Cost Estimation in Project Management
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Questions and Answers

What is the purpose of cost estimation in project management?

  • To provide a detailed breakdown of the project tasks.
  • To establish the baseline of the predicted project cost at different stages of development. (correct)
  • To control the quality of the project deliverables.
  • To determine the schedule and timeline of the project.

    • Which method in estimating involves a straightforward assessment made by an estimator or performer familiar with the work being estimated?

  • Parametric estimating
  • Direct estimating (correct)
  • Indirect estimating
  • Statistical estimating

    • What is the primary basis for an estimate in project management?

  • Estimation of project duration
  • Control of costs (correct)
  • Prediction of profit and loss
  • Measurement of productivity

    • In cost estimating, what are the basic assumptions for making an estimate?

    <p>There is some clarity in the project objectives (B)</p> Signup and view all the answers

    What does direct estimating involve?

    <p>Observation &amp; study of the tasks to be performed (A)</p> Signup and view all the answers

    What function does cost estimating serve in project management?

    <p>To predict costs and determine the budget, bid, or contract price. (D)</p> Signup and view all the answers

    Which method of estimation involves collecting and organizing historical information through mathematical techniques?

    <p>Statistical and parametric estimating (B)</p> Signup and view all the answers

    What does CER stand for in the context of estimation?

    <p>Cost Estimating Relationships (A)</p> Signup and view all the answers

    What is the widely used type of estimating relationship according to the given text?

    <p>Linear (D)</p> Signup and view all the answers

    What is the advantage of using firm quotes as a method of estimation?

    <p>It offers a choice from multiple sources (B)</p> Signup and view all the answers

    What are the three categories of information necessary for the reliability of any estimate, according to the text?

    <p>Project Requirements, Resources, Prices (D)</p> Signup and view all the answers

    What is necessary for the betterment of an estimate according to the text?

    <p>The identification of project scope of work (D)</p> Signup and view all the answers

    What impacts costs related to projects based on rules and liabilities coverage demanded by the project?

    <p>Appreciation of contract documents (B)</p> Signup and view all the answers

    Which category of information may be limited to the date when previous projects were implemented?

    <p>Information about prices (D)</p> Signup and view all the answers

    What is an important factor for good estimates according to the text?

    <p>Understanding limitation of information vis-à-vis rough or detailed estimates (A)</p> Signup and view all the answers

    What method involves comparison with a similar task/s (past or present) for estimation?

    <p>Estimation by analogy (B)</p> Signup and view all the answers

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