Estimating the Price Tag

Abstract

Developing, refining, and updating cost estimates is an iterative and ongoing process throughout the project. The cost management plan includes a description of how costs will be estimated, budgeted, and controlled. It defines the methods and techniques used throughout the project. The project schedule contains the information from the Estimate Activity Resources and Estimate Activity Durations processes. The project schedule - along with the human resource plan, which contains staffing information, such as hourly rates- is two important components in estimating costs accurately. Parametric estimating uses a statistical relationship based on past data to calculate an estimate. Activity cost estimates can be at a high level or a much more detailed level toward the end of the planning phase. Costs may be rolled into resource categories for accounting and reporting purposes. The difference between the cost performance baseline and the project budget is contingency reserves. Controlled Vocabulary Terms cost management; Human resource planning; Project scheduling