Definition: A detailed cost estimation approach where individual components or activities are estimated separately and then aggregated to form the total project cost.
Key Components:
- Work Breakdown Structure (WBS): Decomposing the project into manageable sections.
- Individual Task Estimation: Calculating costs for each discrete activity.
- Aggregation: Summing all individual estimates to determine the total project cost.
Use Cases/Industries:
- Engineering Projects: Developing detailed budgets for complex systems.
- Manufacturing: Estimating costs for each step in a production process.
- IT Implementations: Budgeting for software development tasks and integrations.
Advantages:
- High Accuracy: Provides detailed and specific cost insights.
- Transparency: Offers clear justification for each cost component.
- Comprehensive Scope: Ensures all aspects of the project are considered.
Challenges:
- Time-Consuming: Requires significant effort to estimate each component.
- Complexity Management: Handling numerous detailed estimates can be cumbersome.
- Data Dependency: Needs precise information for each task to ensure accuracy.
Related Terms: Task-Level Estimating, Detailed Cost Analysis, Micro Estimating
Example: In developing a new software application, the project manager employs bottom-up estimating by calculating the cost of coding, testing, user training, and deployment individually, then summing these to arrive at the total project budget.
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Synonyms:
Detailed Estimating, Grassroots Estimating
