Wk 1 - Project Selection and Estimating Technique Paper

Week One

-

Assignment Content

1.

Explain

the factors that determine how a company selects a project.

Differentiate

between top

-

down and bottom

-

up estimates, including when each would be used.

·

Top

-

Down

–

This type of estimating is

generally less accurate; it is used at the beginning of the

project when developing the overall scope statement or project charter for rough orders of

magnitude estimating in general project planning within the organization.

(pg. 197)

·

Bottom

-

Up

–

This typ

e of estimating is generally more accurate because it starts at the bottom

with the detailed costs of all specific components of each work activity and progressively forms

the sum of all costs used in estimating the project budget.

(pg.197)

Determine

the

methods for estimating project costs.

·

Analogues

Cost Estimating

–

uses information from previous project activities that are similar

in scope, complexity, and requirements of deliverable as a comparable for estimating costs of

new project activities.

(pg. 193)

·

Parametric Cost Estimating

–

uses the same bases of analogou

s estimating from historical data

of previous projects and similar activities but utilizes a statistical or scalable component to

derive a relevant cost estimate.

(pg. 194)

·

Three

-

Point Cost estimating

–

cost information of components within work activities that

would suggest not only one absolute value, but also a range of value that might represent a

variety of influences that could swing the cost to a positive or negative direction. Three

-

point

cost es

timating utilizes both

optimistic

and

pessimistic

values to calculate an expected cost.

(pg.

194

-

195)

Explain

the types of costs.

·

Direct Cost

–

These

costs are

associated

directly with

work activities required to produce

project

deliverables

.

(pg. 190)

o

Labor

o

Materials

o

E

quipment

o

Consulting

o

Travel

·

Indirect Costs

–

These costs

include all other operations cost

s incurred by the organization to

support the production of a project

deliverable

.

(pg.190)

o

Overhead expenses

o

Administrative costs

o

Indirect labor

o

Indirect materials

Format

your 700

-

to 1,050

-

word paper consistent with APA guidelines.

Submit

the assignment.

Week One - Assignment Content

1.

Explain the factors that determine how a company selects a project.

Differentiate between top-down and bottom-up estimates, including when each would be used.

 Top-Down – This type of estimating is generally less accurate; it is used at the beginning of the

project when developing the overall scope statement or project charter for rough orders of

magnitude estimating in general project planning within the organization. (pg. 197)

 Bottom-Up – This type of estimating is generally more accurate because it starts at the bottom

with the detailed costs of all specific components of each work activity and progressively forms

the sum of all costs used in estimating the project budget. (pg.197)

Determine the methods for estimating project costs.

 Analogues Cost Estimating – uses information from previous project activities that are similar

in scope, complexity, and requirements of deliverable as a comparable for estimating costs of

new project activities. (pg. 193)

 Parametric Cost Estimating – uses the same bases of analogous estimating from historical data

of previous projects and similar activities but utilizes a statistical or scalable component to

derive a relevant cost estimate. (pg. 194)

 Three-Point Cost estimating – cost information of components within work activities that

would suggest not only one absolute value, but also a range of value that might represent a

variety of influences that could swing the cost to a positive or negative direction. Three-point

cost estimating utilizes both optimistic and pessimistic values to calculate an expected cost. (pg.

194-195)

Explain the types of costs.

 Direct Cost – These costs are associated directly with work activities required to produce

project deliverables. (pg. 190)

o Labor

o Materials

o Equipment

o Consulting

o Travel

 Indirect Costs – These costs include all other operations costs incurred by the organization to

support the production of a project deliverable. (pg.190)

o Overhead expenses

o Administrative costs

o Indirect labor

o Indirect materials

Format your 700- to 1,050-word paper consistent with APA guidelines.

Submit the assignment.