 Hi, I'm Rui Rizzo and in this video, we will talk about cost planning. Just to remember a few things from the previous videos. Everything starts with the scope planning and the deliverable of WBS, where all the scope of the project is structured and we will start with the work packages to build the estimation of effort and duration of the project. Only after the effort and duration of the project we can across the cost of the project. Just to remember, effort is the time that you will spend to do a task and duration is in calendar months. If you take two hours to do a task and you just have one hour per week, then your effort will be two hours, but your duration will be two weeks. Okay, cost is calculated from the effort, not from duration. From the duration, we calculate the critical path and the duration of the project. So we sequence the work packages and we estimate the effort after the effort. We estimate the duration using the time available for the resources and then we get to the duration of the project by calculating the critical path. So after the duration estimation and the effort estimation, then we can get to the cost. Cost comes from the effort and we can calculate the cost based on two main issues. One is human resources, profiles needed in what quantified for each activity and material resources. How many servers do we need, laptops, software packages, networks, rental of computing power, hardware and software leasing, trips to meetings or testing, telecommunications, training costs, office space and so on and so on and so on. To estimate the cost, we start from the each work package and in which work package, we have a profile associated, a human resources profile associated to perform that work package. Okay, and using that profile, we need to get an estimation of the cost of the profile. Imagine that we have a junior programmer for a certain work package and that work package has an effort of 10 hours. So to know the human resources cost of that work package, we must multiply the cost of the profile per the efforts. And then we'll do it all over all the other tasks and we get human resources cost of the project. Regarding material resources, we apply the same idea for each work package, we identify the costs of each resource that we need to perform that work package. So we multiply the cost of the resource plus the effort, and then we sum for all the work package and we get the material resource. Of course, imagine that you need a computer or a cloud computer for all over the project, you will not calculate it. It's not a work package, but you will calculate it all over the project to assign that computer or that cloud computing or whatever you need. Okay, that is all over the project. Of course, after calculating the human resources and the material resources for all the work packages, you should take into account the operational costs. We have secondary activities that support the main activity of the project, like water electricity, whatever space, paper printing to be done in this case is to calculate all the operational costs all over one year, and to assign a percentage of those operational costs to each project. There are other ways to do this, this is the most simple way. Of course, you could use other technique that would be activity based costs for each activity you could assign those secondary costs, but that will take much more effort and much more time. For this cost planning, we will not take into consideration other things like taxes, operationalization, and amortizations, and other stuff that is for more the finance analytical part of the project. We will just take the project management issue and this to calculate the direct and indirect costs of the project. I hope it will be useful and we will keep you in touch for the next videos.