In economics and business decision-making, a sunk cost is a cost that has already been incurred and cannot be recovered. Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. In other words, a sunk cost is a sum paid in the past that is no longer relevant to decisions about the future. Even though economists argue that sunk costs are no longer relevant to future rational decision-making, people in everyday life often take previous expenditures in situations, such as repairing a car or house, into their future decisions regarding those properties.
Scope creep in project management is continuous or uncontrolled growth in a project's scope, generally experienced after the project begins. This can occur when the scope of a project is not properly defined, documented, or controlled. It is generally considered harmful. It is related to but distinct from feature creep, because feature creep refers to features, and scope creep refers to the whole project.
The planning fallacy is a phenomenon in which predictions about how much time will be needed to complete a future task display an optimism bias and underestimate the time needed. This phenomenon sometimes occurs regardless of the individual's knowledge that past tasks of a similar nature have taken longer to complete than generally planned. The bias affects predictions only about one's own tasks. On the other hand, when outside observers predict task completion times, they tend to exhibit a pessimistic bias, overestimating the time needed. The planning fallacy involves estimates of task completion times more optimistic than those encountered in similar projects in the past.
The Alaskan Way Seawall is a seawall which runs for approximately 7,166 feet (2,184 m) along the Elliott Bay waterfront southwest of downtown Seattle from Bay Street to S. Washington Street. The seawall is being rebuilt in the 2010s as part of a waterfront redevelopment megaproject estimated to cost over $1 billion.
California High-Speed Rail (CAHSR) is a publicly funded high-speed rail system being developed in California by the California High-Speed Rail Authority. Phase 1, about 494 miles (795 km) long, is planned to run from San Francisco to Los Angeles and Anaheim via the Central Valley, and is partially funded and under construction. A proposed Phase 2 would extend the system north to Sacramento and south to San Diego, for a total of 776 miles (1,249 km). The project was authorized by a 2008 statewide ballot to connect the state's major urban areas and reduce intercity travel times. Phase 1 targets a nonstop travel time of 2 hours and 40 minutes from San Francisco to Los Angeles, compared to about nine hours on the existing Amtrak San Joaquins.
Escalation of commitment is a human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision, action, or investment nevertheless continue the behavior instead of altering course. The actor maintains behaviors that are irrational, but align with previous decisions and actions.
Construction management (CM) aims to control the quality of a project's scope, time, and cost to maximize the project owner's satisfaction. It uses project management techniques and software to oversee the planning, design, construction and closeout of a construction project safely, on time, on budget and within specifications.
A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values.
A megaproject is an extremely large-scale construction and investment project. A more general definition is "Megaprojects are temporary endeavours characterised by: large investment commitment, vast complexity, and long-lasting impact on the economy, the environment, and society".
Bent Flyvbjerg is a Danish economic geographer. He was the First BT Professor and Inaugural Chair of Major Programme Management at Oxford University's Saïd Business School and is the Villum Kann Rasmussen Professor and Chair of Major Program Management at the IT University of Copenhagen. He was previously Professor of Planning at Aalborg University, Denmark and Chair of Infrastructure Policy and Planning at Delft University of Technology, The Netherlands. He is a fellow of St Anne's College, Oxford.
A boondoggle is a project that is considered a waste of both time and money, yet is often continued due to extraneous policy or political motivations.
Cost engineering is "the engineering practice devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis". "Cost Engineers budget, plan and monitor investment projects. They seek the optimum balance between cost, quality and time requirements."
When estimating the cost for a project, product or other item or investment, there is always uncertainty as to the precise content of all items in the estimate, how work will be performed, what work conditions will be like when the project is executed and so on. These uncertainties are risks to the project. Some refer to these risks as "known-unknowns" because the estimator is aware of them, and based on past experience, can even estimate their probable costs. The estimated costs of the known-unknowns is referred to by cost estimators as cost contingency.
Reference class forecasting or comparison class forecasting is a method of predicting the future by looking at similar past situations and their outcomes. The theories behind reference class forecasting were developed by Daniel Kahneman and Amos Tversky. The theoretical work helped Kahneman win the Nobel Prize in Economics.
When the actual benefits of a venture are less than the projected or estimated benefits, the result is known as a benefit shortfall.
The Olmsted Locks and Dam is a locks and wicket dam on the Ohio River at river mile 964.4. The project is intended to reduce tow and barge delays by replacing the existing older, and frequently congested, locks and dams Number 52 and Number 53. The locks are located about 17 miles upstream from the confluence of the Ohio and Mississippi rivers at Olmsted, Illinois.
A glossary of terms relating to project management and consulting.
The project management triangle is a model of the constraints of project management. While its origins are unclear, it has been used since at least the 1950s. It contends that:
- The quality of work is constrained by the project's budget, deadlines and scope (features).
- The project manager can trade between constraints.
- Changes in one constraint necessitate changes in others to compensate or quality will suffer.
Megaprojects and Risk: An Anatomy of Ambition is a 2003 book by Bent Flyvbjerg, Nils Bruzelius, and Werner Rothengatter, published by Cambridge University Press. According to chief economist and director of transportation policy at Infrastructure Management Group, Inc., Porter K. Wheeler, "this book makes an important contribution to understanding the infrastructure development process worldwide, with focus on megaprojects." The New Scientist wrote upon publication, "Love them or loathe them, megaprojects capture the imagination. [This] damning analysis concentrates on a series of financial nightmares that should bring even the most casual reader out in a sweat."
