[PMP] 12, Cost Estimation and Budgeting

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The difference between analogous (top-down, less accurate) and parametric (uses rates, more accurate) estimating techniques. - Why bottom-up estimating is the most accurate method but requires a detailed Work Breakdown Structure (WBS). - How to apply the three-point estimating PERT formula (O+4M+P)/6 to account for uncertainty in exam scenarios. - The critical distinction between the cost baseline (work package costs + contingency reserves) and the total project budget (cost baseline + management reserves). - How to differentiate between contingency reserves (for known-unknowns, controlled by the PM) and management reserves (for unknown-unknowns, controlled by management). For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep