What are the 5 levels of cost estimation?

Cost estimation is a crucial aspect of any project management process, and it involves assessing the financial resources required to complete a project. It is typically categorized into five distinct levels, each offering varying degrees of accuracy and detail.

The first level of cost estimation is Class 5, known as the rough order of magnitude (ROM). This level is used to provide a very general and high-level estimate of the project's cost, mainly to assist with capital planning. It is the least accurate and detailed of all the levels but serves as a starting point for further refinement.

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The second level, Class 4, is aimed at assessing the feasibility of the project. It provides a more refined estimate than Class 5, taking into account additional factors that may affect the cost. This level helps decision-makers determine whether the project is financially viable and worth pursuing.

Moving on to Class 3, this level of cost estimation is used to create a control estimate for budget authorization. It offers a more detailed and accurate estimate, taking into account a wider range of factors and constraints. This estimate serves as a baseline for comparing the actual cost of the project against the planned cost.