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A Strategy Paper

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Estimating Project Times and Costs
Estimating

ESTIMATING PROJECTS
Estimating
The process of forecasting or approximating the time and cost of completing project deliverables

Types of Estimates
Top-down (macro) estimates: analogy, group consensus, or mathematical relationships
Bottom-up (micro) estimates: estimates of elements of the work breakdown structure

WHY ESTIMATING TIME AND COST ARE
IMPORTANT
Estimates are needed to determine how long the project should take and its cost.
Estimates are needed to schedule work.
Estimates are needed to develop cash flow needs
Estimates are needed to develop time-phased budgets and establish the project baseline.
Estimates are needed to determine whether the project is worth doing. Estimates are needed to determine how well the project is progressing. Estimates are needed to support good decisions.

FACTORS INFLUENCING THE QUALITY
OF ESTIMATES
Other Factors
Other Factors
Other
((e.g.
e.g.
.downtime)
..downtime)
downtime)
Organization
Organization
Culture
Culture
Padding
Padding
Estimates
Estimates

Planning
Planning
Planning
Horizon
Horizon
Horizon

Quality of
Quality of
Quality
Estimates
Estimates
Estimates

Project
Project
Duration
Duration
Task
Task
Task
Definition
Definition
Definition
People
People
People productivity productivity productivity Project
Project
Project
Structure and
Structure and
Organization
Organization
Organization

ESTIMATING GUIDELINES FOR TIMES,
COSTS, AND RESOURCES
Have people familiar with the tasks make the estimate.
Use several people to make estimates.
Base estimates on normal conditions, efficient methods, and a normal level of resources.
Use consistent time units in estimating task times.
Treat each task as independent, don’t aggregate.
Don’t make allowances for contingencies.
Adding a risk

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