Answered: what are the fundamental and…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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what are the fundamental and integtrated approaches to cost estimation and describe them

Expert Solution

Step 1 - Introduction

Cost estimation is an important component in project management as every project would have a specifically defined budget and it is one of the objectives to finish the project within the budget. Cost estimation is a part of the planning process in a project when different analyses are made. For example, during hiring, laborers' cost estimation is necessary related to wage or salary of workers, if a machine gets breakdown cost estimation is necessary to determine whether to purchase a new machine or repair the current one, etc. In this manner, cost estimation can be a short or long process depending on the process.