How to Estimate Project Costs: A Method for Cost Estimation

The video tutorial discusses the challenges of estimating project costs, emphasizing the 'estimating knife edge' that project managers face between minimizing costs and including contingencies. It introduces the work breakdown structure as a tool for cost estimation and identifies key cost sources like people, real estate, and materials. Six estimating techniques are covered, including order of magnitude and parametric forecasting. The video also suggests using red teams and adding contingencies to improve estimates, and concludes with integrating estimates into cash flow and business cases.

What is the estimating knife edge in project management?

What is the fundamental tool for building a cost estimate?

What are some of the major sources of cost that should be included in a project estimate?

Describe the order of magnitude estimate method.

What is reference class forecasting and how is it used in estimating?

Explain parametric forecasting in the context of project estimation.

What role do bids or tenders play in project cost estimation?

How can catalogues and pricing tables assist in estimating project costs?

What is the importance of adding contingency to project estimates?

How does a discounted cash flow relate to project cost estimation?