SAB4_#68 Estimate_Cost

Annotations:

• There are three processes involved with PMBOK cost management. 
• The first process is cost estimating.
• The second process involved with PMBOK cost management strategies is cost budgeting.
• The third and final process is cost control.

1. Project Schedule
2. Human Resorce Managment Plan
3. scope Baseline
4. Risk Register
5. EEF (Enterprise Enviromental Factors)
6. OPAS (Organizational Process Assets)
7. Cost Managment plan
8. Activity Cost Estimates

   Annotations:

   • quantitative assessments of likely costs of the resources required to complete schedule activities": for each activity of the activity list the document of the Activity cost estimates contain one value.
9. Activity Cost Estimate Supporting Detail

   Annotations:

   • is the activity specific documentation which "[...] (provides) a clear professional, and complete picture by which the cost estimate was derived". It contains constraints, assumptions, comutations and basic values.
10. Requested Changes

    Annotations:

    • may be generated if - for example - the cost target budget can't be met and the scope or the WBS and the activity list must be refined
    1. Updates of the Cost Management Plan may be generated by changings which are elaborated of the basis of the practice and which concern the definitions, how to manage the costs.
11. Tools and Techniques
    1. Analogous estimating

       Annotations:

       • means estimating on the base of historical information by using a special idea / assumption: the actual costs of an activity should be similar like those of a similar activity of another project, which already has (successfully) been executed. Naturally, cost estimating itself generates costs. Decreasing the estimating costs by using worse estimating techniques (like analogous estimating) might increase the project costs by increasing corrective actions.
       1. Determine resource cost rates

          Annotations:

          • is the step of collecting unit cost rates.Bottom up estimating means decomposing an identified activity, 
          1. Project managment software

             Annotations:

             •  helps to collect, document, and compute estimates and the needed basic values,
             1. Vendor bid analysis

                Annotations:

                •  means that the bid of a vendor will be compared with bids of other vendors and/or by an own detailed cost analysis
                1. Reserve analysis

                   Annotations:

                   • regards the more or less hidden contingency reserves  which may be implicitly embedded into activity durance or explicitly integrated by the critical chain method. A good method is to integrate estimatings for known unknowns into the cost baseline.
                   1. Cost of quality

                      Annotations:

                      • analysis normally delivers results which can influence the cost estimatings.
       2. BOTTOM-UP ESTIMATING [TECHNIQUE]

          Annotations:

          •  In bottom-up estimating, each task is broken down into smaller components. Then, individual estimates are developed to determine what specifically is needed to meet the requirements of each of these smaller components of the work. 
          • The estimates for the smaller individual components are then aggregated to develop a larger estimate for the entire task as a whole. In doing this, the estimate for the task as a whole is typically far more accurate, as it allows for careful consideration of each of the smaller parts of the task and then combining these carefully considered estimates rather than merely making one large estimate which typically will not as thoroughly consider all of the individual components of a task. In general, the smaller the scope, the greater the accuracy.