Cost estimates - Input to Identify Risk

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salman_2005
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Cost estimates - Input to Identify Risk

Postby salman_2005 Sat Oct 20, 2018 2:19 am

Hi Manish,
In identify Risk inputs, in project documents PMBOK mentions Cost estimates and says "ideally expressed as a range, indicating the degree of risk".

The cost estimates are aggregated in determine budget process, so my understanding is that cost estimates are not in range, they are definitive backed by Basis of Estimates document.

Are cost estimates in range? If yes, how the estimated get aggregated in determine budget process?

The same query is applicable to duration estimates as inputs in Identify Risk Process.

Please help understand.

Thank you.

Salman
manishpn
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Re: Cost estimates - Input to Identify Risk

Postby manishpn Sat Oct 20, 2018 6:56 pm

salman_2005 wrote:Hi Manish,
In identify Risk inputs, in project documents PMBOK mentions Cost estimates and says "ideally expressed as a range, indicating the degree of risk".

The cost estimates are aggregated in determine budget process, so my understanding is that cost estimates are not in range, they are definitive backed by Basis of Estimates document.

Are cost estimates in range?
Cost estimates are in range, Cost baseline is not.

If yes, how the estimated get aggregated in determine budget process?
estimations which are done at activity level gets aggregated to work package lavel, control account level and finally project level.


cost estimates which is an input to identify risk should be seen as an input along with basis of estimates.
of certain assumptions are made during the estimation, or certain risks are not taken into consideration, or certain risks not evaluated in right way etc, that ey can be a potential risk/threat to the project

The same query is applicable to duration estimates as inputs in Identify Risk Process.

Same logic should be applied for duration estimates, and it should be seen along with basis of estimates (6.4.3.2)
Please help understand.

Thank you.

Salman
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Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
salman_2005
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Re: Cost estimates - Input to Identify Risk

Postby salman_2005 Sat Oct 20, 2018 7:29 pm

Thank you so much Manish, very helpful.

So the same logic should be applied in estimate resources process? By the same logic, resource requirement should be in range? If in range, then where we get the definite no for resource requirement? Is it in acquire resources process? Just like we get a definitive no in determine budget or develop schedule.

Please clarify.

Thank you.
manishpn
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Re: Cost estimates - Input to Identify Risk

Postby manishpn Sat Oct 20, 2018 7:43 pm

salman_2005 wrote:Thank you so much Manish, very helpful.

So the same logic should be applied in estimate resources process? By the same logic, resource requirement should be in range? If in range, then where we get the definite no for resource requirement? Is it in acquire resources process? Just like we get a definitive no in determine budget or develop schedule.

When schedule is baselined resource requirement are also baselined so there is no range then,
however i mentioned earlier, estimates of resources are based on certain assumptions etc, and that assumptions may not be valid and can pose a risk to project, dont think so much form range basis, but why the estimates are an input to risk identification process.


Please clarify.

Thank you.
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
salman_2005
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Re: Cost estimates - Input to Identify Risk

Postby salman_2005 Sat Oct 20, 2018 7:49 pm

So the main reason of estimates in identify Risk process is to check/verify the assumptions made as these assumptions may be wrong and may contain a risk in them.

So, wouldn't be better if along with these estimates as inputs in this process, we also consider Basis of estimates?

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