Data in a spreadsheet can be used to create charts that can then be used for

# Data in a spreadsheet can be used to create charts

This preview shows page 12 - 15 out of 17 pages. Methods for Conducting Project Cost Estimation In estimate cost process, the cost of each activity is determined, including the cost of human hours, the cost of equipment, and the cost of materials used as well as the contingency cost (i.e., the cost to cover the identified risks). Analogous Estimating Parametric Estimating Three Point Estimating Bottom-up Estimating These four estimation methods represent a hierarchical structure where analogous estimating represents the least accurate method, and bottom-up estimating represents the most precise method. Analogous Estimating This technique is employed to estimate the project cost when limited detail about the project is available. Therefore, this technique does not provide a very reliable estimation. The primary benefits of this technique are its lower cost and quick results. In analogous estimation, the cost of the project is estimated by comparing it with similar projects previously completed by your organization. Here, you will look into your organization’s historical records (i.e., an organizational process assets) for prior completed projects similar to your own. You will select the project which is closest to your project and use your expert judgment to determine the cost estimate of your current project. The analogous estimating is also known as the top-down estimating. Parametric Estimating Like analogous estimating, parametric estimation uses historical data to calculate cost estimates; however, it also utilizes statistical data. It takes variables from similar projects and applies them to the current project. For instance, in a previous project, we take the cost of concrete per cubic meter, then calculate the concrete requirement for the current project and multiply it with the cost obtained from the previous project. This will provide the total cost of concrete for your current project. In the same way, you can calculate the cost of other parameters (men, materials, and equipment). The accuracy of this process is better than the analogous estimation because it employs more than one data set.  #### You've reached the end of your free preview.

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