The Estimating Problem Barbara just received the good news: She was assigned as

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The Estimating Problem Barbara just received the good news: She was assigned as the project manager for a project that her company won as part of competitive bidding. Whenever a request for proposal (RFP) comes into Barbara's company, a committee composed mainly of senior managers reviews the RFP. If the decision is made to bid on the job, the RFP is turned over to the Proposal Department. Part of the Proposal Department is an estimating group that is responsible for estimating all work. If the estimating group has no previous history with some of the deliverables or work packages and is unsure about the time and cost for the work, the estimating team will then ask the func tional managers for assistance with estimating. Project managers like Barbara do not often participate in the bidding process. Usually their first knowledge about a project comes after the contract is awarded to their company and they are assigned as the project manager. Some project managers are highly optimistic and trust the estimates that were submitted in the bid implicitly unless, of course, a significant span of time has elapsed between the date of submittal of the proposal and the final contract award date. Barbara, however, is somewhat pessimistic. She believes that accepting the estimates as they were submitted in the proposal is like playing Russian roulette. As such, Barbara prefers to review the estimates. One of the most critical work packages in the project was estimated at 12 weeks using one grade 7 employee full time. Barbara had performed this task on previous projects, and it required one person full time for 14 weeks. Barbara asked the estimating group how they arrived at this estimate. The estimating group responded that they used the three-point estimate where the optimistic time was four weeks, the most likely time was 13 weeks, and the pessimistic time was 16 weeks. Barbara believed that the three-point estimate was way off of the mark. The only way that this work package could ever be completed in four weeks would be for a very small project nowhere near the complexity of Barbara's project. Therefore, the estimating group was not considering any complexity factors when using the three-point estimate. Had the estimating gr estimate would have been 13 weeks. This was closer to the 14 weeks that Barbara thought the work package would take. While a difference of one week seems small, it could have a serious impact on Barbara's project and incur penalties for late delivery oup used the triangular distribution where each of the three estimates had an equal likelihood of occurrence, the final Barbara was still confused and decided to talk to Peter, the employee assigned to do this task. Barbara had worked with Peter on previous projects. Peter was a grade 9 employee and considered to be an expert in this work package. As part of the discussions with Barbara, Peter said: "I have seen estimating data bases that include this type of work package, and they all estimate the work package at about 14 weeks. I do not understand why our estimating group prefers to use the three-point estimate "Does the typical data base account for project complexity when considering the estimates?" asked Barbara.

Explanation / Answer

1. There are three different estimating techniques are discussed in this case. They are :

2. The estimates are different but the selection of the estimate depends on various factors like the complexity of the project, number of employees need to work and the dead line to submit, based on these factors the manager decides the requirement of the estimate. For example if the complexity is low with more employees then the estimate which is giving a less time frame can be accepted but if the complexity is more and employees are less then it is biter to use the estimate which provides more time.

3. I would have used the analogy estimate because I feel that it uses a reference of work that has been used previously, therefore it is better to use this technique and it also possess a provision for flexibility which will help the project if there is a change in any of the project plan.

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