Basis of estimates
“Basis of Estimates” is an output for the process “Estimate costs”.
The amount and type of additional details supporting the cost estimate vary by application area. Regardless of the level of detail, the supporting documentation should provide a clear and complete understanding of how the cost estimate was derived.
Supporting detail for activity cost estimates may include:
– Documentation of the basis of the estimate (i.e., how it was developed),
– Documentation of all assumptions made,
– Documentation of any known constraints, – Indication of the range of possible estimates (e.g., ?10,000 (ñ10%) to indicate that the item is expected
to cost between a range of values), and – Indication of the confidence level of the final estimate.
“Basis of Estimates” is an input for the process “Determine budget”.
Supporting detail for cost estimates contained in the basis for estimates should specify any basic assumptions dealing with the inclusion or exclusion of indirect or other costs in the project budget.
This definition was found in the PMBOK V5
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