estimating the project cost can be a scaring exercise for many managers. there are a lot of uncertainties associated with the project in terms of schedule, scope, and resources. you can also take their advice on various tools and techniques that can be used to estimate similar kind of project. the technique is less costly and less time-consuming. it can be applied to the whole project or some part of the project in combination with other techniques.
this is one of the most accurate techniques to estimate the cost of the project. the accuracy of this estimation technique is high as you are doing the estimation from granular level to deal with uncertainties and risk, you need to take the help of three-point estimation which is also referred as pert- program evaluation and review technique. that is the part of the cost baseline to mitigate the identified and accepted risks. there are some tools which can be used to perform the project cost estimation, such as cost estimating software application, spreadsheets, simulation and statistical tools. this is another technique to estimate the cost by comparing the various bids proposed by the vendors. depending upon the nature of your project, either you can apply these techniques together or in combinations of few techniques to estimate the project cost.
project cost estimating scares a lot of people. some of the factors that contribute to this uncertainty include… fortunately, there are some tools and techniques used by professional project managers that you can use to develop more accurate cost estimates… expert judgment uses the experience and knowledge of experts to estimate the cost of the project. this technique can take into account unique factors specific to the project. analogous estimating uses historical data from similar projects as a basis for the cost estimate. this type of estimate is usually used in the early phases of a project and is less accurate than other methods. it uses historical data of key cost drivers to calculate an estimate for different parameters such as cost and duration. bottom-up estimating uses the estimates of individual work packages which are then summarized or “rolled up” to determine an overall cost estimate for the project.
this method uses three estimates to define an approximate range for an activities cost: most likely (cm), optimistic (co), and pessimistic (cp). this funding is used to account for cost uncertainty. cost of quality (coq) includes money spent during the project to avoid failures and money spent during and after the project due to failures. this type of software is especially useful for looking at cost estimation alternatives. project cost management is one of the most important aspects of project management that you need to master. learn about project cost estimating, budgeting and control. this is where you can download my “become a project manager checklist” and other project management templates.
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