Scope

What is 'Scope'

Scope is a project management term for the combined objectives and requirements necessary to complete a project. Properly defining the scope of a project allows a manager to estimate costs and the time required to finish the project.

BREAKING DOWN 'Scope'

Scope can involve a variety of things, depending on the type of project. For example, if the project was to design an airplane, the scope could include the functional requirements of the plane, such as how many passengers it can carry or how fast it should be able to travel.

It is the responsibility of the project manager to ensure that the scope's deadlines are met, allowing for smooth completion of the project. This may be sidetracked by scope creep, which occurs when the project gains additional features or requirements without extending the deadline.

RELATED TERMS
  1. Project Management

    The planning and organization of an organization's resources ...
  2. Project Finance

    Defined by the International Project Finance Association (IPFA) ...
  3. Capital Project

    A long-term investment made in order to build upon, add or improve ...
  4. Completion Bond

    A financial contract that insures a given project will be completed ...
  5. Project Completion Restriction

    A type of clause, seen most often in municipal bond indentures, ...
  6. Initial Cash Flow

    The amount of money paid out or received at the start of a project ...
Related Articles
  1. Executive Compensation

    Project Manager: Job Description & Average Salary

    Discover more about the specific tasks that project managers are responsible for and the average salary that can be expected in such a position.
  2. Professionals

    What Exactly Do Project Managers Do?

    While supervision is one important part of the job, a lot more goes into project management than just watching everyone work.
  3. Professionals

    Project Manager: Career Path & Qualifications

    Learn more about what project managers job, the qualifications necessary for the position and the most common careers for these professionals.
  4. Professionals

    Types of Risk

    CFA Level 1 - Types of Risk. Learn the three types of risk associated with capital budgeting. Covers stand-alone, corporate and market risk.
  5. Professionals

    Capital Budgeting Basics

    CFA Level 1 - Capital Budgeting Basics. Briefly discusses capital budgeting and how it relates to project planning. Covers the classification of projects and importance of budgeting.
  6. Professionals

    Introduction To Project Analysis And Valuation

    Valuation analysis is used to evaluate the potential merits of an investment or to objectively assess the value of a business or asset.
  7. Investing Basics

    Capital Budgeting: The Importance Of Capital Budgeting

    Capital budgeting is a step by step process that businesses use to determine the merits of an investment project. The decision of whether to accept or deny an investment project as part of a ...
  8. Professionals

    Divisional And Project Costs of Capital

    Divisional and project costs of capital allow a firm to use a different cost of capital for company divisions and projects that have different levels of risk.
  9. Investing

    What's a Hurdle Rate?

    Hurdle rate has two meanings. In the business world, a business typically makes a decision on a capital project based on the net present value approach. To determine the net present value, the ...
  10. Professionals

    Capital Budgeting

    Capital budgeting is really important when making important business decisions.
RELATED FAQS
  1. How do you use the profitability index rule when scoping out a project?

    Understand the parameters of the profitability index rule and how this rule is used in corporate capital allocation to determine ... Read Answer >>
  2. How do companies calculate the estimated duration of a new project?

    Learn about some of the common methods used by companies to estimate the duration of a new project, including those with ... Read Answer >>
  3. How valid is the notion of economies of scope?

    Gain an understanding of how economies of scope work, why they appear to be a viable concept and under what circumstances ... Read Answer >>
  4. What are some real-life examples of the economies of scope?

    Read about some real world examples of economies of scope, why it's an important concept and how to distinguish it from economies ... Read Answer >>
  5. Why is a bank guarantee important in a long-term project contract?

    Understand what a bank guarantee is and learn why it is so important to the risk and safety of a long-term project contract Read Answer >>
  6. How much debt is too much when calculating capital budgeting?

    Learn how companies determine how much debt is acceptable when funding a new project by using the net present value to estimate ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center