Estimating cost

Question 1

Name 3 types of top down cost estimates

Answer 1

Analogy, expert opinion and parametric.

Question 2

Name one bottom down cost estimate

Answer 2

Cost engineering

-Detailed breakdown of labour or materials at the work package or task level.

Question 3

Name 7 sources of cost overruns.

Answer 3

1. Uncertainty and lack of information
2. Changes in requirements or design
3. Economic/Social Factors
4. Inefficiency, Poor communication and lack of control
5. Ego of the estimator
6. Project contract
7. Bias and ambition

Question 4

Whats are life cycle costs?

Answer 4

All costs of a system incurred during each phase of the project life cycle from the conception phase to the operations phase

Question 5

What is an estimate?

Answer 5

A realistic assessment based upon facts about the work, required resources, constraints and the
environment, derived from estimating methods.

Question 6

What is the difference between accuracy and precision.

Answer 6

Accuracy is the closeness of the estimated value to the actual value.

Precision is how many decimal places are used in the estimate.

Question 7

Name 4 types of costs

Answer 7

Direct costs
Direct Overhead Costs
General & Admin overhead costs
Profits