Final answer:
A cost baseline is a crucial tool in project management that offers a time-phased budget to help manage and compare costs over the life of a project.
Step-by-step explanation:
A cost baseline is a time-phased budget that project managers use to monitor cost performance. It serves as a reference point for measuring the financial performance of a project. Throughout the project's lifecycle, mathematical models may be employed to estimate costs, providing a vital math connection.
When making estimates, costs associated with materials, fabrication or manufacturing, operation, and maintenance must be normalized, which ensures an equitable comparison among different solutions in the engineering design process. When creating a budget for product development, it's important to calculate the total cost over the periods of interest to ensure efficient financial planning and management.