![]() The project cost includes the resources and contingency reserve. Once you understand them, you can estimate project costs accurately. On the surface, this process looks daunting, but several techniques help you accomplish this task easily. The PMBOK Guide defines the cost estimation process as “the process of developing an approximation of the cost of resources needed to complete project work.” More simply, cost estimation is the process of forecasting the project’s cost with a defined scope. The US GAO defines cost estimation as “the summation of individual cost elements, using established methods and valid data, to estimate the future costs of a program, based on what is known today.” In today’s blog post, I will discuss a few project estimation tools that can help you pinpoint the cost of project activities.īefore discussing the estimating technique, let us have a quick look at the cost estimation process. ![]() You may use the cost estimation process during the project execution as changes occur, and you will probably repeat the process when the need arises. For example, a business will use cost estimation tools to quote the correct price when bidding for a project. Also known as project estimation tools, they serve many purposes. Cost estimation tools help you accurately estimate costs in project management.
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