1.Why are accurate estimates critical to effective project management? Accurate estimates are very important because the whole project is based on estimates. With quality estimates, managers will have better sense about how long the project will take and how much the project cost. It is useful for decision making, scheduling, planning, and controlling. Project managers also rely on estimates to determine if the project is worth doing and how well the project is progressing. 2.How does the culture of an organization influence the quality of estimates? The organization culture can significantly influence the quality of estimates. In some organizations, padding estimates are allowed; while other may be strongly discourage padding estimates. Organizations vary in the importance they attach to estimates. 3.What are the differences between bottom-up and top-down estimating approaches? Under what conditions would you prefer one over the other? Top-down estimates usually are derived from someone who use experience and /or information to determine the project duration and total cost. Bottom-up estimates are based on task duration estimates, resource estimates and cost estimates from WBS Work Packages. The bottom-up approach also provided the customer with an opportunity compare the low-cost, efficient method approach with any imposed restrictions. When the project is small or involved with high uncertainty, I will choose top-down estimates. When the customer requires detail information about the project, I will choose bottom-up estimates.
4. What are the major types of costs? Which costs are controllable by the project manager? The major types of costs are direct costs, direct (project) overhead costs, and general and administrative overhead costs. The project manager can control direct costs which include labor costs, materials costs, equipment costs and other.