Project Management: Cost vs. Price

Abstract

Associated to every project, however small it may be, there are always costs associated when trying to manage the project and a price for which we want to sell it. This article will present a review of how cost and price can be related to project management, what is the importance of each one separately and the importance of a good relationship between these two factors. A good harmony between them might be a key of the project success and at the same time the cause for unsucess. Therefore, in this article there will be a reflection about how cost and price relationship can be interpreted and support a good decision making. Decisions factors and decisions methods that a company needs to take into account when pricing a project or select which costs are avoidable and which ones are necessary, will also be explained along the article. The project's quality and profit are also two terms directly connected to the relationship between cost and price of every project, the way the customers evaluate a project's value from its price and the costs that are necessary to incur to sustain a certain quality of the outcome are also relations that will be further discussed here.

Big Idea

Cost definition

By definition cost is the amount of money that is spent in acquiring any good or paying for a service. There are a lot of types of costs, ..., investments,

Price definition