Project Estimating and Cost Management

. This point varies from company to company and among project managers within the same company. The contents of each level of detail are not only company-specific, but they are also specific to the nature of deliverables involved in each project. The degree of detail at the lowest level of each branch must be in line with the size of the project and in conformance with the company’s operational philosophies

Ranking of projects is most commonly conducted with the use of an index, sometimes called a metric, or a group of indices called a model.

The scope document includes the client’s wants and needs, the distinction being that “wants” are those items that would be desirable to have although not crucial to the success of the project, while “needs” are those items that are essential to the success and usability of the project deliverable

The terms requirements specifications and scope have been used interchangeably and sometimes differently depending on the industry in which the project is being implemented

Since it is somewhat unrealistic to expect one person to have expertise in all these areas, organizations sometimes form estimating committees or estimating boards

When establishing the project budget on the basis of the project estimate, it is necessary to note whether the estimate was developed using a rough conceptual estimate technique or a detailed bottom-up estimate.

When the project is conceived, the estimate is extremely inaccurate because very little information is available about the expected deliverables, the project team, and the project environment. But, as the project evolves and more information becomes available, the estimate can be fine-tuned to a higher level of precision