Project cost management has been practiced since the 1950s.) The approximate total project cost, called the cost estimate, is used to authorize a projects budget and manage its costs.Īn accurate cost estimate is critical for deciding whether to take on a project, for determining a projects eventual scope, and for ensuring that projects remain financially feasible and avoid cost overruns.Ī cost estimate may also be used to prepare a project cost baseline, which is the milestone-based point of comparison for assessing a projects actual cost performance. It is the primary element of project cost management, a knowledge area that involves planning, monitoring, and controlling a projects monetary costs. This complete guide to project cost estimating will walk you through the key concepts and major estimating techniques.Īdditionally, find how-tos, templates, and tips for key industries to help you get started with your estimates. Some project budgets are authorized based on the preliminary estimate.Ĭost estimations forecast the resources and associated costs needed to execute a project, which helps ensure you achieve project objectives within the approved timeline and budget.īy understanding the nuances of cost estimating and using standard estimation techniques, you can improve your forecasts.
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