What’s in cost estimate? We often read a lot about cost estimates in the news- One
recent discussion from the governmental sector is the cost estimate for the upcoming
2020 Census (you can read a quick discussion here (Links to an external site-)Links to
an external site-)- But what goes into making these cost estimates? Think about a cost
estimate that you must make in you role (or if you are fortunate to not have to make
cost estimates, find an article that discusses one) and answer the following in you
post. If you are using an article, you may need to make assumptions to answer these
questions – just state those assumptions in you post- Describe the process you use
to make you estimate. How does you process compare to the methods you learned
about in Chapter 2? Are there changes you would like to make to the estimation
process? How accuate are you estimates? How could you improve you estimate’s
accuacy? Example: In my role, I do not make cost estimates- Thus, I found the
articles attached below pertaining to a cost estimate for The California Water Fix- This
Water Fix is a multi-billion dollar proposal for building huge tunnels to re-route
Sacramento River water under the Sacramento-San Joaquin Delta- This plan would
improve water quality and increase quantity of water available to farms and homes
that are short on a quality water supply. A cost estimate is being done to predict the
degree to which this proposal would increase the average homeowner‘s monthly
payments to cover the cost- Based on the technical report from the Office of Public
Accountability (second souce listed below), I assume the cost estimate is calculated
using a complex regression method- Figue 1 in the article illustrates the many factors
that affect the cost of the Water Fix project, including project costs, variable revenues,
and fixed revenues- This cost estimate predicts an additional $1 -73 to $5 on top of an
average $60 monthly water bill. The lower estimate is based on the expectation that
reliance on the Water Fix supply will diminish significantly as time passes- This cost
estimate process is likely very different than the methods discussed in Chapter 2,
since there are many more factors to consider.
