L4 Flashcards
What are the steps in project management?
- Obtain project scope (goal, objective…)
- Leads to an activity list (+precedence relations, durations…)
- Leads to work breakdown structure (responsibilities, resources, cost, quantities…)
How to come up with activity time and cost estimates?
- use analogies - similar projects/activities.
- experience - hire a consultant, Delphi technique
- parametric estimation
- three points estimation
What’s the Delphi technique?
Get a group of experts and ask them for the major activities and they give you estimates for time/cost.
What is parametric estimation?
Analogy + maths!
Look at past projects and why some cost more than others.
Use regression to make estimates
When can we not use parametric estimation?
When it’s a first-timer project! No prior knowledge or data available.
Downsides of parametric estimation?
The environment might have changed, eg Brexit has changed estimates.
The nature doesn’t have to be linear, there might be economies of scale to be found.
What is three points estimation?
AKA PERT
Program Evolution and Review Technique
- come up with optimistic/pessimistic/most likely estimates
- combine these numbers into an average estimate
Average time equation for PERT?
(To + 4Tm + Tp) / 6
Variance equation for PERT?
( (Tp - To) / 6 ) ^2
Standard deviation equation for PERT?
(Tp - To) / 6
Features of the analogous estimation method?
- fastest
- least accurate
- use when we have limited information
Features of parametric estimation method?
- more accurate than analogous
- uses statistics
Features of three-point estimation method? AKA PERT
- reduces bias, risk, uncertainty
- possibly more accurate than the others
- Monte Carlo simulation
What time estimate should you tell the customer/client?
Go half way between the average and worst estimates, and you’ll be 90% safe.
If it’s really crucial not to be late, go with the worst case.
What is needed to estimate activity durations?
Resource calendars:
- resource = human vs non-human
- calendar = availability dates
Organisational asset evaluation:
- quality, skill level, work ethics
Enterprise/project environmental factors:
- where? Season? PESTEL/MODeST
How to estimate activity cost?
- analogous estimating
- rules of thumb (parametric estimating)
- three point estimates
What are the 3 costs?
Direct
Indirect
Below the line
What are direct costs?
Directly related to the project:
- salaries
- materials, machinery
- third-party services, consultants, lawyers
- others, travel
What are indirect costs?
- overhead costs, general management, office space
- often percentage of direct costs
What are below the line costs and what are they a percentage of?
- contingency
- profit mark-up
- percentage of total
What is a common mistake in estimating project costs?
Not including indirect costs and profit margin.
How can we improve estimating costs?
- get inputs from many areas
- hire professional cost estimators
- primarily estimate direct costs
What are the types of budgeting?
Top down
Bottom up
Negotiated
What happens in reality when making a budget?
- iterative negotiation
- combination of top-down, bottom-up
- both are prepared, differences negotiated
