Obviously, one of the outputs of the Cost Estimating process is the activity cost estimates. These are quantitative amounts—usually stated in monetary units—that reflect the cost of the resources needed to complete the project activities. The tools and techniques we just described help you derive these estimates. Resources in this case include human resources, material, equipment, information technology needs, and so on as well as any contingency reserve amounts and inflation factors (if you're using them).
Activity Cost Estimating supporting detail, requested changes, and cost management plan updates are the remaining Cost Estimating outputs. Supporting detail is just as you've seen in other processes. Any information that supports how the estimates were developed, what assumptions were made during the Cost Estimating process, and any other details you think need to be documented go here. According to A Guide to the PMBOK, the supporting detail should include the following:
A description of the work that was estimated.
• A description of how the estimate was developed or the basis for the estimate.
■ A description of the assumptions made about the estimates or the method used to determine them.
• A description of the constraints.
■ A range of possible results. Like the time estimates, the cost estimates should be stated within ranges such as "$500 ± $75."
Cost variances will occur and estimates will be refined as you get further into your project. As a result, you'll update cost estimates and ultimately the project budget to reflect these changes.
Cost Estimating uses several techniques to make an accurate assessment of the project costs. In practice, using a combination of techniques is your best bet to come up with the most reliable cost estimates. The activity cost estimates will become an input to the Cost Budgeting process, which allows you to establish a baseline for project costs to track against.
Activity Cost Estimating supporting detail, requested changes, and cost management plan updates are the remaining Cost Estimating outputs. Supporting detail is just as you've seen in other processes. Any information that supports how the estimates were developed, what assumptions were made during the Cost Estimating process, and any other details you think need to be documented go here. According to A Guide to the PMBOK, the supporting detail should include the following:
A description of the work that was estimated.
• A description of how the estimate was developed or the basis for the estimate.
■ A description of the assumptions made about the estimates or the method used to determine them.
• A description of the constraints.
■ A range of possible results. Like the time estimates, the cost estimates should be stated within ranges such as "$500 ± $75."
Cost variances will occur and estimates will be refined as you get further into your project. As a result, you'll update cost estimates and ultimately the project budget to reflect these changes.
Cost Estimating uses several techniques to make an accurate assessment of the project costs. In practice, using a combination of techniques is your best bet to come up with the most reliable cost estimates. The activity cost estimates will become an input to the Cost Budgeting process, which allows you to establish a baseline for project costs to track against.