Chapter $5$ Estimating Project Times and Costs

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management estimate; this represented about a $20$ percent overrun! Furthermore, the bottom$-$up time estimate based on the project network was four months longer than the top management time estimate. Another meeting was scheduled with the significant stakeholders to check the estimates and to brainstorm for alternative solutions. At this meeting everyone agreed the bottom$-$up cost and time estimates appeared to be accurate. Following are some of the suggestions from the brainstorming session.

Change scope.

Outsource technology design.

Use the priority matrix $($found in Chapter $4)$ to get top management to clarify their priorities.

Partner with another organization or build a research consortium to share costs and to share the newly developed technology and production methods.

$x$ Cancel the project.

Commission a break$-$even study for the laser printer.

Very little in the way of concrete savings was identified, although there was consensus that time could be compressed to the market launch date, but at additional costs.

Lauren met with the marketing $($Connor$),$ production $($Kim$),$ and design $($Gage$)$ managers, who yielded some ideas for cutting costs, but nothing significant enough to have a large impact. Gage remarked, "I wouldn't want to be the one to deliver the message to top management that their cost estimate is $$1,250,000$ off! Good luck, Lauren."

At this point, what would you do if you were the project manager?

Was top management acting correctly in developing an estimate?

What estimating techniques should be used for a mission$-$critical project such as this?