Estimate Costs In Project Management

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7.2 Estimate Costs

Estimating costs is the process of making a well-informed approximation of the project 's monetary resources that will be required. This process allows the project team to form the basis for the project 's total budget.

Process Assessment

In all projects, the overall budget is made up of the individual activity and task costs. The project team must estimate the resource, labor, and contingency costs as accurately as possible using a variety of methods in order to aggregate the total project/phase budget. In my experience, properly estimating and justifying costs is the first milestone for stakeholder approval. As a project manager, you must be good stewards of monetary resources in order to gain confidence and acceptance
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This process is important because it established the authorized cost baseline from which all cost performance will be measured.

Process Assessment

In my experience, determining the project 's budget brings a sense of firmness and finality to the cost planning process. This is the final number that is presented to stakeholders and customers and can make or break the project approval process. Customers have a different reaction to viewing a finalized project budget than they do scanning itemized activity costs. Seeing a cumulative figure can be daunting, it is the responsibility of the project manager to ensure that they have place the right emphasis on determining the project budget.

During the bicycle project for PMGT 614, I developed an activity cost estimate for the individual tasks necessary for bring a new bicycle to market. This process input is necessary when estimating costs and budgets for the entire project.

In the summer of 2015, my woodworking business was invited to sell products at an Independence Day craft faire. The following cost aggregation tool shows a breakdown of the activities and products by schedule and by estimated cost. Each of those costs were aggregated into work package costs and ultimately the project
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Process Assessment

Having an established quality management plan is essential to maintaining a reputable product. Having firmly established quality standards gives the project a line in the sand to which it should never cross. This point is emphasized when changes take place and the scope and/or budget require more resources that may be easily taken from a process focused on quality. To ensure a safe, reliable, and quality product/service, the project must have an effective quality management plan.

During a group project for PMGT 613, my group created a risk register for an organizational restructuring project. This input allows the project team to address threats and opportunities that may impact project quality.

During PMGT 614, I examined the technique of using the seven basic quality tools when planning for quality-related problems. Ensuring that these tools are properly established during the planning process helps validate their necessity during the monitor and control

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