A member of the board of directors has asked the project manager for the estimated cost of the minimum viable product (MVP). The estimated cost is needed in order to get formal approval for this project.
How should the project manager report this cost?
To provide the estimated cost of the minimum viable product (MVP) for formal approval, the project manager should determine the control accounts and use a top-bottom estimate. This approach is practical for the initial stages of strategic decision-making when detailed information about the project deliverables and their costs might not be fully available. By using control accounts, which are higher-level work packages, the project manager can create a more accurate and detailed estimation of the MVP's costs before the project is approved.
C. Estimate user story points and forecast a budget for that deliverable. The requirement is MVP and it is agile.
It was not mentioned in the question that it is an Agile project
Estimate to Completion is required so I would go with option A.
C. I think
https://www.youtube.com/watch?v=i1GA40fE3cA
C. Estimate user story points and forecast a budget for that deliverable
Based on the phrasing "How should the project manager report this cost?", the most fitting answer would be C. "Estimate user story points and forecast a budget for that deliverable." Estimating user story points and forecasting a budget based on those estimates is a direct method for determining the cost of a deliverable like an MVP, especially in agile environments where user stories are utilized. This approach provides a clear and specific report on the estimated cost for the MVP.
Why not B seeing that the project has not started and the budget is needed to approve the project. There should not be any completed work or user stories so why not use a top-bottom estimate?
Answer should be B. Determine the control accounts and use a top-bottom estimate. Cannot be A because the project does not have approval yet, there is no earned value yet. . The Top-down approach is practical for the initial stage of strategic decision-making and in situations where the information required to develop accurate duration and costs estimates is not available in the initial phase of the project. Hence, top-down estimates are used initially until the tasks in WBS are defined clearly, which enable the development of well-defined schedules and budget.
Breaking MVP will help arriving at a cost which would be a focused analysis. Since the project is not yet started D can not be true and same applies to C as it might not give a clear picture on MVP cost estimate.
Change of mind. It is option C. While traditional top-down estimating techniques may have limitations in an agile context, option C reflects the agile mindset of breaking down work into user stories and estimating effort for each, contributing to the overall budget estimation for the MVP.
C is the answer
B. Determine the control accounts and use a top-bottom estimate. In order to provide the estimated cost of the minimum viable product (MVP) for formal approval, the project manager should use a top-down estimate. This involves breaking down the project into control accounts (major work packages or deliverables) and providing cost estimates for each control account. This approach allows for a more detailed and accurate estimation of costs related to the MVP. Option C suggests estimating user story points, which is more related to Agile methodologies but may not be directly applicable to a traditional project.
This option leverages the flexibility and agility of Agile methodologies, which are often used for developing MVPs. By taking these steps: Estimate user story points: By considering the functionalities and features planned for the MVP, assign appropriate point values reflecting their complexity and effort. Forecast a budget: Based on the estimated user story points and the team's historical data (e.g., average cost per point), develop a realistic budget forecast for the MVP development.
The Top-down approach is practical for the initial stage of strategic decision-making and in situations where the information required to develop accurate duration and costs estimates is not available in the initial phase of the project. Hence, top-down estimates are used initially until the tasks in WBS are defined clearly, which enable the development of well-defined schedules and budget. When are user stories written? User stories are written throughout the agile project. Usually a story-writing workshop is held near the start of the agile project.
In Agile and Scrum methodologies, estimating the cost for a project is often done based on user story points. User story points are a relative measure used to estimate the size or complexity of individual user stories. The project manager can estimate the cost of the minimum viable product (MVP) by assigning story points to the user stories, and then using historical data or team velocity to forecast the budget for that deliverable. This approach aligns with Agile principles and provides a flexible way to estimate and plan based on the features or user stories that will contribute to the MVP.
It was not mentioned in the question that it is an Agile project
Without project approval .. no epics or users stories would be available. I do not think answer would be C
B. Determine the control accounts and use a top-bottom estimate.
A, In MVP, BAC is being used.