Budget estimate: Difference between revisions

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{{infobox4
|list1=
<ul>
<li>[[Determining the length of the production cycle]]</li>
<li>[[Baseline schedule]]</li>
<li>[[Cost model]]</li>
<li>[[Independent demand]]</li>
<li>[[Project environment]]</li>
<li>[[Critical path method]]</li>
<li>[[Property portfolio]]</li>
<li>[[Double counting]]</li>
<li>[[Competency modeling]]</li>
</ul>
}}
A '''budget estimate''' in [[project]] [[management]] is a prediction of the [[financial resources]] (such as [[money]], materials, and personnel) that will be required to complete a project. It is an important tool for determining the feasibility of a project and for creating a [[plan]] for allocating resources. A budget estimate may be developed using a variety of techniques, such as historical data, expert judgment, or mathematical models. It is typically reviewed and updated regularly throughout the project to ensure that resources are being used effectively and that the project is on track to meet its financial goals.
A '''budget estimate''' in [[project]] [[management]] is a prediction of the [[financial resources]] (such as [[money]], materials, and personnel) that will be required to complete a project. It is an important tool for determining the feasibility of a project and for creating a [[plan]] for allocating resources. A budget estimate may be developed using a variety of techniques, such as historical data, expert judgment, or mathematical models. It is typically reviewed and updated regularly throughout the project to ensure that resources are being used effectively and that the project is on track to meet its financial goals.


==Types of budget estimates==
==Types of budget estimates==
There are several types of budget estimates that can be used in [[project management]], including:
There are several types of budget estimates that can be used in [[project management]], including:
* Bottom-up estimate: This type of estimate is created by breaking down the project into smaller, more manageable components and estimating the [[cost]] of each component individually.
* '''Bottom-up estimate''': This type of estimate is created by breaking down the project into smaller, more manageable components and estimating the [[cost]] of each component individually.
* Top-down estimate: This type of estimate is created by starting with an overall project cost and then breaking it down into smaller components.
* '''Top-down estimate''': This type of estimate is created by starting with an overall project cost and then breaking it down into smaller components.
* Analogous estimate: This type of estimate is created by using the cost of a similar past project as a starting point.
* '''Analogous estimate''': This type of estimate is created by using the cost of a similar past project as a starting point.
* Parametric estimate: This type of estimate is created by using mathematical models and statistical data to estimate the cost of a project.
* '''Parametric estimate''': This type of estimate is created by using mathematical models and statistical data to estimate the cost of a project.
* Three-point estimate: This type of estimate is created by developing three different cost estimates for a project: best-case, most likely, and worst-case scenarios.
* '''Three-point estimate''': This type of estimate is created by developing three different cost estimates for a project: best-case, most likely, and worst-case scenarios.
* Three-point estimate (PERT): This type of estimate is similar to Three-point estimate, but it uses a probability distribution to estimate the cost.
* '''Three-point estimate (PERT)''': This type of estimate is similar to Three-point estimate, but it uses a probability distribution to estimate the cost.
* Reserve analysis: This type of estimate is created by adding a contingency fund to the budget, which can be used to cover unexpected expenses.
* '''Reserve analysis''': This type of estimate is created by adding a contingency fund to the budget, which can be used to cover unexpected expenses.


It's important to note that there is no one-size-fits-all approach to budget estimates, and the appropriate [[method]] may depend on the specific project, [[organization]], and [[industry]].
It's important to note that there is no one-size-fits-all approach to budget estimates, and the appropriate [[method]] may depend on the specific project, [[organization]], and [[industry]].
{{infobox5|list1={{i5link|a=[[Project schedule]]}} &mdash; {{i5link|a=[[Software cost estimation]]}} &mdash; {{i5link|a=[[Activity network diagram]]}} &mdash; {{i5link|a=[[Program manager]]}} &mdash; {{i5link|a=[[Linear programming]]}} &mdash; {{i5link|a=[[Construction cost estimate]]}} &mdash; {{i5link|a=[[Duration of the project]]}} &mdash; {{i5link|a=[[Process decision programme chart]]}} &mdash; {{i5link|a=[[Baseline schedule]]}} }}


==References==
==References==
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* Oberlender, G. D., & Oberlender, G. D. (1993). ''[http://sutlib2.sut.ac.th/sut_contents/63067.pdf Project management for engineering and construction]'' (Vol. 2). New York: McGraw-Hill.
* Oberlender, G. D., & Oberlender, G. D. (1993). ''[http://sutlib2.sut.ac.th/sut_contents/63067.pdf Project management for engineering and construction]'' (Vol. 2). New York: McGraw-Hill.
* Kwak, Y. H., & Ingall, L. (2007). ''[https://scholar.archive.org/work/5zyhejwasndirasrdx7g3jcrym/access/wayback/http://home.gwu.edu:80/~kwak/Monte_Carlo_Kwak_Ingall.pdf Exploring Monte Carlo simulation applications for project management]''. [[Risk]] management, 9(1), 44-57.
* Kwak, Y. H., & Ingall, L. (2007). ''[https://scholar.archive.org/work/5zyhejwasndirasrdx7g3jcrym/access/wayback/http://home.gwu.edu:80/~kwak/Monte_Carlo_Kwak_Ingall.pdf Exploring Monte Carlo simulation applications for project management]''. [[Risk]] management, 9(1), 44-57.


[[Category:Project management]]
[[Category:Project management]]

Latest revision as of 17:34, 17 November 2023

A budget estimate in project management is a prediction of the financial resources (such as money, materials, and personnel) that will be required to complete a project. It is an important tool for determining the feasibility of a project and for creating a plan for allocating resources. A budget estimate may be developed using a variety of techniques, such as historical data, expert judgment, or mathematical models. It is typically reviewed and updated regularly throughout the project to ensure that resources are being used effectively and that the project is on track to meet its financial goals.

Types of budget estimates

There are several types of budget estimates that can be used in project management, including:

  • Bottom-up estimate: This type of estimate is created by breaking down the project into smaller, more manageable components and estimating the cost of each component individually.
  • Top-down estimate: This type of estimate is created by starting with an overall project cost and then breaking it down into smaller components.
  • Analogous estimate: This type of estimate is created by using the cost of a similar past project as a starting point.
  • Parametric estimate: This type of estimate is created by using mathematical models and statistical data to estimate the cost of a project.
  • Three-point estimate: This type of estimate is created by developing three different cost estimates for a project: best-case, most likely, and worst-case scenarios.
  • Three-point estimate (PERT): This type of estimate is similar to Three-point estimate, but it uses a probability distribution to estimate the cost.
  • Reserve analysis: This type of estimate is created by adding a contingency fund to the budget, which can be used to cover unexpected expenses.

It's important to note that there is no one-size-fits-all approach to budget estimates, and the appropriate method may depend on the specific project, organization, and industry.


Budget estimate — recommended articles
Project schedule — Software cost estimation — Activity network diagram — Program manager — Linear programming — Construction cost estimate — Duration of the project — Process decision programme chart — Baseline schedule

References

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