Information Technology Project Management
Information Technology Project Management
8th Edition
ISBN: 9781285452340
Author: Kathy Schwalbe
Publisher: Cengage Learning
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Chapter 7, Problem 4DQ

Explanation of Solution

Example of preparing rough order:

  • In order to provide new mobile devices for 50 people, we can have a cost estimate of around $25,000.
  • It is important to have a detailed and accurate estimation rather than using a rough estimate.
  • A rough order of magnitude estimate can be done 3 or more years earlier before completing the project.
  • In order to take purchasing decisions on any project, we need to make fixed estimates for final project costs.
  • For example, if projects require 1000 mobiles, initially they are planning to buy 50 mobiles in the next few months.
  • For this we need a clear cost estimate for evaluating supplier proposals.
  • The accuracy of this estimate is 5 percent loss or 10 percent more than the definitive estimate.

Examples of using tools or techniques for creating a cost estimate:

We have many tools or techniques to calculate ROM estimate. These tools and techniques are as follows:

Analogous estimate:

It uses the actual cost of mobile devices that have been purchased in any other organization or institutes...

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