Ch5 - Estimating Project Times and Costs W2025

What is estimating in the context of project management?

Estimating is the process of forecasting or approximating the time and cost of completing project deliverables.

What are the two types of estimating approaches in project management?

Top-down (macro) estimates and bottom-up (micro) estimates.

What is a Top-Down Estimate?

An overall estimate generally made by senior management, derived from group consensus or mathematical relationships.

Define Bottom-Up Estimate.

Estimates made by those who will do the work, based on detailed elements found in the work breakdown structure.

What is the primary disadvantage of Top-Down estimating methods?

The time and cost for specific tasks may not be considered, leading to potential omissions.

What are the factors influencing the accuracy of estimates?

Planning horizon, project complexity, experience of the people estimating, and padding of estimates.

What is the preferred approach for defining a project in estimating?

Start with rough top-down estimates, develop the WBS/OBS, make bottom-up estimates, develop schedules and budgets, and reconcile differences.

What are direct costs in project management?

Costs that are clearly chargeable to a specific work package as the work is done, such as labor and materials.

Differentiate between Direct Project Overhead Costs and General and Administrative Overhead Costs.

Direct Project Overhead Costs can be tied to specific project deliverables, while General and Administrative Overhead Costs are not linked to specific projects and are applied across all products.

What is a Risk Assessment in estimating?

An evaluation of the risks associated with project tasks to avoid surprises for stakeholders.

Why is estimating time and cost important in project management?

Estimates serve as a baseline to compare against actual work done, thereby aiding in project control.

What are some methods for estimating project times and costs?

Consensus Method, Ratio Method, Apportion Method, and Learning Curves.

What is Phase Estimating?

A hybrid approach that starts with a top-down estimate and refines it for phases of the project throughout its implementation.

Define the Role of Work Breakdown Structure (WBS) in estimating.

WBS helps to breakdown project deliverables into manageable sections for more accurate estimating.

Explain the concept of Learning Curves.

The principle that the more frequently a task is performed, the greater the improvement in efficiency, thus reducing time needed for repetitive activities.