Washington Purchasing Cost Estimate
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FAQ
Cost estimation in project management is the process of forecasting the financial and other resources needed to complete a project within a defined scope. Cost estimation accounts for each element required for the projectfrom materials to laborand calculates a total amount that determines a project's budget.
Cost Estimating is the process of developing a cost estimate. Cost estimating involves collecting and analyzing historical data and applying quantitative models, techniques, tools, and databases to predict a program's future cost.
The most common way to estimate costs is to make a list of items you need and add up their costs. Make sure you include all applicable costs, such as equipment and parts, materials and supplies, labor, financing, fees and licensing, transportation, and acquisition costs for land or facilities.
A construction cost estimate serves one of the three basic functions: design, bid and control.
Project cost estimation is the process of predicting the quantity, cost, and price of the resources required by the scope of a project. Since cost estimation is about the prediction of costs rather than counting the actual cost, a certain degree of uncertainty is involved.
The three types of cost estimates are design, bid, and control estimates. Design estimates are prepared in the project preliminaries which gives the order of magnitude of the project cost.
An analytic estimate (also called bottom-up estimating) is one of the most accurate cost estimation techniquesbut it can also be time-intensive. Bottom-up estimating breaks the project down into smaller parts and then creates cost estimates for those variables.
A cost estimator is the professional who prepares cost estimates.
