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Estimating the cost of a project

Estimating Cost of a Project: Techniques and Examples

Estimating cost is an important process in project management as it is the basis for determining and controlling the project budget. Costs are estimated for the first time at the beginning of a project or even before a project has started. Subsequently, the (re-)estimation of the project cost is repeated on an ongoing basis to …

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Dices illustrating the ambiguity that surrounds rough order of magnitude estimates

What Is the Rough Order of Magnitude (ROM) and How Is It Calculated?

During the project initiation phase (or when you are preparing for a project management exam) you will likely come across the term rough order of magnitude (ROM). The PMI’s Project Management Body of Knowledge refers to the rough order of magnitude as an initial estimate in the “estimate cost” process (source: PMBOK, 6th edition, part …

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Calculator for rough order of magnitude estimate range

Calculator for the Rough Order of Magnitude (ROM) Range

If you are in the initiation phase of a project or studying the PMBOK for your PMP exam you will find this ROM Range Calculator useful. This tool helps you determine the minimum and maximum values of the range of your rough order of magnitude estimate. Introduction to the ROM Calculator There are numerous estimation …

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Title schedule variance

What Is Schedule Variance (SV)? Definition, Formula, Example, Calculator

When you are in the process of controlling the schedule of your project, or when you are preparing for your PMP exam, you will likely make use of the Schedule Variance (SV) at some point. This is one of the key indicators of the variance analysis which is part of the earned value management of …

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Title COst Variance

What Is Cost Variance (CV)? Definition, Formula, Example, Calculator

You probably came across the cost variance (CV) when you had been reading about earned value management and variance analysis. Whether you are controlling the cost of your project or preparing for the PMP exam – being familiar with the CV is essential to master project cost management. This article introduces the concept of cost …

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Internal Rate of Return (IRR) Calculator

IRR Calculator: Internal Rate of Return (IRR) of Projects

The Internal Rate of Return is one of the most common success measures of projects and investments. It is a profitability metric that can be used to assess and compare different project options even if their investment amounts, timeline and cash flow characteristics differ. In project management, it is often used for cost-benefit analyses as …

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Title Three-Point Estimation and PERT

Three-Point Estimating and PERT Distribution (Cost & Time Estimation)

Estimating time, efforts and cost is one of the most critical parts of project management. This is because of the fundamental importance of these estimates for the entire project planning and, in particular, the scope, schedule and cost baseline. One of the estimation techniques suggested in the PMI Project Management Body of Knowledge (PMBOK 6th …

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Three-Point Estimation Calculator – Triangular & PERT Beta Distribution

Three-Point estimating is a common estimation technique in projects that are applying the PMI methodology. While other estimation techniques are often deemed to be more accurate, three-point estimating supplemented with the triangular or beta (PERT) distribution is useful if the experience with or benchmarks of comparable projects are not available. Use this calculator to determine …

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Internal Rate of Return (IRR) vs. ROI – What Are the Differences?

If you are working on a cost-benefit analysis, you will almost inevitably come across ROI and IRR. Return on Investment (ROI) and Internal Rate of Return (IRR) are among the most popular success measures for projects and investments. They are also mentioned in the Project Management Institute’s Body of Knowledge (source: PMBOK, 6th edition, part …

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ROI Title

Return on Investment (Single & Multi-Period ROI): Formulae, Examples, Calculator

Return on Investment is one of the most common indicators used for the cost-benefit analysis. This is probably because of its simplicity and understandability of the information conveyed. In Project Management, it is a success measure suggested by the Project Management Institute (PMI; source: PMBOK, 6th edition, part 1, ch. 1.2.6.4, p. 34). However, the …

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