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Cost Estimation Approach Selection

   

Added on  2019-10-18

5 Pages1118 Words306 ViewsType: 306
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Section:-1Answer: 1(B.)Conditions for using the bottom-up estimate are following:-Any organization which is using bottom-up estimate for measuring the project cost can be inexperienced. In this estimate, less experience is required.Bottom-up approach is mostly suitable only for developing detailed project budgets, schedules and monthly forecasts.Using bottom-up approach by the management requires more time because it is considered a time consuming estimate.Bottom- up approach is based on the collective decision making and seeks to avoid the pitfalls ofchange.Conditions for using top-down estimate:-This estimate is only suitable for those organizations which is experienced.For accurate estimation of the cost, following top-down approach requires that the management of the organization should have knowledge of project pricing.For the top-down estimate smaller-scale installation is considered the best environment.Top-down requires that management of an organization should have market knowledge and clear insight into the details of a project.For condition related to requirement of experience. For SWL, bottom up estimate is preferred because the management of the organization is inexperienced. Bottom-up estimate is the case for RCS project because implementing the bottom-up approach requires less experience from management. Hence, SWL shall use bottom-up estimate under requirement of required experience.For condition related to developing detailed project budgets, schedules and monthly forecasts. Bottom –up approach estimate is preferred because RCS Project management prepare detailed project budgets for which appropriate schedule and monthly forecasts is required, all this can be done by using Bottom- up approach. This is the case for RCS project because management is inexperienced and it need to conduct forecasts and develop schedules. Hence, SWL shall use Bottom-up estimate under the requirement of detailed project budgets and schedules.For condition related to requirement of more time. Bottom-up approach is preferred because it gives accurate estimate after spent more time. This is the case for RCS project because it gives accurate estimates of cost to management. Hence, SWL shall use bottom-up estimate under the condition of requirement of time.For condition related to collective decision making and avoid pitfalls of change. Bottom- up approach is preferred because management is able to develop best decisions because of involvement of large
Cost Estimation Approach Selection_1

number of peoples. This is the case for RCS project because it requires good decision for estimating the project cost. Hence, SWL shall use bottom-up estimate under the requirement of decision making.For condition related to experience. Top up estimate is preferred, when the management of RCS is highly experienced. Top- up estimate require high experience from the management. Top-up approach is not the case of RCS project because the management have no any experience. Hence, SWL shall not use top-up estimate for estimating the cost under the requirement of experience.For condition related to requirement of knowledge related to project pricing. Top- up estimate is preferred when the management is fully experienced and have overall knowledge of project pricing. Top-up estimate is not the case of RCS project because the management is inexperienced and have not any knowledge about the project pricing. Hence, SWL shall not use top-up estimate under the requirement of project pricing knowledge.For condition related to best environment. Top- up estimate is preferred because it provides best environment through smaller-scale installation. Top-up estimate is not the case for RCS project because it needed no any smaller scale installation environment during its working. Hence, SWL shall not use top- up estimate under the requirement of environment.For condition related to market knowledge. Top- up estimate is preferred when the organization have higher knowledge of market. Top-up estimate is not the case for RCS project because the organization is inexperienced and does not have any market knowledge. Hence, SWL shall not use top-up estimate under the requirement of market knowledge.Answer 2:-a.Advantages of outsourcing the work to the Tron AG implementation team are following:-Expertise: - most of the times the organization outsourced their tasks to vendors who specialize in their field. Due to the appointment of Tron AG, RCS project may utilize the expert services. This will enhance the success chance of the RCS project.Reduced cost: - hiring the expert services reduced the wastage of resources, due to which it helps the organization in cost saving. This leads the development of the project in a structured budgeted amount.b.The best practices for managing Tron AG are following:-Well defined requirements and procedures: - SWL defined all the requirements and procedures to the consultancy Tron AG, this will improve their work quality without raising any confusion.Build respect and trust: - SWL organization must be open, fair, and honest throughout the project. By being open and trusting, both SWL and Tron AG foster a good relationship. This reduced any unpleasant surprises, restrain from changes, and disobey rules, which are common problems in outsourcing.Establish common objectives: - Establishing the common objective for both the parties, helps in doubling the efforts for achieving the predetermined objective.Answer 3
Cost Estimation Approach Selection_2

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