Time and Cost Estimating Techniques
Estimating work times provides several benefits for the project
manager. It gives an idea of the level of effort required to complete
a project. This information then enables the project manager to
produce a realistic plan based upon that effort. Estimating also helps
the project manager anticipate the budget for the project.
There are many formal techniques available to estimate time and cost
for activities. Please refer to the Project Management Reference
Section for more details on these techniques. Anyone reviewing these
estimates should understand that they are approximations, not
Although the formal techniques are very specific, most of them have
the following tasks in common:
* Break activities down into small pieces for easier and more
accurate estimation. (WBS)
* Review historical information and compare to current activities.
* Include a contingency buffer for potential risks.
* Solicit advice from others that have previously completed similar
* Identify and document the assumptions and parameters used to
derive the estimates.
Microsoft Project is project management software. Project management
software assists project managers by providing a means for organizing
project information. A project manager uses the software to enter and
maintain a workplan that organizes activities and details. The
software calculates the scheduled dates for tasks based on the time or
work requirements of each task using a calendar of working days for
the project and its resources.
Microsoft Project is a tool to assist project managers in creating a
WBS, PERT Charts, Gantt Charts, and resource histograms. Other reports
and charts are also readily available for use and customization. AIS
project team members and managers should use the latest version.
Network analysis techniques identify early and late start and finish
dates for the uncompleted portions of project activities. The Program
Evaluation and Review Technique (PERT) and the Critical Path Method
(CPM) are examples of network analysis techniques.
The Program Evaluation and Review Technique (PERT) is an
event-oriented technique used to show all the project tasks,
dependencies, and earliest and latest start times for each task in
graphical form. It is used to estimate project duration when there is
a high degree of uncertainty with the individual activity duration
The Critical Path Method (CPM) is a technique used to predict project
duration by analyzing which sequence of activities (which path) has
the least amount of scheduling flexibility (the least amount of
float). The critical path identifies the activities in the project
plan which have the most potential to delay the project end date.
Gantt charts produced in this form are:
* easy to read;
* easy to update.
There are no widely accepted...