Difference between Estimate Cost and Determine Budget!

I am not sure I fully agree with your definitions Hassaan. You start every project by ROM Estimates then refine those estimates as you move forward with your planning and WBC to arrive to a final cost estimate which includes all contingency reserves and thats your project budget which is basically the cost baseline for your project and you always need to remain within that budget unless things change.

The money that you need to complete the project with is called Estimate to Complete (ETC) and this amount might vary from month to month and you reevaluate your budget frequently to always be aware of your ETC especially if there are many change orders.

Hope this helps.

From my point of view estimating cost is estimating individual activities, contegency reserves, management reserves. When all these activities are combined together it becomces or called estimated budget. Rest I am agree with whatever Rami has said

Thank you Kaibni. Previously, I was thinking of these two steps as completely distinct. As of now, my understanding is that first cost is estimated for every control account (this is called estimate cost). Then contingency reserves are added to form cost baseline and shown as S-curve (this is called determine budget). Then management reserves are added to it and this forms the project budget. ALL these things are done in the planning stage.

As for the money needed to execute the project, this is done at control cost stage using different variances and indices etc.

Is it right?

In a sense it is correct except that the money needed to complete the project is your budget estimate but what do every month is refine this budget as more risks are added, others are eliminated, change orders come up and so on. Hope this makes sense.

Exactly. Thank you very much for clarifying my concepts. It helped a lot. Thanks.