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Questions and Answers
What is the formula to estimate the cost related to the duration of a task?
What does the S-curve represent in project cost estimation?
What is the probability that the project will cost more than $123,000 according to the S-curve?
What is the purpose of a management reserve in project cost estimation?
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What is the component that represents the sum of cost, management reserve, and desired profit?
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What is the advantage of creating an S-curve for the project schedule?
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What is a critical element to consider when estimating the cost of a project?
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What does the point on the S-curve represent where the cumulative probability is 50%?
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What is the purpose of cost estimation in project management?
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What is the advantage of using an S-curve in project cost estimation?
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What is the component that represents the cost related to the duration of a task?
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Study Notes
Project Scheduling and Cost Estimation
- Project scheduling is challenging due to factors like resource availability, project complexity, and location-specific environmental and legal factors.
Factors Affecting Schedule Predictions
- Resource availability directly affects project completion time
- Number of workers and their skill levels affect project duration
- Project location introduces environmental and legal factors
Estimating the Cost of a Project
- Cost prediction involves forecasting financial resources required to complete a project
- Cost estimates are created from the project schedule
- The schedule for a single task is converted to a cost estimate for that task
- The project's business manager adds up cost estimates for all tasks, including a contingency fund to correct problems that arise
Three-Point Estimates for Cost and Schedule
- Three-point estimates can be created for cost, similar to schedule estimates
- This method provides a range of potential project cost estimates
Predicting Schedule and Cost
- Predicting schedule and cost is a basic expectation for a good engineering project manager
- Schedule predictions are made before cost estimates
- Cost estimates depend significantly on schedule estimates
Basic Steps for Credible Schedule Prediction
- Define tasks through the creation of a work-breakdown structure
- Identify interdependencies between tasks
- Estimate the duration of each task in a statistical fashion
- Only the initial task in each chain is fixed to an actual calendar date; all other dates are derived from task interdependencies and statistically expressed task durations
Task Interdependencies
- Tasks can be dependent on each other, waiting for completion before proceeding
- Multiple tasks may be awaiting the completion of a single task
- Tasks can be independent of each other
Elements of Cost Estimates
- Cost related to task duration (duration × number of people × hourly cost of each person)
- Number of trips to various locations required to perform the work
- Quantity of materials and unit cost of each material
S-Curve Graphical Representation
- The S-curve shows cumulative probability (Y-axis) plotted against likely project cost (X-axis)
- The curve represents the probability of completing a project within a certain cost range
- The business manager can create an S-curve for the schedule too, showing the probability of completing a project within various durations
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Description
Learn about the factors that make project scheduling challenging, including project type and complexity. Discover how to estimate schedules for your projects.
