Question 4 20 pts (TCO B) You are the project manager for three projects. You ar

Question

Question 4 20 pts (TCO B) You are the project manager for three projects. You are about to estimate costs for these three projects. Given the below information on each project, recommend an appropriate estimation method and justify your answer for each. Project A: This project will be a scale-up of a project done last year. All the same processes will be used. The costs for the material and other resources should be scalable based on last year's costs. Project B. This project is new to your company. You do not feel confident in estimating the project costs using internal resources. There are other companies that have done this type of work. Yet you still want the most accurate estimates possible Project C: The work of this project has not likely been done before by anyone. You are breaking technological barriers in this project As such, it is imperative you get accurate cost estimates

Explanation / Answer

Project A. An appropriate method for estimation of this project cost is ANALOGOUS method. This method is used when their is very little information available so the cost of this project is estimated by comparing with the similar project which company must have performed earlier.

This method does not has too much reliability as information is less . But this method provides a low cost and quick response or result.

Project B. Parametric Method can be used in estimating the cost of project B as in this the project is new for the company but their are companies that have done this project . Parametric Method uses the historical data from the company's that have done this project even uses statistcal data to estimate. It collects information from the same project and then implement it to the current project. It is similar to analogous method but Parametric provides more accuracy as it used more number of data to estimate the project.

Project C. Bottom up method is best method to estimate the project cost of projects like C. Bottom up method is also known as Definitive Technique. This method provides the most accurate , costly and time consuming method for estimation of cost for project. In the method of Bottom up each single activity of project is taken into account to determine the highest level of details at the bottom level and end up in calculating total cost of the project. Basically in this method every activity is divided into sub parts and then every sub part is calculated resulting in estimation of total cost . This is the most effective method for reliable estimation of project cost.

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