Chapter 8: Estimating and Balacing Cost-Time-Quality Trade-off

Question 1

What is estimating?

Answer 1

• Estimating is forecasting the future, predicting time and money necessary to produce the result.
• Forecasting future is an uncertain business, but accurate estimating is crucial.
• Need to be able to predict the future in an uncertain world.
• The more unique the project, more unpredictable the factors are and more difficult to estimate
• Accurate estimates are not optimistic projections of the best possible performance.

Question 2

What are the factors affecting estimates?

Answer 2

1. Uniqueness of the project
2. Skills and knowledge of the project team
3. Productivity of the project team
4. Reliability of the new technology
5. Learning curve of them team
6. Timing of activities and resource requirements

Question 3

What are the mistakes to avoid in estimating?

Answer 3

1. Making ballparks or guess work about estimates.
2. Estimating without complete specifications or details
3. Confusing estimates with a bid.
4. Padding or inflating your estimates.

Question 4

What are the golden rules to follow when estimating?

Answer 4

1. Have the right people make the estimates.
   - experienced estimators
   - involve people performing the work
   - understand goals and techniques of estimating
2. Base estimates on experience
3. Negotiate the cost-time-quality equilibrium, not the estimates

Question 5

What are the three levels of accuracy?

Answer 5

1. Ballpark or idea evaluation estimates- for initial idea evaluation, not accurate, takes least time and effort.
2. Order of magnitude or project selection estimates - more detailed than ballpark
3. Detailed estimates - based on all steps in project planning, used to manage project and evaluate success, referred to as bottom-up estimates

Question 6

What are the estimating techniques from least accurate to most accurate?

Answer 6

1. Phased estimating
2. Apportioning or top-down estimating
3. Parametric estimating
4. Bottom-up estimating

Question 7

Explain phased estimating.

Answer 7

• Impractical to demand a complete estimate at the beginning of product life cycle
• Entire product life cycle is broken down into major phases and each phase is considered a project
- The first phase is initiated with order-of-magnitude estimate for full development life cycle + detailed estimate for the first phase
- End of first phase, start new cycle (new order-of-magnitude estimate + detailed estimate for the second phase)

Question 8

Explain Apportioning

Answer 8

• Also called as top-down estimates which begins with total project estimate
• Total project estimate is then apportioned to each phase or tasks within the project
• WBS provides framework for top down estimating
• Not very accurate compared to bottom up
• Valuable technique when used in conjunction with phase estimating

Question 9

Explain Parametric Estimating.

Answer 9

• Basic unit of work acts as a multiplier to size the entire project
• A solid parametric formula that is developed from historic data is used
• Parametric model can be applied at project level and task level but more accurate at lower level
• Detailed specification are necessary for developing parametric formula
• More appropriate for construction phase of product life cycle

Question 10

Explain Bottom-up estimating

Answer 10

• Requires the most effort and is most accurate
• All detailed tasks are first estimated then added up to get estimate of next higher level and continues until project estimate is reached
• It is impractical to have complete details at the start of the project
• Hence, bottom up estimating works only to build the detailed phase estimates or for estimating “realistic time horizons”