CEP Cost Estimation Techniques & Methods 2

Question 1

Which estimating technique uses the cost of a completed similar project as the primary basis for a new estimate?

Accepted Answer

Analogous estimating

Answer

Analogous estimating relies on historical data from similar past projects to develop a new cost estimate.

Question 2

In a Rough Order of Magnitude (ROM) estimate, what is the typical accuracy range per AACE International?

Accepted Answer

-50% to +100%

Answer

ROM estimates (Class 5) typically carry an accuracy range of -50% to +100% due to limited project definition.

Question 3

What does the term 'should-cost' estimating primarily focus on?

Accepted Answer

What a product or service ought to cost based on analysis of labor, material, and overhead

Answer

Should-cost estimating independently analyzes the elements of cost to determine what a product or service should cost under efficient conditions.

Question 4

A cost estimator applies a cost index of 1.35 to update a 2015 estimate to 2025 dollars. This is an example of which technique?

Accepted Answer

Escalation adjustment

Answer

Escalation adjustment uses published cost indices (e.g., ENR, PPI) to update historical costs to current dollar values.

Question 5

Which method divides a project into its smallest components and estimates each individually before summing to a total?

Accepted Answer

Bottom-up estimating

Answer

Bottom-up estimating builds the total cost by aggregating detailed estimates for each individual work element.

(CEP) Certified Estimating Professional Practice Test