chapter  8
Successful Project Cost Estimating
WithJoseph Eli Kasser
Pages 22

This chapter explains that there is always a cost to develop a product. Exceeding cost is one of the characteristics of failed projects. Consequently, it is important to get the right cost estimate for the project. Estimating the costs of a project is initially performed in the project initialization and project planning states, a time when information is limited and may not be accurate. The contribution of conceptual design to cost (CDTC) is to increase the accuracy of cost estimates during the conceptual design stage of a new product. CDTC recognizes that in the project initialization state of a project, the estimates are approximate and so it makes use of the Pareto principle to simplify and reduce the time taken to create the estimates. If the estimated cost added to the expected return on investment for the project is less than equal to the target price, there is no need to adjust the cost estimate.