Week 4 Project

Page 1 of 1 MGT3035 Fundamentals of Project Management

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Project Management: Tools and Techniques There are several cost estimating and budgeting tools and techniques. Cost Estimating Tools and Techniques:

Analogous Estimating: A way of estimating cost by comparing an activity to a similar one done in a previous project. This happens when information is scant.

Resource Cost Rates: This technique uses known costs that are published elsewhere.

Parametric Estimating: This technique is used when one cost is known to be a mathematical function of another. It is expressed as an equation.

Vendor Bid Analysis: This is a “should cost” method based on market pricing.

Reserve Analysis: This technique requires ensuring that care is taken to not confuse estimates with risk management.

Cost of Quality: This technique refers to the total cost of all efforts related to quality.

Cost Budgeting Tools and Techniques:

Cost Aggregation: This technique sums up the activity estimates bottom-up.

Funding Limit Reconciliation: This technique is especially important when an overall budget is decreed early in the top-down process.