There are numerous steps to developing a cost model for cost estimation:
- Identify the project’s scope and the activities that must be done.
- Gather information on the resources (labour, materials, and equipment) needed to complete each activity.
- Estimate the amount and cost of each resource needed for each task.
- Determine the duration of each action as well as the dependencies between them.
- Develop a project schedule based on activity durations and dependencies.
- Create a cost estimate for the project using the resource quantities, costs, and timetable.
- Consult with subject matter experts and stakeholders to review and validate the cost estimate.
- Based on feedback and additional information, refine the cost model as needed.
- As the project continues, use the cost model to create ongoing cost projections.
It is critical to remember that cost estimating is an iterative process, and the cost model should be examined and revised on a frequent basis as new information becomes available.
