Project Cost Estimation and Risk Analysis (IND550)

The course provides an introduction to different methods for cost estimation and handling uncertainty related to the estimate.

Course description for study year 2024-2025. Please note that changes may occur.


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The purpose of this course is to provide students with a theoretical and practical approach to the field of cost estimation. The subject is intended as a supplement to subjects such as contract strategy, contract completion and implementation, and project management. Cost estimation is relevant to all types of businesses and organizations and is an essential theme through all phases of the life cycle of a project. Estimate of investment costs is an important element in the decision whether a company will sanction a potential project. Cost estimation is part of the project budgeting process, the control phase of the project, implementation and is decisive for contracting in relation to procurement. The course aims to provide students with insights into various forms of cost estimates, different methods of cost estimation, and analysis and management of uncertainty and risk associated with cost estimates. Fundamental underlying drivers behind cost overruns are also a key issue.

Learning outcome

After completing the course, the student should be able to:

  • Apply techniques, models and methods that are relevant for performing different cost estimates.
  • Perform sensitivity analyses and use Monte Carlo simulations in Excel to analyse risk and uncertainty associated with cost estimates.
  • Have knowledge of and be aware of various factors that lead to cost overruns.

Required prerequisite knowledge


Recommended prerequisites

Basic knowledge of contract completion and implementation, project management, mathematics, statistics and use of spreadsheets.


Form of assessment Weight Duration Marks Aid
Written exam 1/1 4 Hours Letter grades Basic calculator

Digital exam (Inspera)

Coursework requirements

Mandatory assignment
The student is required get approved a mandatory assignment to be able to take the exam. If the assignment is not approved, the student cannot take the exam.

Course teacher(s)

Course coordinator:

Sindre Lorentzen

Head of Department:

Tore Markeset

Method of work

  • Lectures
  • Voluntary group work, group discussion and presentations during lecture
  • Voluntary assignments and case preparation outside lecture
  • Voluntary exercises in Excel and VBA during lecture
  • Voluntary tests on Canvas without assessment

Open for

Admission to Single Courses at the Faculty of Science and Technology
Industrial Economics - Master of Science Degree Programme Industrial Economics - Master of Science Degree Programme, Five Year
Exchange programme at Faculty of Science and Technology

Course assessment

There must be an early dialogue between the course supervisor, the student union representative and the students. The purpose is feedback from the students for changes and adjustments in the course for the current semester.In addition, a digital subject evaluation must be carried out at least every three years. Its purpose is to gather the students experiences with the course.


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