Project Management: Cost Forecasting
Published Online: 15 DEC 2010
Copyright © 2010 John Wiley & Sons, Ltd. All rights reserved.
Encyclopedia of Aerospace Engineering
How to Cite
Pugh, P. G., Faddy, D. and Curran, R. 2010. Project Management: Cost Forecasting. Encyclopedia of Aerospace Engineering. .
- Published Online: 15 DEC 2010
This article, recognising that a forecast of costs is an essential aid to decision-making at every stage of a project, discusses appropriate methodologies. It describes ‘bottom-up’, ‘top-down’ and intermediate approaches, together with their advantages and disadvantages. It also describes the assembly of a data base of past project costs and the need to express each of them at the same economic conditions by the use of inflation indices. Methods of deriving cost estimating relationships using regression analysis and the assessment of their predictive capability are described.
- cost estimating relationships;
- cost drivers;
- dummy variables;