Project Estimating Paper

689 Words3 Pages
Project Estimating
Project Estimating and Control Techniques
July 12, 2014

Project Estimating
Cost management planning happens early on in the project planning phase and should be refined throughout the project’s life cycle as additional details become available. The project’s cost management plan sets the framework for all of the project’s cost management processes. The accuracy of estimating a project’s cost is essential to the successful or failure of the project. This makes choosing the right estimating techniques crucial for a project. Expert judgment provides an insight to past experiences, environments, and historical information from past similar projects. This information is compared and analyzed against
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Bottom-up estimating can be used when individual work packages or activity segments of the project need to be estimated. Bottom-up estimating takes the detailed costs and then rolls those cost details up to a higher level activity segment or work package (Project Management Institute, 2008). An example of this would be estimating all the resources and facility costs and rolling the information up into the overall project estimate.
Three-point estimating takes a single-point activity and use probability distribution to approximate what can happen in the future. This technique takes uncertainties and risks into consideration and is considered a more accurate technique as the three points clarify and determine the risk level or range of uncertainty for the cost estimate (Project Management Institute, 2008).
Determining the most appropriate estimating technique for the project is important. Choosing the right technique depends on the amount of information you have from past similar projects, and the information you have regarding the current project, such as scope baseline, project schedule, human resource plan, risk register, enterprise environmental factors, and organizational process assets (Project Management Institute, 2008). It is also important to know how much time and money the
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