Estimation is the process of, using known data, projecting project costs, durations, or activities. Budgeting, scheduling, and resource planning all depend on accurate estimate.
Common Estimation Techniques:
- Analogous Estimating: Uses past project data for similar tasks.
- Parametric Estimating: Uses mathematical models (e.g., cost per unit).
- Bottom-Up Estimating: Breaks tasks into smaller parts for detailed assessment.
- Three-Point Estimating: Uses optimistic, pessimistic, and most likely estimates.
Example in Cost Estimation:
A marketing project estimates advertising costs based on previous campaigns:
- Past cost per ad: $500
- Estimated ads required: 20
- Total Estimated Cost: $10,000
Why It’s a Critical Skill:
Accurate estimation prevents cost overruns, unrealistic deadlines, and inefficient resource allocation, improving project success rates.
