Estimating cost means developing the approximate cost of completing the entire project or part of it. It is the expected quantitative result. When we estimate the cost of doing a project, we are estimating the amount of money that it will take to complete the entire project.
In addition to the project completion cost, we may frequently include the life cycle cost as well. Normally the cost of the project includes only the amount of money that will be spent by the project team up until the time the completed project is turned over to the client and the stakeholders. Life cycle cost includes the cost of the project that continues after delivery of the project throughout the useful life of the project. Although the project team will be concerned with the cost of the project up until the time of delivery, many of the decisions it makes will affect life cycle cost and should be discussed with management and the stakeholders and shown in the project justification.
The selling price minus the cost of the project is equal to the profit of the project.
Selling price is the amount of money the organization will charge to deliver the project. This may be more or less than the cost of the project. The price of a project should be equal to the perceived value to the customer. The value to the customer is generally what money the project will generate for the customer and has little to do with what it costs to produce the project.
In addition to the project completion cost, we may frequently include the life cycle cost as well. Normally the cost of the project includes only the amount of money that will be spent by the project team up until the time the completed project is turned over to the client and the stakeholders. Life cycle cost includes the cost of the project that continues after delivery of the project throughout the useful life of the project. Although the project team will be concerned with the cost of the project up until the time of delivery, many of the decisions it makes will affect life cycle cost and should be discussed with management and the stakeholders and shown in the project justification.
The selling price minus the cost of the project is equal to the profit of the project.
Selling price is the amount of money the organization will charge to deliver the project. This may be more or less than the cost of the project. The price of a project should be equal to the perceived value to the customer. The value to the customer is generally what money the project will generate for the customer and has little to do with what it costs to produce the project.