prisestimat

Pris est imate is an estimate of the expected price of a good, service, or project, prepared to support budgeting, procurement, and decision making. It reflects forecasted costs based on scope, market conditions, and available data, rather than a fixed quote. The estimate may be revised as more information becomes available.

Common estimation methods include bottom-up costing, top-down budgeting, parametric models using cost drivers, analogical estimates based on similar completed work, vendor quotes, and probabilistic methods such as Monte Carlo simulation. In practice, many projects combine several approaches to improve accuracy.

The estimation process typically involves defining the scope, selecting an estimation method, gathering data (prices, labor rates, material costs, risk allowances), computing the estimate, and documenting assumptions. A contingency or risk allowance is often added to cover uncertainties or potential price changes.

The precision of a prisestimat depends on the project stage, data quality, and market volatility. Rough estimates can have wide ranges, while definitive estimates for well-defined endeavors can be much tighter. Early-stage estimates should be treated as planning tools rather than binding commitments.

Used in construction, manufacturing, software development, and public procurement, prisestimat helps compare options, allocate funds, and set schedules. Estimation is inherently uncertain and can be affected by scope changes, inflation, currency fluctuations, and unforeseen costs; regular review and update are essential.

See also: cost estimate, budgeting, tender, quotation, inflation, contingency.