Time and cost estimates are very important components in planning and executing’a0any project. Estimating is the process of forecasting or approximating the time and cost of completing deliverables. Time is the the duration needed to complete the project while Cost is the estimated amount of money that will be required to complete the project. Cost involves things like resources, labor, materials, rates for contractors and so on. All project stake holders expect accurate time and cost estimates. Inaccurate estimates lead to false expectations and consumer dissatisfaction. Cost, time and budget estimates are the lifeline for control. They serve as standard for comparison of actual and plan through the life of the project. Time and cost estimates are needed to support good decision, schedule work, to determine how long the project should take and its cost, to determining how well the project is progressing and to develop time-phased budget and establish project baseline. Two factors that could have an impact on time and cost estimate will include: Planning horizon: The quality of the estimates depends on the planning horizon.Estimates of current events are closed to 100% accurate but are reduced for distant events. The accuracy of time and cost estimates should improve as you move from the conceptual phase to the point where individuals work packages are defined. Long duration projects increase the uncertainty in estimates. Padding estimates; Padding estimates means making little increases or pads to estimates to reduce risk. The project duration and costs will be seriously over stated when little pads or increases are added to reduce risk. Such game reduces the chances for a realistic estimates which is needed to be competitive. Human or people factor: The people factor can influence the quality of time and cost estimates. For examples accuracy of estimates depends on the skills of the people making estimates. How familiar are they with the task they estimating? Project duration: Sometimes poorly written scope specifications results in errors in estimating time and costs. For my construction project factors like site conditions, project schedule, inflation, quality of plan and specifications, regulatory requirements etc can impact time and cost estimates. For example a good construction plan and specifications reduces the construction time and cost by proper execution at site without delay. A poorly drawn plan cause confusion and can result in higher construction cost. Again the duration of the project affects the time and costs estimates. Increase in project duration can increase costs due to increase in direct costs. Therefore project schedules need to be considered during project cost estimation. Project estimating is a complex process but most done with some degree of accuracy.
References:
Gray,C., & Larson, E.,(2014). Project Management: The Managerial Process (6th ed.). Boston,MA., Mcgraw-Hill.
Factors affecting construction cost estimates retrieved from https://www.theconstructor.org
