Cost Estimating

A cost estimate is a prediction of the likely cost of the resources that will be required to complete all of the work of the project.

Cost estimating is done throughout the project. In the beginning of the project proof of concept estimates must be done to allow the project to go on. An ''order of magnitude'' estimate is performed at this stage of the project. Order of magnitude estimates can have an accuracy of –25 percent to +75 percent. As the project progresses, more accurate estimates are required. Budget estimates are those that have an accuracy of –10 percent to +25 percent. Finally, at the time of creating the project cost baseline, the definitive estimate of –5 percent to +10 percent is done. Early in the project there ...

Get Preparing for the Project Management Professional (PMP®) Certification Exam Second Edition now with the O’Reilly learning platform.

O’Reilly members experience live online training, plus books, videos, and digital content from nearly 200 publishers.