It is the primary element of project cost management, a knowledge area that involves planning, monitoring, and controlling a project’s monetary costs.(Project cost management has been practiced since the 1950s.) The approximate total project cost, called the cost estimate, is used to authorize a project’s budget and manage its costs.It is based only on expert judgment and the costs of similar past projects.
Information is collected for establishments which have at least 50 initial claims for unemployment insurance (UI) filed against them during a consecutive 5-week period to determine the duration, total number of persons separated, the reasons for these separations, and recall expectations.Level 1 is an order of magnitude estimate and Level 5 is a final bid. AACE International (formerly the Association for the Advancement of Cost Engineering) offers a helpful chart summarizing key points.Here’s an overview of the cost estimate categories: Order of magnitude estimates: An order of magnitude estimate, or ASPE Class 5, is an extremely rough cost estimate created before a project has been defined.It is only used in high-level decision making to screen projects and determine which ones are financially feasible.
Intermediate estimates: An intermediate estimate can be created using stochastic or parametric techniques when a project is defined to some limited extent.A cost estimate is more than a simple list of costs, however: it also outlines the assumptions underlying each cost.