Estimate Activity Resources Process

Estimate Activity Resources is one of the 42 project management processes outlined in the fourth edition PMBOK®. It’s categorized as one of the six Time knowledge area processes, and one of the twenty Planning processes. The purpose of this process is to examine the project activities and estimate what materials, people, equipment, and supplies are needed and how much is needed. The first thing to obtain is the list of activities and the accompanying information about them. These documents are called the Activity List and Activity Attributes, and they were created in the Define Activities process. Another input needed in order to make the estimations involving people is Resource Calendars, which is an output of the Acquire Project Team process that indicates when people are available. To actually estimate the resources needed for a specific activity, someone who is knowledgeable about the activity can provide an estimate—this is called Expert Judgment. Sometimes there are publications available that indicate what one should expect to pay for certain materials or labor. Utilizing these publications is called the tool and technique of Published Estimating Data. Lastly, an activity may need to be broken down into smaller components whose resource needs can be more accurately estimated. The total resources for these smaller components are simply added together to provide the overall resources needed for that activity. This is called the tool and technique of Bottom-Up Estimating. After the estimations are made, they become the major outputs of this process— Activity Resource Requirements and the Resource Breakdown Structure. Activity Resource Requirements is the documentation of the type and quantities of resources needed for each activity, and the Resource Breakdown Structure illustrates the needed resources in a hierarchical form based on the different categories of resources.

PMP Exam – Cost Estimating Tools and Techniques

So, how much is all this going to cost me? Project Managers must routinely obtain estimates of project and activity costs. The Cost Estimating process (a process in the PMBOK®’s cost knowledge area and planning process group) deals with the task of obtaining reliable estimates for project costs. The Cost Estimating process has three tools and techniques that are specifically meant to obtain cost estimates—Analogous Estimating, Bottom-up Estimating, and Parametric Estimating.

Here are some example of these techniques. The Estemitte family is planning their annual vacation. Mr. Estemitte says that last year’s vacation cost $2,300, so this one should cost about the same. This is an example of Analogous Estimating. Notice that this was a very quick way to obtain a cost estimate and that it may not be highly accurate. If Mrs. Estemitte replies that the cost of travel has increased substantially since last year, and they would obtain a more accurate estimate if they used the vacation expenses of someone who has travelled recently, she is calling into question her husband’s Expert Judgment. Expert Judgment (for example, knowing what vacation or other project to use as a comparison) is critical in order to obtain a cost estimate that has the degree of accuracy needed to be useful.

Mrs. Estemitte breaks down the vacation expenses and obtains costs for lodging, car rental, meals, entertaintainment, souvenirs, and the pet sitter. She totals all these costs at $3,500. This is called bottom-up estimating. Notice that the more detail she uses to break down the vacation activities, the more accurate her estimate is likely to be. Also, it is likely to be more accurate than Analogous Estimating.

The Estemitte family has decided to go to a local all-inclusive resort, which charges $500 (taxes included)/day per family. Travel and other expenses will be miniscule. They want to have 5 days of vacation, so they calculate that the resort will cost about $2,500. This is an example of Parametric Estimating. The cost per unit is multiplied by the quantity of work. Other examples of units of work could be line of code in programming and miles of highway in constuction.