5th week / estimating cost

Question 1

Factors influencing the quality of estimates

Answer 1

95 % probability meeting time and cost

past experience is a good starting point to for developing time and cost estimates

Factors related with the uniqueness of the project
Project, people, and external factors

PLANNING HORIZON
Quality depends on

PROJECT DURATION
long-duration increase uncertainty of estimates

PEOPLE
People skills
whether people have worked before already influences the time to become effective team

PROJECT STRUCTURE AND ORGANIZATION

PADDING STIMATES
increase probability and reduce risk

ORGANIZATION CULTURE

OTHER FACTORS

Question 2

Estimating guidelines for time and costs and resources

Answer 2

7 guidelines to develop useful work packages estimates

1. Responsibility
   Draw on Most familiar with the task
   Build communication channels earlier
2. use several people to estimate
3. Normal conditions
   should be based on normal conditions, efficient
   methods, and normal level of resources
4. Time units
   All time estimates need consistent time units
   calendar
   days, workdays, workweeks, person days, single
   shift, hours, minutes, etc.

5.Independence
Estimators should treat each task as independent of other task in the WBS

6. Contingencies
   Work package should not include allowances for
   contingencies
7. Adding risk assesment to the estimate helps to avoid surprises to stakeholders

Question 3

Top Down vs Bottom up estimating

Answer 3

Top down estimates
derived from someone whose uses expertise to determine project duration and total cost

Bottom up approach
Work package level
Rolling up the work packages
later///time phased networks

Question 4

methods for estimating Project time and cost

Answer 4

Top-down approaches for estimating project time and cost

1. Consensus method
   director experience.. Delphi method
2. Ratio methods
   i.e contactor square feet to stimate cost and time
   build a house
3. Apportion methods
   extension ratio..
4. Function Point methods for software and simple
   Projects
5. Learning curves
   Each time the output quantity doubles, the unit labour hours are reduced at a constant rate

Question 5

methods for estimating Project time and cost

Answer 5

Bottom-up approaches or estimating project time and cost

1. Template methods
   Use other past projects
2. Parametric procedures applied to specific task
3. Range estimation
   using a person most familiar with the package is the
   best approach
4. Hybrid Phase estimation

Question 6

Type of costs

Answer 6

Direct cost

• labour
• material
• Equipment
• Other

Direct Project Overhead costs
Advertising, accounting, senior manager above the prject

General and administrative overhead costs

Question 7

Refining estimates

Answer 7

interaction costs are hidden in estimates

Normal conditions do not apply

Things go wrong in projects

Changes in project scope and plans