Why is a +/- notation necessary when developing an estimate?

A major theme park is expanding the existing facility over a five-year period. The design phase will be completed one year after the contract is awarded. Major engineering drawings will be finalized two years after the design contract is awarded and construction will begin three years after the award of the design contract. New, unique ride technology will be used and an estimate will need to be developed to identify these costs that have no historical data.

The following question requires your selection of CCC/CCE Scenario 26 (2.5.50.1.2) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

Why is a +/- notation necessary when developing an estimate?
A . Contingency cushion
B . It makes up for the lack of time to develop a real estimate
C . It is a government requirement
D . There are unknowns that affect the final cost of a project

View Answer

Answer: D

Explanation:

The +/- notation in an estimate is used to reflect the range of possible variation in the final cost. This notation is necessary because there are always unknowns that affect the final cost of a project. These unknowns can include unforeseen changes in scope, market conditions, labor availability, material costs, and other factors that could impact the final project cost. The +/- notation provides a realistic range within which the final cost is expected to fall, helping stakeholders understand the potential cost variability.