Calculating a project budget is challenging because clients want high functionality at low cost, while staff want high profits, placing the project manager in the middle. To estimate costs, the project manager must define the scope, schedule, and provide details to staff using methods like expert judgment, analogous estimating, bottom-up estimating, and reserve analysis to justify costs and explain risks to clients.

1. http://fearnoproject.com/
2010/12/23/estimating-
project-costs/

2.  Calculating a project budget is not
straightforward
 A project budget is established by
calculating the cost of every task
 But the problem is at the clients, the clients
want much functionality at the lowest cost
possible
 And another problem is the development
and sales staff who want the highest profit
possible
 The project manager is in the middle of this
conflict

3. in order to begin
has to begin with
estimating the cost
the project scope –
has to provide the
this may need
project schedule
addition of design
and information to
detail
the staff
The
Project
Manager

4.  We have the following estimating
methods according to PMBOK:
› Expert judgement
› Analogous estimating
› Parametric estimating
› Bottom up
› Three point estimating
› Reserve analysis
› Cost of quality

5. has to justify
costs and
explain risks in
non-technical
terms
The
Project
Manager
has to be able
has to to reduce the
document his scope in order
assumptions to lower the
budget