Which statement about bottom-up estimation use is true?

Which statement about bottom-up estimation use is true?

• A. Bottom-up uses historical data for quick estimates.
• B. Bottom-up uses unit rates to estimate the entire project.
• C. Bottom-up estimates are built from vendor quotes to improve accuracy.
• D. Bottom-up builds estimates from work packages to improve accuracy.

Answer: (D)

Bottom-up estimation starts by breaking the project into detailed work packages, estimating the cost and duration of each package, and then adding them up to form the overall project estimate. This granular approach captures the specific resources, activities, and scope of each element, which leads to a more accurate total because you’re aggregating firm, component-level details rather than guessing from the top down. That’s why building estimates from work packages to improve accuracy is the correct description. Using historical data for quick estimates aligns more with top-down or analog estimating, where a broad estimate is derived from past projects rather than detailed package-level work. Relying on a single unit rate to estimate the entire project oversimplifies things and misses the nuance of different work packages. Vendor quotes can inform package-level costs, but the defining method is the detailed estimation of each work package and then summing them, not solely relying on quotes.

Bottom-up estimation starts by breaking the project into detailed work packages, estimating the cost and duration of each package, and then adding them up to form the overall project estimate. This granular approach captures the specific resources, activities, and scope of each element, which leads to a more accurate total because you’re aggregating firm, component-level details rather than guessing from the top down. That’s why building estimates from work packages to improve accuracy is the correct description.

Using historical data for quick estimates aligns more with top-down or analog estimating, where a broad estimate is derived from past projects rather than detailed package-level work. Relying on a single unit rate to estimate the entire project oversimplifies things and misses the nuance of different work packages. Vendor quotes can inform package-level costs, but the defining method is the detailed estimation of each work package and then summing them, not solely relying on quotes.