Three types of estimates: Ballpark, budgetary, and definitive - Running a Design Business: Pricing and Estimating Video Tutorial | LinkedIn Learning, formerly Lynda.com (2024)

FAQs

What are the three basic types of cost estimating? ›

The three types of cost estimates are design, bid, and control estimates. Design estimates are prepared in the project preliminaries which gives the order of magnitude of the project cost.

Types of cost estimates in construction: Preliminary, detailed, quantity, bid. Methods include historical, parametric, bottom-up. Historical is least accurate, parametric uses per unit rates, bottom-up starts with basic work.

A ballpark figure is a rough numerical estimate or approximation of the value of something that is otherwise unknown. Ballpark figures are commonly used by accountants, salespersons, and other professionals to estimate current or future results.

The actual cost method is probably the most accurate cost estimating method when the data is available.

In this multifaceted domain, four primary types of estimating emerge as cornerstones for professionals: Preliminary Estimate, Detailed Estimate, Quantity Estimate, and Bid Estimate.

What is a definitive estimate? ›

Definitive Estimate

It's made after the project's scope and requirements are well-defined and detailed. It includes a comprehensive breakdown of all costs, including labor, materials, equipment, and other expenses, and has an accuracy range of -5% to +10%.

This idiom originates from the game of baseball. The ball park has a set number of seats. On the day of the game, the commentator would estimate the number of people attending the game. That estimated figure became known as the ball park figure.

This strategy involves eliminating wrong answer choices and estimating the right answer by doing some approximate calculations. To 'ballpark' is to roughly approximate.

Informal. being an approximation, based on an educated guess: Give me a ballpark figure on our total expenses for next year.

Bottom-up Estimating – Important Points to remember

It can be used to estimate resources for activities. Bottom-up estimates are more accurate. Bottom-up estimating requires the maximum amount of time to estimate compared to all other estimating techniques.

This means we must analyze mixed costs to determine their fixed and variable components. There are three methods commonly used to analyze these costs: scatter diagrams, the high-low method, and regression analysis (least-squares regression).