---
title: "Estimating process and accuracy"
subject: "ICT Project Management"
chapter: 9
key: "semester_7/ict_project_management:estimating-accuracy-diagram"
source: https://www.bctengineer.com/q/semester_7/ict_project_management/estimating-accuracy-diagram
site: BCT Engineering
---

# Estimating process and accuracy

ICT Project Management · Chapter 9: Project Cost Management

- Asked in: year not given
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/ict_project_management/estimating-accuracy-diagram
- Whole chapter: https://www.bctengineer.com/md/semester_7/ict_project_management/chapter-9

## Question

What is the relation between estimating process and accuracy? Explain by sketching the required diagram.

## 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%).

## Answer

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
```text
 Estimate
 range
 +75% |*
      |   *
 +25% |      *  *  *
 +10% |                *  *  *
    0 |- - - - - - - - - - - - - - - actual cost
  -5% |                *  *  *
 -10% |      *  *  *
 -25% |*  *
      +------------------------------------->
        ROM        Budgetary    Definitive
       (Concept)   (Planning)   (Execution)
                Project progress / time
```

Simplified form:
```text
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.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. How does estimate accuracy relate to project progress?
   A. Accuracy is constant
   B. Accuracy improves and the range narrows as the project advances
   C. Range widens with time
   D. Accuracy worsens with time
   Answer: B. More information reduces uncertainty, so the estimating range narrows. (Key point: Relation)

2. Which order shows estimates from least to most accurate?
   A. ROM, definitive, budgetary
   B. Definitive, budgetary, ROM
   C. Budgetary, ROM, definitive
   D. ROM, budgetary, definitive
   Answer: D. ROM is least accurate, definitive the most. (Key point: Estimate stages)

3. What practical lesson follows?
   A. Use lower reserves early
   B. Always state the range and re-estimate at each phase
   C. Treat early estimates as fixed budgets
   D. Avoid re-estimation
   Answer: B. Early estimates should not be treated as fixed; reserves are higher early. (Key point: Practical lesson)

## Related in ICT Project Management

- [Project driven processes with diagram](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aproject-driven-processes) — ICT Project Management, chapter 6

## Related in other subjects

- [Estimating, purpose and data required](https://www.bctengineer.com/question.md?key=semester_7%2Festimating_and_costing%3Aestimating-purpose-data-required) — Estimating and Costing, chapter 1, asked 6×
- [Boost regulator relation; SMPS block diagram](https://www.bctengineer.com/question.md?key=semester_4%2Fadvanced_electronics%3Aboost-derivation-smps-block) — Advanced Electronics, chapter 8
- [Diffusion process and Einstein relation](https://www.bctengineer.com/question.md?key=semester_3%2Felectrical_engineering_material%3Adiffusion-einstein-relation) — Electrical Engineering Material, chapter 6, asked 9×
- [Estimated cost never actual; data required](https://www.bctengineer.com/question.md?key=semester_7%2Festimating_and_costing%3Aest-cost-never-actual-data) — Estimating and Costing, chapter 1