You are the project manager for a new software development initiative. Following the completion of the WBS, you are preparing to refine cost estimates. The project is considered high-risk due to its innovative nature and the technology being untested in the field. In this context, what would be the MOST appropriate method to ensure the credibility and accuracy of your cost estimates?
For a high-risk project involving innovative and untested technology, the most appropriate cost estimation method is Three-Point Estimating. It allows the consideration of different scenarios, mitigating the uncertainty inherent to the project. This method uses the optimistic (cO), most likely (cM), and pessimistic (cP) costs to calculate an average cost estimate that takes into account the variability and risks associated with the project activities.
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