working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss. Credit will be given for...

Introduction
The organization faces an overrun situation in the last project. Hence, accurate estimation of
cost is essentials for the success of this organization. Generally, when an organization is
going for Project estimation decisions, it might be for the short term or the long term as per
the objectives of the organizations. It is one of the major decision that is faced by every
project manager and it is very crucial because if the prices are unable to meet the costs in the
long run then the company is going to get out from the competitions.
The main aim of estimation is therefore is to cover the fixed as well as variable costs and at
the same time bring some profit to maintain the profitability of the deals. This also helps to
build revenues for the company. The other factors which also affect the pricing decisions are
as follows:-
1) Legal requirement
2) Competitions
3) Customers’ Demands
Apart from these the cost estimation of a product also depends on other factors such as if it is
influenced by dominant market leaders then the company is defined as price taker. However,
Company who are offering differentiated and highly customized product management cost.
are defined as price setters. There are two models which are widely used by these companies
to estimate cost:-
1) Cost plus pricing
2) Target Costing
Cost plus Pricing estimation
This method of estimation is used when it is virtually impossible to estimate the duration. As
discussed above, it is mostly used by the price setters. It is done by calculating the average
cost associated with all the steps of the WBS and then added the markup required by the
organization to come as the final price so that the firm will meet its Return target.
The markup can be done in any of the costs such as direct variable...