Introduction |
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| Cost estimating involves developing
an approximation (estimate) of the costs of the resources
needed to complete project activities. Considerations in cost estimating:
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7.2.1 Inputs |
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The WBS will be used to organize the cost estimates and to ensure that all identified work has been estimated.
Refer to resource requirements.
The individual or group preparing the estimates must know the unit rates for each resource in order to calculate project costs. If actual rates are not known the rates themselves need to estimated.
Activity duration estimates will affect cost estimates on any project where the project budget includes an allowance for the cost of financing.
Refer to historical information under activity duration estimating.
Refer to analogous estimating.
This involves using project characteristics in a mathematical model to predict project costs. Examples are cost per square foot to build a house and software development cost models.
The reliability depends on:
This technique involves estimating the cost of individual work items then summarizing or rolling up the individual estimates to get a project total.
Project management software and spreadsheets are widely used.
Cost estimates are quantitative estimates of the likely costs of resources required to complete project activities.
This should include:
This describes how cost variations will be managed.