What does Basis of Estimate mean?
What is in a basis of estimate?
A Basis of Estimate (BOE) is a document that identifies the logic, data, methodology and calculations used to estimate the resources required to perform a specific task or group of related tasks. BOEs detail the thought process and calculations used to arrive at the estimate.
What is basis of estimate in project management?
The basis of estimates is created by (an output from) the PMI process to estimate costs, and then it is an input to the process to determine budget. The basis of estimates is the supporting documentation that explains how the cost estimates were developed.
Why is it important to document the basis of estimates?
It is important to take note that the basis of estimates is concise, factual and should describe techniques used to create the cost estimate. A well-written basis of the estimate can help determine both the risks and opportunities involved in the project management blueprint.
What are the three types of estimates?
The three types of cost estimates are design, bid, and control estimates. Design estimates are prepared in the project preliminaries which gives the order of magnitude of the project cost.
Which estimating method is best?
Expert judgment is one of the most popular estimation techniques, as it tends to be quick and easy. This technique involves relying on the experience and gut feel of experts to estimate projects. It’s most useful when you’re planning a standard project that is similar to ones your team has completed before.
What basis of estimate documentation would you provide to show how you obtained your cost estimate?
Basis of Estimate line items should explain exactly how the estimate was calculated and what methodology was used. This may include information obtained from vendor quotes, previous experience with similar projects, projected per unit pricing, known wage/salary rates, or any other known pricing sources.
What are cost estimates in project management?
In the field of project management, cost estimation is the process of estimating all of the costs associated with completing a project within scope and according to its timeline.
What is bottom-up estimating in project management?
Bottom-up estimating in project management is a method of estimating project duration or cost by aggregating the estimates of the lower-level components of the Work Breakdown Structure (WBS).
When should the bottom-up estimate be used?
Bottom-up estimating is preferred over top-down estimating, where management imposes cost and time figures on a project without having gone through any detailed analysis to substantiate their results.
What is the difference between a top-down and bottom-up cost estimate?
Bottom-up estimating approach: Allows teams to estimate how long each sub-task will take. This time then rolls up into an overall time-to-project-completion estimate. Top-down estimating approach: Starting with an estimate of how long the entire project will take, then breaking it down into the various tasks.
What are the pros and cons of the bottom-up estimate?
Bottom-Up? Not So Fast…
| Pros | Cons |
|---|---|
| Offers a very granular way to decompose a project | Requires significant effort and data granularity |
| Provides connection to detailed project planning | Hard to account for non-linear relationships |
| Highly variable and subjective assumptions around personnel and team productivity |
What is the difference between analogous and bottom-up budget estimation?
Analogous (top-down) and parametric estimating as well as expert judgment can be applied at any level of granularity. In contrast, the bottom-up estimation technique typically implies that it relates to the smallest component type in a project (e.g. work packages and activities).
Which estimating method has the highest estimating accuracy?
Among all the options, analogous estimation is the least accurate, and bottom-up estimating is the most precise.
What is detailed estimate?
A detailed estimate is drawn up when there’s more information available or the scope of the project is better known. Detailed estimates include incredibly detailed information on quantities, costs and rates—in fact, all items necessary to complete the project.