Bottom-Up Estimation

Whereas precise estimates are the basis of sound project management, there are several

approaches applied as project planning best practices in estimation. The bottom-up approach as

one of effective estimation techniques entails breaking the central project values into tasks that

can be resolved easily. Each identified component is allocated an estimated period and cost by

developing a budget of the available few resources. The bottom up approach encompasses three

models, including analogous, parametric, and three-point.

Bottom-Up Estimation: Brief Project Scenario

For the present scenario, the management will utilize parametric model due to its

convenience in application. parametric estimation (PE) relies on historical data when calculating

duration or cost estimates. It utilizes a formula in evaluating historical and statistical data to get

accurate results on the basis of the connection between variables, like cost, or time (What Is

Parametric Estimating? (With Benefits and Tips), 2022). In particular, the project management

team will first evaluate the past data as it relates to the current project before embarking on

calculations. Given that the current project involves construction of a conference center, the

involved team will focus on similar projects done previously. For instance, the firm had

previously constructed a1-storey apartment at a total cost $3,177,900, of similar design as

todays. The time taken was 2 years. Therefore, calculating the cost and the period required for

constructing a 2-storey apartment of a similar design would require the management to multiply

the previous cost by two (the size of the apartment is twice) to obtain the current cost, as well as

the required time. In particular, the firm will require an estimate of $6,355,800 and the

construction will take approximately four years. The approach, therefore, is easy and convenient.
 The bottom-up approach is therefore appropriate for the present scenario especially with

the company’s plan to use the previous design in constructing the apartment. The estimates that

the project management team will find may not result to over-budgeting or under-budgeting. As

a result, the project will proceed without likely disruptions due to resource inadequacies.
 Reference

What Is Parametric Estimating? (With Benefits and Tips). (2022, June 9). Retrieved September

1, 2022, from Indeed:

https://emplois.ca.indeed.com/career-advice/career-development/parametric-estimating