Estimation Techniques

Estimation Techniques in project management are essential methodologies used to predict project variables like cost, resources, duration, and effort. As a CAPM professional, understanding these techniques is crucial for effective planning. Analogous Estimation uses historical data from similar projects to estimate current project parameters. It's quick but less accurate, making it useful during early planning stages when detailed information is limited. Parametric Estimation applies statistical relationships between historical data and variables. For example, if building 100 sq ft costs $10,000, then 200 sq ft would cost approximately $20,000. This technique provides more accuracy when the parameters are scalable. Three-Point Estimation addresses uncertainty by using three scenarios: optimistic (O), most likely (M), and pessimistic (P). Two common formulas are: - Triangular Distribution: (O+M+P)/3 - PERT Distribution: (O+4M+P)/6 Bottom-Up Estimation breaks work into smaller components, estimates each separately, then combines them for total project estimates. This provides high accuracy but requires more time and detailed work breakdown. Expert Judgment relies on experienced professionals' opinions when historical data is unavailable. It's valuable but subject to individual biases. Reserve Analysis determines contingency reserves for identified risks and management reserves for unidentified risks. Cost of Quality Estimation evaluates prevention costs versus failure costs. Project Management Software can automate and enhance estimation processes. Vendor Bid Analysis compares multiple vendor proposals for accurate external cost estimation. Group Decision Techniques like Delphi Method use structured communication among experts to reach consensus on estimates. Effective estimators recognize that accuracy improves as the project progresses, and they revisit estimates throughout the project lifecycle as more information becomes available.

Estimation Techniques in project management are essential methodologies used to predict project variables like cost, resources, duration, and effort. As a CAPM professional, understanding these techn…

Concepts covered: Vendor Bid Analysis, Monte Carlo Simulation, Cost of Quality, Reserve Analysis, PERT Estimating, Delphi Technique, Heuristic Estimating, Analogous Estimating, Function Point Estimating, Top-Down Estimating, Expert Judgement, Three-Point Estimating, Parametric Estimating, Bottom-Up Estimating