Build-up or bottom-up approach is the most accurate for estimating project cost and duration, however, it takes the most time to complete and requires the involvement of the entire project team. In this video, learn why and when to use this approach and work through an example to arrive at an overall cost estimate by approximating cost values for smaller components.
- Construction projects provide great context … for learning about this next estimating approach. … Let's say you're a home builder, … but let's also say that lately your cost comparisons … for recent projects … have been significantly exceeding estimates. … We can't have this. … So, what do we do? … What you've been doing is using an approach … like analogous estimating, you know, using similar projects … and your experience to estimate project costs. … This isn't working and it's a good time to look … at a more accurate estimating approach, … like the engineering build-up approach. … This may be the official name, … but really no one wants to say that all the time. … So, you will hear a build-up estimate … or bottom-up approach or some version of that, … it's all basically the same thing. … Simply build-up estimating gets to an overall cost estimate, … adding the estimate values … for smaller project or item components. … This approach is the most accurate approach … to estimate costs. …
- Describe the limitations in reaching 100 percent accuracy in cost estimates.
- Differentiate between nominal, ratio, and ordinal data.
- Relate the reason for credible cost estimates to a company’s business needs.
- Determine situations in which a business would use the top-down estimating approach.
- Examine the validity of data and data collection given a scenario.
- Explore the differences between cost, value, and performance.