Project Estimating Techniques Essay

One of the most in-chief(postnominal) factors to the success of a stick out is how tumefy the intention is calculated, as well as how overall comprises are managed during the execution phase by the project manager. Project addresss and estimates are vital to the success of every government activity to remain competitive in the market. Cost estimating for organizations rely severely on resources that can neartimes be difficult to obtain. Forecasting and utilizing historic return costs are just a couple of slipway that organizations rely on estimating. Experienced planners are often a seek trade in spite of appearance the market this paper will discuss some often utilise project cost estimating techniques.Types of EstimatingThe first persona of estimating is analogous. This casing of estimating hires estimates from a previous(prenominal) project that is similar, and uses them to build estimates for the new project. While this pillow slip of estimating is undecompos ed to the planning process, caution must be used to delay that estimates carried over from the previous project are fair and reasonable. Parametric estimation takes historical data inputs, makes calculated assumptions based on market and statistical data, and then formulates the estimate. This type of estimating is useful as it does use historical data, bring together with statistical data however, assumptions made by the planner can be skewed and lead to inaccurate estimates in my opinion. The next type of estimating is bottom-up. bottom-up estimating utilizes information from individual estimates through the Work Break Down structure. This type of estimating is 1 of the most common types of estimating because it uses estimates from the floor tasks.These floor tasks are estimated by subject matter experts with years of experience, and can be very beneficial to ensuring that not only the estimate is accurate, but the scope of the task is correct. some other type of estimating i s three-point estimating. Three-point estimating takes a look at the best, worst, and most realistic scenario to cost estimating the project. These three options obviously come with apremium on cost, time, or quality. Dependent on what the project objective is will more than apt(predicate) determine what route to take in this process. From my work experience with project planning, cost estimating can be a very difficult task. approximately organizations have a method or process in how to cost estimate. Some utilize checklists, while others whitethorn standard operating procedures as fragmentize of an organizational policy.Regardless of what tools are available to a project team during the cost estimating process, knowing the overall goals and objectives of the project are keys to estimating a successful project. The burden of cost estimating is not normally the responsibility of one individual it often lies within the project team. Multiple estimators from various skills are part of the process, and all types of estimating as discussed earlier are part of the process. Tools that my organization utilizes are bid specification review meetings that go over the material, labor, and grade that apply to the work being conducted during the project. In addition, an independent government estimate (IGE) is utilized to ensure that estimates are filled out thoroughly, and reviewed against the contractors estimates upon receipt. There are legion(predicate) other processes that can be used however, these are the most commonly ones used within government estimating.ConclusionCost estimating is a very important part of the project planning process as it often dictates the duration of the project, and how oft work can be accomplished during the project against the budget precondition for the project. Estimates of time and cost together allow the manager to develop a time-phased budget, which is imperative for project control (Larson & Gray, 2014, p. 131). While there are many different ways that estimates are created, there is no sure send word way in stating that one is better than the other.While some may think that historical data is a more accurate way, there is not telling that the estimate and return costs from a previous project were fair and reasonable. If the previous project cost was overestimated, then the incumbent project would continue to be overestimated therefore not proving to be a cost benefit to the organization. Cost estimating drives the project plan, and organizations need to ensure they utilize all the tools and resources they have available to them to make theproject a success. point of referenceLarson, E. W., & Gray, C. F. (2014). Project Management The Managerial Process (6th ed.). McGraw-Hill.