Cost Estimate - Order of Magnitude.
5 years 8 months ago #2096
I am reading the email from PMP Formula Guide, about Cost Estimation methods.
I am refering to this paragraph:
For instance you have to be able to say that an estimate that has a range from $75,000 - $175,000 with a target price of $100,000 is an Order of Magnitude estimate.
Just to make sure I understand the logic here !!
The above range, based on $100,000 is -25% to +75%, so the closest matching range is -50% to +50%, and that is why it is Order of Magnitude Estimate (ROM) ?
Appreciate your confirmation ?
I think it will not be easy to find the matching range, and decide the related cost estimation method. Help ?
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