ROM estimate

Submitted by vijayavadrevu on Sat, 05/11/2013 - 13:47

 The cost of a project is estimated to be $1,000,000. As project manager you determine that a contingency reserve of 10% and a management reserve of 8% should be sufficient. What is the Rough Order of the Magnitude estimate for the project's total cost?

A)$100,000 to $110,000

B)$80,000 to $1,180,000

C)$590,000 to $2,360,000

D)$590,000 to $1,180,000

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crushPMP

Sat, 05/11/2013 - 18:54

 C?

cnpatilpmp2012 (not verified)

Sat, 05/11/2013 - 19:09

ROM would be around -50% to +100%. So by using the elimination theory none of the are near to this figure of +100...so it should be C.


Regards


CN Patil


 

sanskrit

Sat, 05/11/2013 - 21:52

C? 

abdsal

Sun, 05/12/2013 - 06:09

Reserves are added after estimation

 

project cost estimate: 1000 000

 

ROM= -50% to +100 %

 

Lower range = -50%

50% of 1000 000 + cont reserve+ man.reserve

500000+(500000*.08)+(500000 *0.1)= 590 000

 

Upper range = +100%= total 200%

 

200% of 1000000+ cont reserve+ man.reserve

 

2000 000 +( 200000*.08+200000*0.1)

= 2,360,000

 

( But still doubt persists  as rita says ROM is -50 to + 50) which is correct?)

 

 

 

 

 

 

BK

Sun, 05/12/2013 - 15:51

 ROM is -+50% as per PMBOK, Am I missing something?

vijayavadrevu

Tue, 05/14/2013 - 14:53

 As per PMBOK it is given as +- 50% where as as per one of the PMP math books, it is given as -50 to +100%. Hence posted this question for clarification