Chapter 5

Question 1

Learning curves

Answer 1

each time the output quantity doubles, the unit labour hours are reduced at a constant rate; also called the improvement curve, experience curve, and industrial progress curve.

Question 2

Delphi Method

Answer 2

A group decision process about the likelihood that current events will occur

Question 3

Planning Horizon

Answer 3

estimates of current events are closer to 100% accuracy, the further away an event the the less accurate the estimate.

Question 4

Factors influencing Quality of Estimates

Answer 4

1. Planning Horizon
2. Project Complexity
3. People
4. Project Structure and organization
5. Padding Estimates
6. Organization culture
7. Other Factors (Non-project factors can influence time or cost estimates; example: equipment failure. Project priority can influence resource assignment and thus impact time and cost)

Question 5

Tips for Estimating

Answer 5

1. Responsibility (Estimates should be made by those most familiar with the task)
2. use multiple people to estimate
3. assume normal conditions
4. time units (all estimates need to share a consistent time unit- days, hours, shifts)
5. Independence (estimate each task, not a whole section)
6. Contingencies (Work package estimates should not include allowances for contingencies.)
7. Adding risk assessment to the estimate helps to avoid surprises to stakeholders

Question 6

Top-Down Estimates

Answer 6

derived from someone who uses experience or information to determine the project duration and total cost.

sometimes these estimates made by top management who have very little knowledge of the component activities used to complete the project. (sometimes called Parametric)

Question 7

Bottom-Up Estimates

Answer 7

project estimates come from people who have knowledge of the tasks

Question 8

Bottom-Up Estimate Methods

Answer 8

1. Template Methods
2. Parametric Procedures
3. Range Estimating
4. Phase Estimating

Question 9

Phase Estimating

Answer 9

A detailed estimate is developed for the immediate phase and a macro estimate is made for the remaining phases of the project. Once the first phase is coming to a close a detailed estimate of the next phase is developed, and so on until all the phases are complete

Question 10

Range Estimating

Answer 10

Acquire 3 time estimates low, average and high. The low to high provides a range that the average estimate will fall between. Determining the low to high estimates for the activity is influenced by factors such as complexity, technology, newness, familiarity and typically done with a group of people.

Question 11

Parametric Procedures

Answer 11

Same as parametric techniques such as cost per square foot, can be applied to specific tasks. Example: to estimate wallpaper costs, a contractor could guess based on past jobs that it would cost $5 per square yard at the store and $2 per yard to have it installed for a total of $7 per yard needed.

Question 12

Template Methods

Answer 12

If the project is similar to past projects they can be used as a starting point for the new project. Differences in the new project can be noted and past times and costs can be adjusted to accommodate them.

Question 13

Top-Down Estimate Approaches

Answer 13

1. Consensus Methods
2. Ratio Methods
3. Apportion Methods
4. Function Point Methods- for software or system projects

Question 14

Consensus Methods

Answer 14

The uses the pooled experience of senior or middle managers to estimate the total project duration and cost.

Question 15

Ratio Methods

Answer 15

Example: contractors frequently estimate using square feet, 2700 square feet might cost 160 per square foot

Question 16

Apportion Methods

Answer 16

Used when projects closely follow past projects in features and costs. Given good historical data, estimates can be made quickly with little effort and reasonable accuracy.

Question 17

Function Point Methods- for software or system projects

Answer 17

software development projects are frequently estimated using weighted macro variables called “function points” or major parameters such as number of inputs/outputs, number of inquiries, number of data files, and number of interfaces.

Question 18

Direct Costs

Answer 18

This includes labour, materials, equipment, and other costs.

• These are clearly chargeable to a specific work package
• these costs represent real cash outflows and must be paid as a project progresses

Question 19

Direct Project Overhead Costs

Answer 19

Pinpoints which resources of the organization are being used in the project. Direct project overhead costs can be tied to project deliverables or work packages, example: the salary of the project manager
- Not an immediate expense but must be paid in the near future

Question 20

General and Administrative Overhead Costs

Answer 20

These are organizational costs that are not directly linked to a specific project, but these costs are carried for the duration of the project. Examples include organization costs across all products and projects such as advertising accounting and Senior Management above the project level