Estimating Practice Exam

What is a common risk of relying solely on price per unit estimating?

1. It is very time-consuming.

2. It lacks precision.

3. It requires extensive data.

4. It is cost prohibitive.

The correct answer is: It lacks precision.

Relying solely on price per unit estimating can lead to a lack of precision in project estimating. This method typically involves applying an average cost per unit to a project without considering variables such as project-specific conditions, design requirements, or external factors that might impact costs. Each project can have unique characteristics that influence the actual costs, such as location, material availability, and labor market conditions. By ignoring these factors and relying solely on generalized unit prices, the resulting estimates may not accurately reflect the true costs associated with the project, ultimately leading to budget overruns or insufficient funding. While other options might discuss issues related to time, data requirements, and cost, the specific risk of imprecision is a significant concern in the context of using unit pricing alone. This highlights the importance of a more comprehensive approach to estimating that incorporates detailed analysis, allowing for more accurate and reliable project budgeting.