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This chapter is from the book

This chapter is from the book

Critical Cost Estimating Factors

The cost estimating process associates an expected cost of performing work to each activity. Cost estimates can include labor, materials, equipment, and any other direct costs for project activities. Based on the activity resource and duration estimates, the cost estimates express the cost, normally in monetary amounts, of completing the work of the project. As with all project documents, the cost estimates can change throughout the project as conditions change. Different events can cause the cost for any activity to go up or down and require the cost estimates for the project to change. Table 3.11 shows the inputs, tools, techniques, and outputs for the cost estimating process.

Table 3.11 Cost Estimating Inputs, Tools, Techniques, and Outputs

Inputs

Tools and Techniques

Outputs

Enterprise environmental factors

Analogous estimating

Activity cost estimates

Organizational process assets

Determine resource cost rates

Activity cost estimates supporting detail

Project scope statement

Bottom-up estimating

Requested changes

Work breakdown structure

Parametric estimating

Cost management plan (updates)

WBS dictionary

Project management software

 

Project management plan

Vendor bid analysis

 

 

Reserve analysis

 

 

Cost of quality

 


Cost estimates are compiled into the project budget. The cost budgeting process aggregates the activity cost estimates into a single document for the project. The resulting project budget expands on the preliminary budget from the project charter and provides far more detail. Table 3.12 shows the inputs, tools, techniques, and outputs for the cost budgeting process.

Table 3.12 Cost Budgeting Inputs, Tools, Techniques, and Outputs

Inputs

Tools and Techniques

Outputs

Project scope statement

Cost aggregation

Cost baseline

Work breakdown structure

Reserve analysis

Project funding requirements

WBS dictionary

Parametric estimating

Cost management plan (updates)

Activity cost estimates

Funding limit reconciliation

Requested changes

Activity cost estimates supporting detail

 

 

Project schedule

 

 

Resource calendars

 

 

Contract

 

 

Cost management plan

 

 


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