Cost estimation essay

Estimating cost is an important process in project management as it is the basis for determining and controlling the project budget. Costs are estimated for the first time at the beginning of a project or even before a project has started. Subsequently, the re- estimation of the project cost is repeated on an ongoing basis to account for more detailed information or changes to the scope or timeline. For instance, if the earned value management measures that are used for controlling project cost indicate significant variances from the budget, a re-estimation of the cost and schedule and a revisiting of the overall budget can be inevitable.
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Clients often need to be made to realize that if a project is to be completed at a certain level of quality, then a certain amount of time and money need also to be invested in the project. Projects that have time restrictions will need to increase the resources assigned to it or have the quality or scope reduced. The Right Balance By understanding the triple constraint and the ramifications associated with adjusting any one of its components, you will be able to plan your projects better, analyze project risks and protect the company from the problems of unrealistic client expectations. You will also be properly equipped to balance out the triple constraint when any adjustment has been made to one or more of its elements.
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Please join StudyMode to read the full document. Discuss at least two "real world" examples in which you use estimation in your daily life. Discuss from your examples how estimating can have negative effects if you over or under estimated. Think of an example in a real world scenario when a company or organization might use estimation and have negative or devastating results.
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This makes. Cost estimation challenges can be well addressed through adopting the following set of strategic approach. There are various methods of effort estimation and cost analysis however the right one should be selected on basis project. Hence cost is one of the most influential factors in the outcome of a product or service. Hence over the past years different costing techniques are evolved such as operation based approach, case based, break down approach, feature based costing, Activity based costing, time-driven activity based costing etc.
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