Bottom-Up Estimating

Correct Answer: work packages

The correct answer is 'work packages'.

Bottom-Up Estimating is a project management technique where the overall project cost is determined by starting at the lowest level of detail and working upwards. This process involves:

1. Breaking down the project into smaller, manageable components called work packages.
2. Estimating the cost, time, and resources required for each work package individually.
3. Aggregating these individual estimates to calculate the total project cost.

Work packages are the smallest units of work in a project that can be assigned, scheduled, and monitored. They form the foundation of the Work Breakdown Structure (WBS) and are essential for detailed project planning and control.

The other options are incorrect for the following reasons:

'Milestones' are significant points or events in a project, not the basic units of work estimation.

'Deliverables' are tangible or intangible outputs of a project, which may consist of multiple work packages. While important, they are not the primary focus of Bottom-Up Estimating.

'Project phases' are broader divisions of a project lifecycle and are too high-level for the detailed estimation process required in Bottom-Up Estimating.

Correct Answer: It provides more accurate estimates based on specific work packages

The primary advantage of using bottom-up estimating in this scenario is that it provides more accurate estimates based on specific work packages. Bottom-up estimating involves breaking down the project into smaller, manageable components or work packages. In this case, each component team has provided detailed cost estimates, which aligns perfectly with the bottom-up approach. This method allows for a more precise and accurate overall estimate because it's based on specific, detailed information from the experts working on each component. The other options are incorrect for the following reasons: Relying on expert judgment from senior managers would be a top-down approach, not bottom-up. While expert judgment can be valuable, it may not provide the same level of accuracy as detailed estimates from the teams directly involved with each component. Using standardized industry averages for all components would be a parametric or analogous estimating technique, not bottom-up. This approach would not take advantage of the detailed estimates provided by each component team and could lead to less accurate results. Bypassing individual team estimates and using historical data exclusively would negate the purpose of bottom-up estimating and the value of the detailed estimates provided by each team. This approach would not leverage the current, specific information available for this project.

Correct Answer: Sum up all of the individual estimates to get the total cost.

In a bottom-up estimating strategy, you would sum up all of the individual estimates to get the total cost. This entails gathering the cost estimates for each component (in this case, car parts like engine, transmission, etc.), and totaling them to determine the overall project cost. The other answer options are incorrect because: 1) basing the cost on the most expensive part disregards the other components' costs, 2) using only the estimates for critical path items excludes non-critical but necessary parts, and 3) assigning an equal cost to each part is unrealistic as it does not reflect the different values of each part.