Top-down vs bottom-up estimations

Abstract

When starting a new project, an important task for the project manager, is the estimation process. This can both be an estimation regarding cost and time-frames. It is important to get the project off to a good start, given that success of the project depends on the estimation - both in regards to time and cost. When estimating (or in other words 'predicting the future'), the project manager can use the following methods:

- Top-down approach

- Bottom-up approach

By choosing the top-down approach, the project manager chooses to make an overall scope of the project. From here, the major elements of the project is being listed and estimated separately. This approach creates a rough idea of the project size and the different timeframes of the project elements. The advantages of using the top-down approach is less time consuming and requires a limited amount effort. The estimates created by this method often turns out larger than the ones, which has been found using the bottom-up approach.
The bottom-up approach is on the other hand a very time-consuming and costly method, but it gives a more accurate estimate of the project time and cost. By using the bottom-up approach, the cost and time frame is being calculated for every activity related to the project. The values and time frames are then aggregated in order to estimate the total cost and project time. The bottom-up approach is often used in order to gain stakeholders to buy in on the project.

Big idea

describe the tool, concept or theory and explain its purpose. The section should reflect the current state of the art on the topic

Application

provide guidance on how to use the tool, concept or theory and when it is applicable

Limitations

critically reflect on the tool/concept/theory and its application context. What can it do, what can it not do? Under what circumstances should it be used, and when not? How does it compare to the “status quo” of the standards – is it part of it, or does it extent them? Discuss your article in the context of key readings / resources provided in class. Substantiate your claims with literature

Annotated Bibliography

Provide key references (3-10), where a reader can find additional information on the subject. The article MUST make appropriate references to the and reference material provided in class – either incorporating it as a source, or critically discussing aspects that are missing from it but covered by this article. Summarize and outline the relevance of each reference to the topic (around 100 words per reference). The bibliography is not counted in the suggested 3000 word target length of the article.

References to use for later

Web: https://www.apm.org.uk/blog/three-ways-to-approach-cost-estimation/
Web: https://www.pmi.org/learning/library/top-down-bottom-up-pm-8496
Video: https://study.com/academy/lesson/top-down-bottom-up-estimating-techniques-in-project-management.html