Assingment 4

Assignment 4
Project Management
You are overseeing a project to renovate a historic building into a boutique hotel. The project
involves multiple activities such as structural repairs, interior redesign, electrical upgrades, and
landscaping. Your role is to estimate the project costs to ensure the budget is sufficient and
aligned with the project's scope.
Assignment Questions:

1. Based on the case study, explain the difference between rough order of magnitude (ROM) and definitive estimates. Which type of estimate would you use during the initial planning of the hotel renovation project, and why?
2. Identify and describe two cost estimation techniques (e.g., analogous estimating, parametric estimating, bottom-up estimating) that you would apply to the case study project. Justify your choice for each technique in the context of the renovation project.
3. From the case study, distinguish between direct costs (e.g., materials, labor) and indirect costs (e.g., administrative overhead, permits). Provide examples of each type of cost that might arise in the hotel renovation project.
4. Explain the role of contingency reserves in the cost estimating process. Based on the case study, identify two potential risks that might impact the project's costs (e.g., unexpected structural damage, delays due to weather). How would you account for these risks in your cost estimate