Purpose:

Students will learn how to use cost estimation techniques to estimate costs

Outcomes Met With This Assignment:

contribute to a team activity to accomplish the goals of a project, recognizing the unique strengths and talents of individual team members
plan a project that meets organizational goals and that has a high probability of success
Instructions:

This assignment is the fifth of seven team assignments. As a team, you will learn about cost estimation approaches and select the approach to use for the project your group selected in Week 1.

Step 1: Preparation for Writing the Assignment

Before you begin writing the paper, read the following requirements that will help you meet the writing and APA requirements. Not reading this information will lead to a lower grade:

Read the grading rubric for the assignment. Use the grading rubric while writing the paper to ensure all requirements are met.
Third person writing is required. Third person means that there are no words such as “I”, “me”, “my”, “we”, or “us” (first person writing), nor is there use of “you” or “your” (second person writing). If uncertain how to write in the third person, view this link: http://www.quickanddirtytips.com/education/grammar/first-second-and-third-person.
Contractions are not used in business writing, so you are expected NOT to use contractions in writing this assignment.
For all source material used in the analysis, you will paraphrase and not use direct quotation marks but will instead paraphrase. What this means is that you will put the ideas of an author or article into your own words rather than lifting directly from a source document. You may not use more than four consecutive words from a source document, as doing so would require direct quotation marks. This requirement include facts from the case scenario. Changing words from a passage does not exclude the passage from having quotation marks.
You are responsible for APA only for in-text citations and a reference list. At a minimum, this deliverable should include in-text citations and references for information relating to the organization’s purpose, goals, strategy, and/or objectives.
You are expected to use the weekly courses readings to develop the analysis and support the reasoning. The expectation is that you provide a robust use of the course readings. Any material used from a source document (including both course readings and outside materials) must be cited and referenced. A reference within a reference list cannot exist without an associated in-text citation and vice versa. View the APA under Content on the main navigation bar.
You may not use books in completing this project.
Provide the page or paragraph number in every in-text citation presented. If using an eBook from the classroom, you may see that there are no page numbers so you will provide the Chapter Name and Section Title.
Step 2: Set Up the Paper

Create a Word or Rich Text Format (RTF) document that is double-spaced, 12-point font. The final product does not have a page limit but you want to make sure to write clearly and concisely.

Follow this format. Consider making an outline to ensure the correct headings are in place and to keep you organize the paper.

Title page with title, your name, the course, the instructor’s name; date
Cost Estimation Methods
Summary of Cost Estimation Methods
Selected Cost Estimation Approach
Step 3: Brainstorm

Under Discussion on the main navigation bar, locate your group.
In the LEO classroom (do not use external systems), participate in a brainstorming and collaboration session to learn about cost estimation techniques and how to estimate costs.
Identify and discuss at least three different approaches to Cost Estimation. Discuss which approach is the best fit for your project and why you chose the approach.
Step 4: Cost Estimation Approach

Concisely provide a summary of the identified cost estimation approaches.
Identify the cost estimation approach that was selected for your project. Explain why your team ultimately chose this methodology.
Step 5: Review

Review the paper to ensure all required elements are present and correct.

Step 6: Submit the plan in the Assignment Folder.

Traditionally cost estimation method help s teams identify and prioritizing activities and assignments, making necessary adjustments as required, foreseeing risks and allowing for contingencies when planning. This paper reviews the cost estimation methods to understand the best suitable approach to set accurate and factual resource estimates.

In the contemporary world of business, the most common cost estimation method is Expert judgment. This approach involves consulting experts on physical resource planning and estimating. Primarily these experts use statistics, historical data to back up their insight. Secondly, analogous estimating utilizes the scope, budget, duration, measures, and cost of a previous project as the basis to determine the complexity of the current project. However, the project must exhibit some similarity to attain concrete results (The Constructor, 2009). Thirdly the parametric estimating uses algorithmic data to quantify the physical resources needed to complete the project. Next, the bottom-up estimating method estimates the various work components by weighing the teams’ activity levels to project the working formulas.  Teams also use the three-point estimating to establish the risks involved using the three ranges classified as most likely, optimistic, and pessimistic of an activity cost.

Another primary cost estimation method is data analysis.  This process analyses the identified alternatives to apply to execute the project.  Next in line, Decision-making harbors much unanimity as a cost estimation method and requires half the number of people to agree by the cost estimates (Atif, 2020). Finally, a project management Information system is also a standard mode of cost estimation that uses integrated digital software designed to organize, plan and manage cost estimates.

In summary cost, estimation methods vary depending on the nature of the project.  All the cost estimation methods reviewed distinct embrace features designed to make functional and flexible cost estimates. From this perspective, it is evident that it is paramount to consider all the methods to achieve high accuracy and distinguish facts from perceptions on cost estimates

The best suitable cost estimation method is a combination of bottom-up estimate and parametric estimate.

References

Atif, Q. S. (2020). Project Cost Estimation Tools and Techniques. Retrieved from Project Manager: https://projectmanagers.org/management/cost/cost-estimation-tools-techniques/

The Constructor. (2009). Methods of Cost Estimation in Projects – Tools and Techniques. Retrieved from The Constructor: https://theconstructor.org/construction/methods-cost-estimation/36532/