Estimate Costs assigns a cost to each activity or work package using the same family of techniques as durations — analogous, parametric, bottom-up, three-point. It accounts for labor, materials, equipment, services, and contingency, and records the basis of estimates so the reasoning is auditable.
Estimates are refined as the project progresses and more is known, moving from rough order-of-magnitude toward definitive. Reserve analysis separates contingency, for known risks, from the work itself.
Common pitfalls. Treating an early rough estimate as a firm commitment; omitting indirect costs and contingency; inconsistent units or assumptions across estimates; and no basis of estimates, so numbers can’t be defended or revisited.
Inputs, Tools & Techniques, and Outputs
Inputs
- Project management plan
- Project documents
- Enterprise environmental factors
- Organizational process assets
Tools & Techniques
- Expert judgment
- Analogous estimating
- Parametric estimating
- Bottom-up estimating
- Three-point estimating
- Data analysis
- Project management information system
- Decision making
Outputs
- Cost estimates
- Basis of estimates
- Project documents updates