Question

Presentation of Project Cost Estimate This module covers project cost estimation approaches (top-down estimates, bottom-up estimates, and parametric modeling). Research the textbook and other online resources to identify and understand various cost estimation approaches. Critically describe five cost estimation techniques, that are different from the three provided in the textbook. In a separate paragraph, explain with reasons the most suitable cost estimation technique for your term project.

Answer 1

Other then the three main cost estimation techniques, the five techniques that can be used for this purpose are:

- Delphi cost estimation- In this method cost estimates with rationals are prepared by experts and submitted to a coordinator, based on which the coordinator prepares a summary.The experts again make a set of new estimates after this. This procedure is repeated for a number of times. With the progress of this procedure the estimates show consensus between estimators. When the estimates reach a total consensus the exercise is put to an end and the coordinator prepares a summary of the final estimate based on the consensus.

- Empirical costing method- This method is drawing estimates from systems that are software based and paper based. Projects that are similar or are conducted frequently in particular industries follow this method where estimates can easily be done based on past data. The estimator fills the project details in the system and based on it the system matches it with the previous projects and gives an estimate.

Expert Judgement- In this method the estimating is done with involvement of experts who have worked on similar projects in the past and know how much such type of project will cost. As the projects cannot be exactly identical, the expert estimates are wide in range and thus can only give a rough figure of the feseability of the estimates.

Resource costing- This is a mathematical method which is simply calculating the cost of hiring resources for the project by the employment hours that are projected. This gives the total cost of the resources that will be needed to completion of the project and thus cost estimate is based on it.

Three point estimating- This method is based on a statistical moethod known as Program Analysis and Review Technique. In it estimates are made based on the analysing of the activity or duration and project costs by identifying the pessimistic,optimistic and the estimates that are most likely for any activity. It uses various formalae based on the optimistic, pessimistic and most likely costs and durations to calculate the expected costs and durations.

(Hello! From the above explaination please select a technique you find most suitable because I am not aware about your term project to answer the second part of the question. Thanks)