Ramon Ecung's Blog

There are a few different ways to estimate in projects but a general rule of thumb is to use the most accurate method available. There’s the rough order of magnitude, top down, budget/engineering.

Rough Order of Magnitude
This type of estimate is of a top level conceptual nature. It is generally used when not many details are known about the phase/sub-project and a numeric cost must be given to the segment. It’s accuracy is between -25% to +75%.

Top Down
The top down estimate is a mid level estimate. It’s used when more details are known and it’s possible to actually begin budgeting for the project. It can be used in the proposal/contractual stages. It’s accuracy is between -15% to +25%.

Budget/Engineering
This is a work package level estimate. It’s possible to provide this level of estimating when you know most if not all of the details involved and is based on the consumption of real effort and resources. It has the best accuracy of all three types of cost estimates, and is generally accurate between -%% to 10%.