The cost component of a project must be carefully planned and managed throughout the life of a project. First, a budget must be established for the project. The selection of vendors involves a careful process of considering reputation, scope of work to be done, and time required to completion. Risks and uncertainty should be factored in to the plan. As the project progresses costs need to be monitored and controlled.

1. For projects in general, what are some of the considerations that must be factored when preparing a budget? Explain thoroughly.
2. What are some of the risks that must be considered in selecting vendors and dealing with unexpected external events? List several.
3. As the project progresses, what are some of the strategies for reducing unexpected costs?