserve | Measures cost variance (CV, CPI, EAC) | Change request → CCB approval |
| PMB | Scope + Schedule + Cost baselines together | Foundation for all earned value measurement | Formal integrated change control |
Work packages + contingency reserve
Unknown unknowns — PM needs approval to access
Key distinction: Contingency reserve (inside cost baseline) = for identified risks (known unknowns). Management reserve (outside cost baseline) = for unforeseen scope changes (unknown unknowns). PM cannot use management reserve without sponsor approval.
All proposed changes to scope, schedule, or cost baselines must go through the Change Control Board (CCB) via a formal change request process. No PM can unilaterally change a baseline.
Change Request process:
- Change identified (by anyone — team, stakeholder, PM)
- Change request submitted and logged
- Impact analysis performed (scope, schedule, cost, risk, quality)
- CCB reviews and approves / rejects
- If approved: update plans and baselines
- Communicate changes to stakeholders
Exam Tip: When scope creep occurs, the PM should not simply refuse the change. The correct action is to submit a change request and evaluate impact through the formal process.
The cost baseline plotted over time produces an S-curve — slow spending in early stages (planning, design), rapid growth during execution, and tapering at closeout. EVM measures actual spend (AC) and earned value (EV) against this planned S-curve (PV) at any point in time.
| EVM Indicator | Favorable | Unfavorable | Interpretation |
|---|---|---|---|
| CV (Cost Variance) | Positive | Negative | Under / over budget |
| SV (Schedule Variance) | Positive | Negative | Ahead / behind schedule |
| CPI | > 1.0 | < 1.0 | Under / over budget efficiency |
| SPI | > 1.0 | < 1.0 | Ahead / behind schedule efficiency |
| TCPI | ≤ 1.0 | > 1.0 | Need less / more efficiency than current to hit BAC |
| VAC | Positive | Negative | Will finish under / over budget |
Practice Quiz
10 questions covering WBS, critical path, schedule compression, earned value calculations, and cost baselines. Select an answer to reveal the explanation.
Review the explanations above for any missed questions.
Memory Hooks & Advisor
Mnemonics and patterns to lock in EVM formulas, WBS rules, CPM calculations, and schedule compression trade-offs before exam day.
CPI Formula & Meaning
CPI = EV ÷ AC
>1 = under budget · <1 = over budget
EAC when current CPI continues
EAC = BAC ÷ CPI
(Most common PMP exam version)
What is Float (Total Float)?
Float = LS − ES = LF − EF
Time activity can be delayed without delaying project end
WBS 100% Rule
WBS must contain 100% of project scope — nothing missing, nothing outside scope
TCPI Formula
(BAC − EV) ÷ (BAC − AC)
>1 = must be MORE efficient; <1 = on track
Crashing vs Fast Tracking
Crashing: add resources → costs more, lower risk
Fast Tracking: overlap activities → more risk, less cost
Scope Baseline Components
Project Scope Statement + WBS + WBS Dictionary
(NOT the project charter)
Schedule Variance (SV)
SV = EV − PV
Positive = ahead of schedule · Negative = behind
📐 Scope & WBS
- The WBS 100% rule: captures all deliverables including PM work — nothing inside the WBS is out of scope, and nothing in scope is missing from the WBS.
- Scope baseline = Project Scope Statement + WBS + WBS Dictionary. All three together. The project charter is NOT part of the scope baseline.
- Work package = lowest WBS level where cost and schedule can be estimated and controlled. Rule of thumb: 8–80 hours (not a hard rule on the exam).
- Scope creep = uncontrolled scope growth without time/cost/resource adjustment. The correct response is always to submit a change request through integrated change control — not to simply refuse or silently absorb the work.
- Gold plating = team adds unrequested features. Also prohibited — PM must deliver exactly what was agreed, and additional features should go through change control.
- Scope validation (Monitoring & Controlling) = customer formally accepts deliverables. Quality control verifies correctness. QC happens first, then scope validation. Scope validation produces accepted deliverables; QC produces verified deliverables.
📅 Critical Path & Float
- Critical path = longest duration path through the network = minimum project duration. Activities on the critical path have zero float.
- Float (total float) = LS − ES = LF − EF. Amount of time an activity can slip without delaying the project end date.
- Free float = amount an activity can slip without affecting the early start of its immediate successor (can be less than or equal to total float).
- Negative float = project is behind. If a deadline is imposed that is earlier than the calculated project end, all activities on the critical path have negative float.
- Forward pass: ES of first activity = 1 (or 0, depending on convention). EF = ES + Duration − 1. Next activity ES = previous EF + 1.
- Crashing targets critical path activities only — specifically those with the lowest crash cost per day saved. Fast tracking only works on activities that have discretionary (soft) dependencies that can be overlapped.
📊 EVM Formulas
- Three inputs first, always: PV (planned value), EV (earned value), AC (actual cost). EV = % complete × BAC.
- CV = EV − AC (positive = under budget). SV = EV − PV (positive = ahead of schedule).
- CPI = EV ÷ AC (>1 = under budget). SPI = EV ÷ PV (>1 = ahead of schedule).
- EAC variants: BAC ÷ CPI (current trend continues — most tested). AC + (BAC − EV) (remaining at planned rate). AC + ETC (bottom-up re-estimate). AC + [(BAC−EV)÷(CPI×SPI)] (both cost and schedule affect forecast).
- ETC = EAC − AC (how much more money needed from today). VAC = BAC − EAC (negative = will finish over budget).
- TCPI = (BAC − EV) ÷ (BAC − AC). Greater than 1 = must be MORE efficient going forward. A TCPI significantly above current CPI indicates the BAC is unachievable — escalate to management.
💰 Cost Estimating
- Analogous (top-down): Uses expert judgment + historical data from similar projects. Fastest, least accurate. Range: −25% to +75%. Used in early planning / initiation.
- Parametric: Statistical model — unit cost × quantity. Accuracy depends on model quality. Range: −10% to +25%. More reliable when the relationship is well-calibrated.
- Bottom-up: Estimate each work package individually, roll up. Most accurate, most time-consuming. Range: −5% to +10%. Used in detailed planning.
- Three-point (PERT): Expected = (Optimistic + 4×Most Likely + Pessimistic) ÷ 6. Accounts for uncertainty. Standard deviation = (P − O) ÷ 6.
- Reserve analysis: contingency reserve covers identified risks (known unknowns) and is inside the cost baseline. Management reserve covers unidentified risks (unknown unknowns) and is outside the baseline but inside BAC.
- ROM (Rough Order of Magnitude) is NOT a formal estimate type — it's a ballpark figure used before detailed planning begins, typically in the project charter.
🔗 Baselines & Change Control
- Three baselines: scope baseline (scope statement + WBS + WBS dictionary), schedule baseline (approved schedule), cost baseline (time-phased approved budget, excluding management reserve).
- Cost baseline + management reserve = Budget at Completion (BAC). EVM measures against the cost baseline, not BAC.
- No PM can unilaterally change a baseline. All changes go through integrated change control → Change Control Board (CCB) → approved change requests → updated baselines.
- Contingency reserve is INSIDE the cost baseline — PM can access it for identified risks without sponsor approval. Management reserve is OUTSIDE the cost baseline — requires sponsor/sponsor approval to access.
- The Performance Measurement Baseline (PMB) = scope + schedule + cost baselines together. This is what EVM measures against.
- When a stakeholder requests scope change mid-project, the correct action is: evaluate impact, submit a formal change request, present impact to CCB, update baselines if approved — never absorb scope changes informally.