Project Management of Cost Estimate Method †MyAssignmenthelp.com

Question: Discuss about the Project Management of Cost Estimate Method. Answer: Introduction The estimation of cost is considered as one of the major aspect in the process of project management. There are many methods of cost estimation in project management. One of these methods is Bottom-Up Estimation method. In the process of bottom up approach, the people who are going to do the tasks of the project take part in the process of cost estimation process and these people are the project team member. All these people work with the project manager for the development of cost estimates at the task level in the structure of work breakdown structure (Fleming and Koppelman 2016). This particular method is considered as the most accurate method of cost estimating and the reasons are discussed below: Importance of Bottom-Up Estimation Required Steps It needs to be mentioned that the cost estimation process under bottom up approach work in five steps. In the first step, the team members identify all the required tasks in the project. Work breakdown structure is considered as the basis of bottom up approach. This step decomposes the project tasks in smaller and more manageable units for the purpose of easy cost estimation (Khodakarami and Abdi 2014). This process includes step two. In the process of bottom up approach, the next step involves in the estimation of project tasks so that their dependencies can be identified. In this particular step, the project manager asks for input from team members and stakeholders to ensure for providing reference point to the firm for future change management. In the last step, the project team members determine the required resources for the completion of the project and to ascertain their availability for the completion of tasks (Snchez 2015). Importance After the completion of these tasks, the project manager is required to aggregate the estimates into total of each project deliverables. Thus, it can be observed that the bottom up approach identifies the required work for lower level activities and sums them to approximate work required for high-level project deliverables. This whole process is considered as the best way for getting more accurate scheduling figure for large projects. For the application of bottom up approach, all the information related to the projects needs to be available. Conclusion Thus, on the overall basis, it can be seen that bottom up approach helps in the determination of the cost of each activity with great details at the bottom level and them rolls up for the calculation of the project cost (Kaiser, Arbi and Ahlemann 2015). For all these reasons, bottom up approach is considered as the most accurate method for cost estimation. References Fleming, Q.W. and Koppelman, J.M., 2016, December. Earned value project management.Project Management Institute. Kaiser, M.G., El Arbi, F. and Ahlemann, F., 2015. Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment.International Journal of Project Management,33(1), pp.126-139. Khodakarami, V. and Abdi, A., 2014. Project cost risk analysis: A Bayesian networks approach for modeling dependencies between cost items.International Journal of Project Management,32(7), pp.1233-1245. Snchez, M.A., 2015. Integrating sustainability issues into project management.Journal of Cleaner Production,96, pp.319-330.