There are different types of cost models depending upon your requirements. Cost model can be associated with product or with project (can be IT project, Construction project, Engineering project or any other project).
Product cost model mainly concentrates on identifying the development cost of the product (direct/indirect hidden/unhidden). Product cost model includes product description, different cost elements including labour, time, material, investments, machinery usage etc. In addition it also includes transport cost (may be direct or indirect).
On other hand in project (must have start and end) cost modelling, we define all the activities, sub task or actives their time constraints, man power and other resources as well. The scope of the project cost modelling is broader as compare to product cost modelling where we only consider one single product. Simplest form of project cost model is given below.
In this cost model we mainly calculate the human resources cost(estimated) then we compare it with the actual(Once project is finished) human resources cost.
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