8 Major Tools And Techniques For Estimate Project Costs
In my previous articles, I have talked about some of the major inputs for estimate project costs for projects. In this article, I want to look at some of the major tools and techniques for estimate project costs for projects. Follow me as we look at this together in this article.
Now the tools…
#1 Expert judgement
You will always need to rely on experts when you need to determine the amount it will cost to execute your project activities. You have to get inputs from all stakeholders that have one or two things to do about your project. This will ensure that you have a realistic budget for your project.
Note that experts should be considered from individual or groups with specialized knowledge or training in the following areas: previous similar projects, the information in the industry, discipline and application; cost estimating methods among others.
#2 Analogous estimating
Analogous cost estimating uses values, or attributes of a previous project that are similar to the current project. Values and attributes may include the scope, cost, budget, duration, and measure of scale. Comparison of these project values or attributes becomes the basis for estimating the same parameter measurement for the current project.
#3 Parametric Estimating
Parametric estimating uses a statistical relationship between relevant historical data and other variables to calculate a cost estimate for project work. This technique can produce higher levels of accuracy depending on the sophistication and underlying data built into the model. Parametric cost estimates can be applied to a total project or to segments of a project, in conjunction with other estimating methods.
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