Chapter Name: Estimate costs
Description:Learners will explore techniques such as analogous, parametric, and bottom-up estimating to forecast the costs for project activities, resources, and contingencies. This helps develop a more accurate budget.
Purpuse:To generate reliable cost forecasts to plan for financial needs across the project lifecycle.
Rational:Accurate cost estimation is essential for creating a feasible budget and for avoiding financial surprises during project execution.
Chapters Topics
Project cost estimation concepts and flow of data
Project Cost Estimation Concepts and Flow of Data: This process involves developing an approximation of the costs required to complete the project work. The flow of data includes inputs like the cost management plan and project schedule, tools such as expert judgment and parametric estimating, and outputs like activity cost estimates and basis of estimates.
The importance and benefits of cost estimation
The Importance and Benefits of Cost Estimation: Accurate cost estimation ensures that the project is adequately funded, resources are allocated efficiently, and the project is completed within its budget. It helps stakeholders understand the financial requirements and manage resources effectively throughout the project.
Input documents to estimate the project cost (Cost Management Plan, Human Resource Management Plan, Scope Baseline [Project Scope Statement, Work Breakdown Structure, WBS Dictionary], Project Schedule, Risk Register, Enterprise Environmental Factors, Organisational Process Assets)
Input Documents to Estimate the Project Cost: Key inputs include the Cost Management Plan, Human Resource Management Plan, Scope Baseline (which includes the Project Scope Statement, Work Breakdown Structure, and WBS Dictionary), Project Schedule, Risk Register, Enterprise Environmental Factors, and Organizational Process Assets. These documents provide the foundation for estimating the project’s costs.
Cost estimation tools and techniques (Expert judgement, Parametric estimating, Bottom-up estimating, Three point estimating, Reserve analysis, Cost of quality, Project management software, Vendor bid analysis, Group decision-making)
Cost Estimation Tools and Techniques: Tools and techniques include expert judgment, parametric estimating, bottom-up estimating, three-point estimating, reserve analysis, cost of quality, project management software, vendor bid analysis, and group decision-making. These methods help produce more reliable and accurate cost estimates for the project.
Cost estimation reports and outputs (Activity Cost Estimates, Basis of Estimates [Basis of estimates, Assumptions, Know constraints, Range of estimates, Confidence level)
Cost Estimation Reports and Outputs: Outputs of cost estimation include Activity Cost Estimates, which provide the expected costs for each activity, and the Basis of Estimates, which includes assumptions, constraints, and the range of estimates. These reports offer transparency and justification for the cost estimates provided.