Estimate Class B

Test Your Knowledge

Class B Estimates Quiz

Instructions: Choose the best answer for each question.

1. What is the expected precision variance for a Class B estimate?

a) 10% b) 15% c) 25% d) 50%

2. Which of the following is NOT a key characteristic of a Class B estimate?

a) Based on a WBS b) Developed by experts c) Provides a high level of detail d) 25% variance allowed

3. What is a primary advantage of using Class B estimates?

a) Providing a detailed cost breakdown b) Eliminating the need for further cost estimations c) Enabling early feasibility assessment d) Guaranteeing accurate cost projections

4. Which of the following is a potential limitation of Class B estimates?

a) They are always accurate. b) They are not detailed enough to capture all project complexities. c) They are time-consuming to develop. d) They are only useful for small projects.

5. What is another term used to describe a Class B estimate?

a) Definitive Estimate b) Preliminary Estimate c) Rough Order of Magnitude Estimate d) Class A Estimate

Class B Estimates Exercise

Scenario: You are a project manager tasked with developing a preliminary cost estimate for a new software development project. The project involves creating a mobile application for a client.

Task:

1. Identify at least 5 key tasks or components of the project that would be included in a WBS for this project.
2. For each task, provide a brief description and an estimated cost based on your knowledge of similar projects.
3. State the overall estimated cost for the project, acknowledging the potential 25% variance.

Techniques

Chapter 1: Techniques for Developing Class B Estimates

This chapter delves into the practical techniques employed in creating effective Class B estimates.

1.1 Work Breakdown Structure (WBS): The Foundation of Detail

The WBS serves as the cornerstone for any Class B estimate. It breaks down the project into manageable tasks, providing a clear structure for cost analysis.

• Level 1: The highest level of the WBS defines the major project deliverables.
• Level 2: Each level 1 deliverable is further broken down into sub-tasks.
• Level 3: (Optional) For more complex projects, sub-tasks can be broken down further.

1.2 Bottom-Up Estimation: Building from the Ground Up

The bottom-up approach is commonly used for Class B estimates. It involves:

• Detailed Task Analysis: Each task in the WBS is analyzed for its resource requirements (labor, materials, equipment) and estimated duration.
• Resource Costing: The estimated cost of resources is applied to each task.
• Total Cost Calculation: The individual task costs are summed to arrive at the overall project cost.

1.3 Analogous Estimating: Leveraging Past Experiences

This technique relies on historical data from similar projects to estimate costs.

• Identify Comparable Projects: Projects with similar scope, complexity, and resource requirements are chosen.
• Adjust for Differences: The historical data is adjusted to account for differences between the past projects and the current one.
• Apply Adjustment Factors: Factors like inflation, technological advancements, and changes in labor costs are considered.

1.4 Parametric Estimating: Utilizing Historical Data and Metrics

This technique combines historical data with project parameters like size, complexity, and duration.

• Identify Relevant Metrics: Metrics like square footage, number of units, or functional points are used.
• Develop Regression Models: Statistical models are used to correlate historical data with project parameters.
• Apply Model to Current Project: The model is applied to the current project based on its specific parameters.

1.5 Expert Judgement: Tap into Collective Knowledge

Involving subject matter experts and project managers in the estimation process is crucial.

• Brainstorming Sessions: Experts contribute their knowledge and experience through collaborative discussions.
• Delphi Technique: A structured approach where experts provide anonymous estimates, which are then reviewed and refined.

1.6 Combining Techniques:

A combination of techniques often leads to the most accurate Class B estimates.

• Bottom-up for Detailed Tasks: This provides a detailed breakdown of costs.
• Analogous/Parametric for High-Level Tasks: These can be used for tasks with historical data or predictable parameters.
• Expert Judgement for Uncertainty: This helps address unforeseen factors or areas of ambiguity.

1.7 Documentation and Communication:

• Document the Estimation Process: Record the techniques used, assumptions made, and justifications for cost estimates.
• Communicate Clearly: Present the estimates to stakeholders with clear explanations and supporting documentation.

By employing these techniques, project managers can create robust and accurate Class B estimates, laying the groundwork for successful project planning and execution.