Chapter 5, Problem 1RQ

Why are accurate estimates critical to effective project management?

Summary Introduction

To determine:

The reason accurate estimates are significant for an effective project management.

Introduction:

Project management can be effective if the time of delivery of project and the costs involved are estimated accurately. These are estimated in advance to make a baseline for any project.

Explanation of Solution

The accurate estimate is critical to effective management for the following reasons:

• Accurate estimates help in making good decisions,
• Work can be scheduled effectively,
• It helps in determining the timeframe to complete the project and cost of completing the project.
• It helps in determining whether doing the project would be beneficial.
• It can help in determining whether cash flow needs can be developed.
• Helps in determining the progress of the project.
• It helps in developing time phased budgets and helps establish the project baseline.

Also, any inaccurate estimate can lead to false expectations which can result in customer dissatisfaction.