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What is the difference between bottom-up and top-down estimating in project management?

Please explain, in details, the differences between bottom-up and top-down estimating in project management. Please also advise which estimating technique is better, and why...
asked 7 years ago by anonymous

1 Answer

Both bottom up and top down are cost estimation techniques in project management. The main difference between the two is that bottom up estimating is accurate (but takes a long time to do), while the top down estimating technique is fast (but not accurate at all).

Bottom up estimating is a thorough estimation of the project by estimating each and every work package in the WBS. Bottom up estimating is used once management, and the client, are committed about the project and they need an accurate estimate.

Top down estimating (which often means Analogous estimating see: http://www.projectmanagementquestions.com/2211/what-is-analogous-estimating ) means that the project manager has to rely on previous data from similar project to quickly estimate the costs of the current project. Top down estimating is used mainly in construction projects, where the requirements are more or less static, and there aren't too much unknowns. For example, we know that the cost of a bridge from a previous project is $1 million, so if our project consists of building a similar bridge, then the cost will be more or less the same after taking inflation into consideration.

Top down estimating gives a fast estimate and is ideal for construction projects, but it can also be used for small software projects, bottom down estimating takes a long time for the project manager to generate, and is ideal in software projects that have a lot of deliverables.
answered 7 years ago by anonymous

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