Which approach is considered the bottom-up cost estimating method?

Which approach is considered the bottom-up cost estimating method?

• A. Engineering
• B. Parametric
• C. Analogical
• D. Rough-Order-of-Magnitude

Answer: (A)

Bottom-up cost estimating is built from the ground up by breaking the project into individual work packages or tasks, estimating the cost of each element (labor, materials, equipment, overhead, and risk), and then summing those costs to arrive at the total. In engineering estimates, this detailed, task-level approach is used because the scope is sufficiently defined to quantify every component, leading to a more precise total than methods that start from a rough or historical total. This approach contrasts with analogical methods, which base costs on a similar past project; parametric methods, which apply a mathematical relationship to unit costs or quantities; and rough-order-of-magnitude estimates, which provide a high-level approximation with considerable uncertainty.

Bottom-up cost estimating is built from the ground up by breaking the project into individual work packages or tasks, estimating the cost of each element (labor, materials, equipment, overhead, and risk), and then summing those costs to arrive at the total. In engineering estimates, this detailed, task-level approach is used because the scope is sufficiently defined to quantify every component, leading to a more precise total than methods that start from a rough or historical total. This approach contrasts with analogical methods, which base costs on a similar past project; parametric methods, which apply a mathematical relationship to unit costs or quantities; and rough-order-of-magnitude estimates, which provide a high-level approximation with considerable uncertainty.