PMPCh7.2 - Estimate Costs

Question 1

Question

Answer 1

Question 2

Definition of Estimate Costs

Answer 2

process of developing an approximation of the monetary resources needed to complete project activities

Question 3

Benefit of Estimate Costs

Answer 3

determines the amount of cost required to complete project work

Question 4

What else is included in Estimate Costs

Answer 4

consideration of costing alternatives

Question 5

How are Estimate Costs expressed

Answer 5

currency, hours, days

Question 6

ROM Estimate

Answer 6

-25% - 75%, narrows later to -5%-10%

Question 7

Costs include what?

Answer 7

labor, materials, equipment, services, and facilities, as well as special categories such as an inflation allowance, cost of financing, or contingency costs

Question 8

Costs can be presented in what 2 forms

Answer 8

acitivity level of summary form

Question 9

Insert ITTO 7.2

Answer 9

Insert ITTO

Question 10

Input of Estimate Costs (7):

Answer 10

Input of Estimate Costs (7): Cost Mgmt Plan, HR Mgmt Plan, Scope baseline, Project schedule, Risk Register, EEF, OPA

Question 11

TT of Estimate Costs (10) BATPE, Project Vendors Reserve the Cost of Group Decision Dinner:

Answer 11

Bottom-up Estimating, Analogous Estimating, Three-point estimating, Parametric estimating, Expert Judgement, Project mgmt software, Vendor bid analysis, Reserve Analysis, Cost of quality, Group Decision making techniques

Question 12

Output of Estimate Costs(3) BAP (Batman and project vendors like to eat bimbimbap):

Answer 12

Output of Estimate Costs(3): Basis of cost estimates, Activity Cost estimates, Project doc updates

Question 13

Input of Estimate Costs (7)CHORE SP: Cost Mgmt Plan

Answer 13

defines how project costs will be managed and controlled, level of accuracy

Question 14

Input of Estimate Costs (7)CHORE SP: HR Mgmt Plan

Answer 14

staff attribute, rates, reward

Question 15

Input of Estimate Costs (7)CHORE SP: Scope Baseline

Answer 15

project scope stmt, wbs, wbs dictionary. Project scope stmt: product description, acceptance criteria, key deliverables, project boundaries, assumptions, and constraints about the project. Assumption: direct vs indirect cost, Examples of other constraints are required delivery dates, available skilled resources, and organizational policies. WBS - relationships among all the components of the project and the project deliverables. Dictionary - detailed information about the deliverables and a description of the work for each component in the WBS required to produce each deliverable. Contains contractual and legal implications, such as health, safety, security, performance, environmental, insurance, intellectual property rights, licenses, and permits

Question 16

Input of Estimate Costs (7)CHORE SP: Proj Schedule

Answer 16

determining the availability of staff, the number of staff hours required, and quantities of material and equipment needed to perform schedule activities. It is closely coordinated with cost estimating. Incl Activity duration estimates.

Question 17

Activity Duration Estimates (part of Project Schedule, Input), from Time Mgmt

Answer 17

ex: Union labor with regularly expiring collective bargaining agreements ex: Union labor with regularly expiring collective bargaining agreements

Question 18

Input of Estimate Costs (7)CHORE SP: Risk Register

Answer 18

consider risk response costs Threats/opportunities. Threats = negative risk, increase cost of project

Question 19

Input of Estimate Costs (7)CHORE SP: EEF

Answer 19

Market conditions - what products, services, and results are available in the market, from whom, and under what terms and conditions. Published commercial information - Resource cost rate information is often available from commercial databases that track skills

Question 20

Input of Estimate Costs (7)CHORE SP: OPA

Answer 20

Cost estimating policies,Cost estimating templates,Historical information, andLessons learned.

Question 21

TT of Estimate Costs (10) BATPE: Bottom Up Estimating

Answer 21

a method of estimating a component of work. Detailed cost is then “rolled up” to higher levels for subsequent reporting

Question 22

TT of Estimate Costs (10) BATPE: Analogous Estimating

Answer 22

Use previous, similar projects as the basis for estimating the cost of the current project. Used when limited amount of info about project, relies on expert judgement. Less costly, less time, less accurate. Ensure similar in fact and not appearance.

Question 23

TT of Estimate Costs (10) BATPE: Three point estimating

Answer 23

considering estimation uncertainty and risk and using three estimates to define an approximate range for an activity’s cost: Most likely*4, optomistic, pessimistic….then take average = PERT

Question 24

TT of Estimate Costs (10) BATPE: Parametric estimating (parachute from construction bldg)

Answer 24

statistical relationship between relevant historical data and other variables (e.g., square footage in construction) to calculate a cost estimate for project work. Higher levels of accuracy

Question 25

TT of Estimate Costs (10) BATPEr: Expert Judgement

Answer 25

used to determine whether to combine methods of estimating and how to reconcile differences between them.

Question 26

TT of Estimate Costs (10) Project Vendors Reserve the Cost of Group Decision Dinner: Project Mgmt Software

Answer 26

software applications, computerized spreadsheets, simulation, and statistical tools are used to assist with cost estimating

Question 27

TT of Estimate Costs (10) Project Vendors Reserve the Cost of Group Decision Dinner:Vendor Bid Analysis

Answer 27

based on the responsive bids from qualified vendors, additional cost estimating work may be required of the project team to examine the price of individual deliverables and to derive a cost that supports the final total project cost.

Question 28

TT of Estimate Costs (10) Project Vendors Reserve the Cost of Group Decision Dinner:Reserve Analysis

Answer 28

contingency reserves based on identified risks, rework is unknown and could be risk, can apply to activity or project…should be on cost documentation, part of cost baseline and overall funding requirements for project. Mgmt reserve not in cost baseline but part of overall project budget/funding reqt. When mgmt reserve is actually used, it is added to cost baseline, requiring approved change to cost baseline.

Question 29

TT of Estimate Costs (10) Project Vendors Reserve the Cost of Group Decision Dinner:Cost of Quality (COQ)

Answer 29

Section 8…how much does it cost to ensure quality

Question 30

TT of Estimate Costs (10) Project Vendors Reserve the Cost of Group Decision Dinner:Group Decision-Making Techniques

Answer 30

brainstorming, the Delphi or nominal group techniques…engaging team members to improve estimate accuracy and commitment

Question 31

Output of Estimate Csots (3) BAP: Basis of Estimates

Answer 31

amount and type of additional details supporting the cost estimate. should provide a clear and complete understanding of how the cost estimate was derived. Ex: Documentation of the basis of the estimate (i.e., how it was developed), all assumptions made,any known constraints, range of possible estimates (e.g., 10,000 (±10%) to indicate that the item is expected to cost between a range of values), and Indication of the confidence level of the final estimate.

Question 32

Output of Estimate Csots (3) BAP: Activity Cost Estimates

Answer 32

quantitative assessments of the probable costs required to complete project work in summary form or in detail, for all resources like direct labor, materials, equipment, services, facilities, information technology, and special categories such as cost of financing (including interest charges), an inflation allowance, exchange rates, or a cost contingency reserve. Indirect costs, if they are included in the project estimate, can be included at the activity level or at higher levels.

Question 33

Output of Estimate Csots (3) BAP: Project Doc updates

Answer 33

ie. risk register