By: Ray Myers, Jr., PMP The accuracy of an estimate can be improved by considering uncertainty and risk.  PERT uses 3 estimates to define a range for an activity’s cost.  This formula can be used for cost estimating and for scheduling. Most Likely – based on a realistic assessment Optimistic – estimated cost based...
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By: Ray Myers, Jr., PMP There are 4 cost estimating techniques discussed in the PMBOK: Expert Judgment Influenced by variables such as labor rates, material costs, inflation, risk factors, etc. Guided by historical information and insights from prior similar projects May be used to determine whether to combine other estimating methods or reconcile differences...
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By: Ray Myers, Jr., PMP The accuracy of project cost estimates varies depending on position in the project life cycle. Rough Order of Magnitude (ROM) Very early in the project ROM estimates are used for selection decisions Accuracy is usually plus/minus 50%, but could range from -25% to +75% Budgetary Early in the project...
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