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ROM (Rough Order of Magnitude) Question

A Project Manager who has just been assigned to a new project has been asked by his sponsor to come up with an initial cost estimate called a Rough Order of Magnitude (ROM). This would typically fall in which range?
SELECT THE CORRECT ANSWER


-50% to +100%

-25% to +75%

-10% to +15%

-100% to +50%

Correct Option:B

EXPLANATION

The Rough Order of Magnitude estimate (ROM) is usually done in the initial stages of the project, when limited information is available. The budgeted estimate will be in the range of -10% to +25%, and the definitive estimate will be in the range of -5% to +10%.


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Can someone go over this questions with me? I never went over ROM in my online class and I looked it up in the PMBOK on Page 241 but it only listed the answer as -25% to +75% but didn't really give an example and the explanation of the answer for the problem doesn't help me much ..
 

NESTOR_1

Active Member
at the beginning of the project , we have a higt level estimation because of uncertainties, it's why the range of cost is so big..it means your estimation is neither precise and accurate.However with time you will have more information and reduce you estimation gap...from -5 to +10
 

tim jerome

Well-Known Member
Trainer
Thanks, Nestor. Another approach is thinking "$10 MM Project." It'll cost you about $65,000 to develop the charter (example - should we or should we not build a data center?), and will cost about $500k and 7 1/2 months to develop a plan. Therefore, in the charter, you're looking at 'bigger than a breadbox, smaller than a mini-bus' mindset. You can have a broader range in estimate, because you won't plan against it, but use it as a defining expectation in planning, but more importantly, use that expectation in your feasibility (do we need to take out a loan?) and your benefits-costs.
 
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