Compare and contrast top-down versus bottom-up cost estimating

Running head: PROJECT MANAGEMENT
Project management
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PROJECT MANAGEMENT
Table of Contents
A) Compare and contrast top-down versus bottom-up cost estimating...........................................2
B) Analyze which you think produces the better cost estimates.....................................................3
References........................................................................................................................................5

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PROJECT MANAGEMENT
A) Compare and contrast top-down versus bottom-up cost estimating
Top down estimation is considered as one of the technique that is mainly utilized by the
upper level of the management for estimating the entire cost of the project by utilizing
information from similar projects. On the other hand, bottom up estimation is one of the
technique of project management that engages people who are generally going to take part within
the entire estimation procedure (Lemmens, 2016). It is found that the bottom up estimation is
considered as one of the most accurate approach of cost estimation. In this type of estimation, the
entire project team is involved for getting the opportunity to take part within the development of
estimates that is mainly utilized for measuring the work.
According to Batselier and Vanhoucke (2015) top down estimation can be very much
useful when the cost estimates are generally needed in the early phases of the project. As this
technique is generally dependent on the high level of information, the estimated cost can be
calculated with very much less resources as well as effort. Thus, it is considered as one of the
less expensive as well as quick methodology for properly establishing the project budget in
comparison to other cost estimation techniques which generally requires much more detailed
information involving both project resources as well as time (Abdelhalim & Khoury, 2017).
On the other hand, bottom up approach are considered to be very much accurate as each
department mainly utilizes its specialized knowledge for developing the individual line items of
the budget (Annadanam & Kota, 2019). This type of the entire budgeting procedure helps in
improving the morale of the company and the motivation of the employees as the team generally
gets involved in properly formulating the budget and takes appropriate ownership over achieving
the budgeted targets of the project.