The primary parts of the plan are the budget, the schedule, and the multitude of details that fill these out.

The WBS is the basic tool used in project planning, and project estimates are typically derived from the details found in the WBS. Estimates form the basis for defining project budgets.

Estimates are typically formed using a combination of estimated costs for labor and materials, combined with allowances for indirect costs such as inventory costs and overhead.

WBS:

There are a few different types of WBS which are described in the textbook (Chapter 5), and these include deliverable based, function based, and phase or process based. The selection of the type is based on the project and project manager preference.

The accumulation of historical data regarding costs is a primary determinant of estimating accuracy.

to develop a meaningful database for use in historical cost estimating:
Develop a System for Gathering Data
Costs common across projects in the company should be identified, and requirements for comparative data established.
Regardless of the method used to accumulate historical data, a prime concern is that all costs are captured in the database. There are a number of ways to relate historical costs to new project estimates: By Actual Cost; By Pro-rating; By Pooling Costs.
Choosing the Method for Accumulating Historical Costs
The majority of firms use a combination of methods to record historical costs for estimating purposes. • Direct costs are usually recorded at actual cost and can therefore be closely correlated to output. • Indirect costs are usually allocated as a percentage of direct costs based on total volume. Indirect costs are generally expressed using a