Working Top-Down: Cost Estimating before Development Begins

The present state of the art of cost estimating is reviewed with particular reference to its employment in connection with strategic decisions such as whether to launch a major project or not and, hence, when information concerning the project is limited and/or incomplete. The processes of ‘top-down’ cost estimating are described in sequence, starting with the gathering of data and its analysis followed by the formulation of costing assumptions and the derivation of cost-estimating relationships and ending in the application of those to yield cost estimates for the project in question. At each stage, the description is accompanied by practical advice and warnings of some common pitfalls.