(TCO B) You are the project manager for three projects. You are about to estimat
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Question
(TCO B) You are the project manager for three projects. You are about to estimate costs for these three projects. Given the below information on each project, recommend an appropriate estimation method and justify your answer for each. Project A: The work of this project has not likely been done before by anyone. You are breaking technological barriers in this project. As such, it is imperative you get accurate cost estimates. Project B: This project will be a scale-up of a project done last year. All the same processes will be used. The costs for the material and other resources should be scalable based on last year’s costs. Project C: This project is new to your company. You do not feel confident in estimating the project costs using internal resources. There are other companies that have done this type of work. Yet you still want the most accurate estimates possible.I need urgent ansqwer!
Explanation / Answer
Project A: The work of this project has done been done earlier in any other project. Also the project is quite critical as it has the potential to become a breakthrough. To get accurate cost estimates, Bottom-up estimating can be used. This approach uses the principle of scalability and works on the granular level data to estimate cost of the project. This approach gives accurate results as the estimation is done on granular level.
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Project B: Project B is scaled-up version of a project, already done last year. Hence, we understand and have already identified the key drivers that will be critical in this project. Hence, Parametric estimating can be the most appropriate for cost estimation. This approach uses statistical modeling and conducts analysis on historical data of the key drivers. Hence, this approach will be quite beneficial in Project B.
Project C: This project has been done by other companies. So their data is available for referencing. The cost estimation can be outsourced to consultancy firm, which can easily access the data of other companies and perform Analogous estimating technique to estimate the cost of project C.
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