- Year not given
Estimating process and accuracy
Short answer
The relation is shown by the cone of uncertainty: as the project progresses, more information is available, and accuracy improves. Ranges narrow from ROM (-25%/+75%) through budgetary (-10%/+25%) to definitive (-5%/+10%).
What is the relation between estimating process and accuracy? Explain by sketching the required diagram.
The cost estimating process is progressive: as the project advances, more information becomes available, uncertainty falls and the estimate becomes more accurate. The relationship is described by an estimate accuracy (cone of uncertainty) diagram.
Diagram
Estimate
range
+75% |*
| *
+25% | * * *
+10% | * * *
0 |- - - - - - - - - - - - - - - actual cost
-5% | * * *
-10% | * * *
-25% |* *
+------------------------------------->
ROM Budgetary Definitive
(Concept) (Planning) (Execution)
Project progress / time
Simplified form:
Range Wide ---------------> Narrow
Stage Concept -> Planning -> Execution
Type ROM -> Budget -> Definitive
Accuracy -25/+75 -> -10/+25 -> -5/+10
Relation
| Estimating stage | Information available | Accuracy |
|---|---|---|
| ROM | Little: idea, similar projects | Very low (−25% to +75%) |
| Budgetary | Defined scope, rough design | Moderate (−10% to +25%) |
| Definitive | Detailed WBS, vendor quotes | High (−5% to +10%) |
- Uncertainty falls as the project progresses: the estimating range narrows with time.
- Effort versus accuracy: more effort is needed for accurate estimates (detailed WBS, quotes), so accuracy has a cost.
- Early commitments based on ROM estimates are risky.
Practical lessons
- Always state the range or accuracy of an estimate.
- Re-estimate at each phase.
- Keep higher contingency reserves in early phases.
- Do not treat early estimates as fixed budgets.
Example: A mobile app initially estimated at Rs 5-9 lakh (ROM) ends with a definitive estimate of Rs 6.5 lakh after the prototype and requirements are signed off.
✓ Answer checked by Claude Opus 5.5 (high effort)
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