MGMT 4700 Lecture 5: Project Mgmt - CH 5
9 May 2016
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Document Summary
Top-down estimates are usually done by senior management: often derive estimates from analogy, group consensus, or mathematical relationships. Bottom-up estimates are typically performed by the people who are doing the work: based on estimates of elements found in the work breakdown structure. Inaccurate estimates lead to false expectations and consumer dissatisfaction. Accuracy is improved with greater effort (but costs time and money: project estimating becomes a trade-off, balancing the benefits of better accuracy against the costs for securing increased accuracy. The quality of time and cost estimates can be improved when the below variables are considered in making the estimates. Estimates of time and cost together allow the manager to develop a time-phased budget, which is imperative for project control: planning horizon estimates of current events are more accurate than more distant events. The accuracy of time and cost estimates should improve as you move from the conceptual phase to the point where individual work packages are defined: project duration.
