Essay On The Importance Of Cost Estimating

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Cost estimating can be defined as the process of calculating the cost of the required resources needed to complete the project work. While doing the estimating the possible fluctuations, conditions and other causes of variance must be consider so that total cost of estimate will not affect.
To calculate cost estimates for each activity cost estimate uses the resource requirements, resource cost rates and the activity duration estimates. Estimating publications, historical information, and risk information are used to determine which methods and strategies would yield the most accurate estimates. The most challenging tasks that project managers must faces is Estimating the effort, time, and resources needed to complete project activities . This is because of the integral uncertainty associated with many activities. All projects are unique, which often creates uncertainty, uncertainty because the activity is unique to the project or the activity is being completed by a resource that is not a practiced expert or the interaction of this activity with other project activities is unique in this project. All of these can create problems while estimating effort, time or resources.
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In most construction projects the major costs relate to raw material. In this case, knowledge of the rates (including transportation) of the material required on the project, and being able to accurately estimate the quantity needed and the time necessary to complete the work will produce a fairly accurate project cost estimate. Unfortunately, this is not very simple since most project estimates are derived by summing the estimates for individual project elements like labour and manpower

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