let's learn about estimate costs in this video estimate costs is the process of developing an approximation of the monetary resources needed to complete project activities the key benefit of this process is that it determines the amount of cost required to complete project work cost estimates should be reviewed and refined during the course of the project to reflect additional detail as it becomes available and assumptions are tested for example the project in the initiation phase may have a rough order of magnitude estimate in the range of minus 25% to + 75 % later in the project as more information is known definitive estimates can narrow the range of accuracy to minus 5 percent to plus 10% the techniques for estimating the cost involved in performing each of the project activities are the same as estimating the timer let's see the input tools and techniques and output of estimate costs process here the inputs cost management plan the cost management plan defines how project costs will be managed and controlled it includes the method used in the level of accuracy required to estimate activity cost human resource management plan the human resource management plan provides project staffing attributes personnel rates and related rewards recognition which are necessary components for developing the project cost estimates scope baseline project schedule the type and quantity of resources and the amount of time which those resources are applied to complete the work of the project our major factors in determining the project cost risk register the risk register should be reviewed to consider risk response costs risks which can be either threats or opportunities typically have an impact on both activity and overall project costs enterprise environmental factors organizational process assets next let's have a look at tools and techniques used in this process expert judgment expert judgment guided by historical information provides valuable insight about the environment and information from prior similar projects analogous estimating analogous cost estimating uses the values such as scope cost budget and duration or measures of scale such as size weight and complexity from a previous similar project as the basis for estimating the same parameter or measurement for a current project parametric estimating parametric estimating uses a statistical relationship between relevant historical data and other variables to calculate a cost estimate for project work bottom up estimating bottom up estimating is a method of estimating a component of work three-point estimating reserve analysis cost estimates may include contingency reserves to account for cost uncertainty cost of quality assumptions about costs of quality may be used to prepare the activity cost estimate project management software project management software applications computerized spreadsheets simulation and statistical tools are used to assist with cost estimating vendor bid analysis cost estimating methods may include analysis of what the project should cost based on the responsive bids from qualified vendors group decision-making techniques team based approaches such as brainstorming the Delphi or nominal group techniques are useful for engaging team members to improve estimate accuracy and commitment to the emerging estimates now let's see the output of this process activity cost estimates activity cost estimates are quantitative assessments of the probable costs required to complete project work basis of estimates the amount and type of additional details supporting the cost estimate vary by application area project documents updates project documents that may be updated include but are not limited to the risk register is helpful if you liked this video please hit the like button and share your comments stay subscribed for more knowledge sharing videos thank you for watching this video