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1. Why are estimates often wrong?
They are based upon the previous year or project which did not go well.
The estimate is determined by senior management and not the people in the department or project.
They are based upon assumptions, some of which are not valid.
2. When creating a department budget estimate, what is the normal starting point?
The business strategy and objectives.
The budget or actuals from the preceding year.
The starting point is “0” and the department must provide a rationale for any estimate they develop.
3. What is the normal starting point for a project budget estimate on a new project?
The project boundaries of scope, schedule and resources needed to complete the project objective.
The average of the last five preceding projects.
The budget or actuals for the project from the preceding year.
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