Estimating Practice Exam

Once design is underway, which estimate allows for the establishment of budget amounts for project elements?

1. Conceptual estimate

2. Detailed estimate

3. Preliminary estimate

4. Unit-price estimate

The correct answer is: Preliminary estimate

The choice of the preliminary estimate is accurate because it serves as a critical step in the project management process that occurs after the design phase begins. A preliminary estimate provides a general review and an early projection of the project costs, allowing project stakeholders to establish budget amounts for various elements. This estimate takes into account the conceptual designs and initial inputs regarding materials, labor, and schedules. Utilizing this estimate helps in identifying potential financial constraints and ensures that the project remains aligned with available budget resources. It provides a framework for making informed decisions as the project continues to develop, which is crucial for effective project management. In contrast, a conceptual estimate is typically less detailed and used during the early stages of planning to provide a broad overview of potential costs, while a detailed estimate provides a comprehensive breakdown of costs after thorough analysis and once design details are finalized. Lastly, a unit-price estimate focuses on costs based on known unit prices of various work items, applicable when more detailed data is available, making it less suitable for budget establishment during the early design phase.