Estimate Costs
Figure 17:Estimate Costs: Inputs, Tools and Techniques, and Outputs. Reprinted from "A Guide to the Project Management Body of Knowledge (PMBOK Guide), (5th Edition)" by Project Management Institute, 2013, p. 200. Newton Square, PA: Project Management Institute, Inc. Reprinted without permission
Figure 17: Estimate Costs above depicts all the possible inputs tools and techniques resulting in Activity cost estimates, Basis of estimates and Project documents updates.
7.2 Estimate Costs
Process Definition
Cost estimation takes in as many known factors as possible to make an accurate prediction of what a particular project activity will cost be it in time or monetary funding. If the project is international the participants might be paid in another currency other than the country where the project resides and an hourly or day unit is usually used instead of currency to eliminate fluctuations. Cost estimate refinement is ongoing during the project further expose or discover additional requirements not considered initially possibly increasing or decreasing the costs associated with the project task.
Process Assessment
Counting the costs can difficult for all parties involved. It is imperative to have as much information as possible to make an accurate estimate and possibly have a caveat to reevaluate the estimate as the project unfolds to more accurately reflect an account for the unknowns not originally factored in at the beginning. Requirement refinement can add or decrease the cost estimate.
Estimate Costs
7.2.1
Input
Human Resource Management Plan 611:
This input the human resource plan created in PGMT 611, discusses the costs and resources associated with the reorganization and training of staff to bring about organizational change and documents costs of loans to pay for equipment.
7.2.2
Tools and Techniques
The Tolstoy case study utilizes a technique of historical construction data such as square footage to derive the costs involved in the construction of the Tolstoy's new home. The Tolstoys will take on some of the construction themselves such as plumbing and interior decorating which both Tolstoys have experience in doing.
7.2.3
Outputs
In PGMT 611, budget and output take into account several known parameters such as equipment costs derive a budget estimate along with other budget estimates derived from inquiries and industry published equipment and training prices.