CHAPTER 5 - Estimating Project Times and Costs

Poorly written scope statements for new technology lead to errors in estimating times and costs

true

What are potential impacts caused by adding time or cost (padding) to a work breakdown structure element estimate?

Gaming the system may cause management to unilaterally cut the estimate and the total cost or time may cause the project to be canceled or not executed.

What statements are correct about the influence that are planning horizon has upon project estimates?

Near term event estimating is more accurate than long range planning and estimating is more accurate after the individual work packages have been defined.

Factors outside of the organization, project team, or project itself may influence which aspect of a time/cost estimate?

accuracy of the estimate

Apportionment is a multi-faceted top down approach and may be used in which situations?

assigning WBS major deliverable costs by percentage of the total project and estimating a project for a relatively standard product with minor changes

What is required for using the template method of bottom up estimating?

good historical information and understanding differences between projects

Why should project task time, cost, and resource estimates be based on "normal conditions"?

prevents overly optimistic estimates and provides a common frame of reference for interpreting the estimates

What is the term used to define the starting point by which a project estimate is "frozen" and then measured to determine accuracy?

project baseline

Top down estimating for pojects is best suited for situations when

project proposals are being evaluated and a WBS cannot be easily defined

Top down methods, sometimes called parametric, usually use _______ to estimate project times or costs

ratios or surrogates

What is considered a direct overhead cost?

salary of the project manager and temporary rental space for the project team.

Which type of project lends itself to the function point method of top down estimating?

software development

Good time and cost estimates are needed within project execution to allow a project manager to do what?

support decision making, monitor project progress and schedule work.

According to project estimation guidelines, each task estimate is supposed to be done independently of other tasks. why does this lead to inaccurate estimates?

task interdependencies influence actual time and cost requirements

Direct costs are real cash outflows expended as a project progresses and may be influenced by

the Work Package Leader, Project Manager and Project Team Member

Identify the statements about general and administrative (G&A) overhead costs.

these represent organization costs that are not directly linked to a specific project and costs that include organization costs across all products and projects such as advertising

Top down and bottom up estimating both use parametric (ratio) estimating, the difference is that

top down looks at the project as a total unit, whereas bottom up looks at individual tasks

Which approach to estimating project time and cost is usually completed by upper management?

top down

Which are project factors that would tend to require a greater level of detail in a work breakdown structure (WBS) used for estimating?

A high degree of project complexity and a need for tight budget or time control

What process best describes phase estimating utilization of micro (bottom up) and macro (to down) methods?

A repetitive cycle of micro for short term and macro for the remainder of the project

Why are estimates generally so inaccurate?

Because predicting the future is difficult and a lack of information in the planning phase.

Why is keeping task estimates independent of each other needed for sound project planning?

Dependancies, and potential impacts, may not be known and it prevents developing individual estimates to fit a predetermined total duration and/or cost

What is a primary reason for using several people to generate a time or cost estimate for a project rather than have a single estimator do all the estimating?

Eliminates extreme estimates

Which is a significant concern with using consensus for top down project estimating?

People may yield to the opinion of the highest ranking person in the room

After project execution begins, at what point in a project should time and cost estimates be reviewed for change?

When there is any change to the project scope

Range estimating will provide an estimation for a "high" and "low" cost and/or time frame to complete a project. What project characteristics would need this type of approach?

When work packages have a high degree of uncertainty such as software/technology projects with relatively unknown requirements

Why is past experience the best starting point for creating quality time and cost estimates?

While projects are unique, many elements are similar to past work.

Cost of labor, materials, and equipment are examples of _______ costs.

direct

What are the benefits of using the resource (person) most familiar with a task to do estimating?

establishes "buy in" for the project, builds communication channels early, and increases the probability of accurate estimates.

Why is top down estimating generally not effective at developing a low cost project estimate?

estimators may be influenced by the proposed budget

Why should time estimates use common units (hours, days, weeks, etc) across all project tasks?

facilitates network analysis

A learning curve is most applicable in non-repetitive tasks.

false

What "people factors" influence the quality of the project estimates?

individual skills and familiarity with the task

Bottom up estimating is considered by the authors to be more accurate than top down because

it considers specific tasks

What estimating influence is described by the general statement that some organizations encourage padding of estimates while others discourage the practice and want the most realistic and/or accurate estimate?

organization culture

One of the major advantages of a dedicated project team is the speed gained from concentrated focus and localized project decisions, what is the additional cost of that speed gained?

personnel are 100% allocated to that project