8 identify and briefly describe the four major methods of bottom up estimating

An often-cited weakness of this method is that subjective assessments of probability distributions often lack credibility, because they may be influenced by bias. In contrast, system dynamics models Forrester, describe and explain how project behavior and performance are driven by the feedback loops, delays, and nonlinear relationships in processes, resources, and management.

Project management cannot affect the frequency of floods, so risk management must focus on trying to reduce the severity of the impact of a flood. Three-Point Estimating This technique is used to reduce the biases and uncertainties in estimating assumptions.

It provides the means to assess risk at various stages during the front-end project planning process and to focus efforts on high-risk areas that need additional definition. It is widely recognized that a single event can cause effects on a number of systems i.

The models are typically either top-down or parametric and do not contain enough detail to validate bottom-up engineering estimates or project networks. These five steps will send you on your way to successful bottom-up estimating: One approach is to break down the uncertainties into manageable parts.

There are mathematical formulas Breyfogle, that can be used to compute the minimum number of iterations for acceptable confidence limits on the means or the values in the tails of the distribution.

These methods can be adapted to project cost, schedule, and performance risk assessments. Therefore, this technique does not provide a very reliable estimation.

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Each risk element in the PDRI has a series of five predetermined weights. It takes variables from similar projects and applies them to the current project. A project director should know enough to be able to critically evaluate the stochastic simulation results for plausibility and should not accept the results just because they come from a computer.

Because system dynamics models are based on dynamic feedback the models can also be used to evaluate the impacts of various failure modes or root causes, particularly in cases where the root causes can be identified but the ripple effect of their impacts is difficult to estimate with any confidence.

The three factors—severity, likelihood, and leading indicators—interact. If the control method is to reduce the severity of loss by placing sandbags around the perimeter and renting pumps, then measuring the water height may have little impact on the mitigation effort; but measuring the rainfall across the watershed may be more appropriate because it allows time to implement the control.

That is, the uncertainty in the total cost is affected not only by the uncertainty in each work package but also by how much each work package affects, and is affected by, the others. It is common for Monte Carlo simulations to use far fewer iterations than the minimum normally required to get statistically valid answers.

4 Tools to Estimate Costs in the Project Management

High Impact, Low Probability By definition, high-impact, low-probability events are rare occurrences, and therefore it is very difficult to assign probabilities to them based on historical records. But simulations with insufficient iterations may underestimate the probability in the tails of the distributions, which is where the risks are.

Data do not exist and so subjective estimates of probabilities are necessary. When considering resources, think about the number and type experience and skill level of people needed, equipment hardware, software, etc.

These methods are objective in that they do not rely on subjective probability distributions elicited from possibly biased project advocates. A sensitivity coefficient is a derivative: Failure Modes and Effects Analysis In project risk assessment, a failure can be any significant event that the sponsor does not want to happen—a budget overrun, a schedule overrun, or a failure to meet scope, quality, or mission performance objectives.

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I hope this article is useful to you. So now that we know what we need to get started with bottom-up estimating, 2 and 3 are the next logical steps — estimate tasks and identify their dependencies.

Most Likely Cost Cm: Analogous Estimating This technique is used to estimate the project cost when very little detail about the project is available. In the absence of hard data, sensitivity analysis can be very useful in assessing the validity of risk models. System Dynamics Models Projects with tightly coupled activities are not well described by conventional project network models which prohibit iteration and feedback.

Analysts build linear or nonlinear statistical models based on data from multiple past projects and then compare the project in question to the models. For example, if the project is the construction of a facility in a flood plain or an area with poor drainage, then a failure mode could be flooding of the work site.

Considers the worst case and assumes that almost everything goes wrong. Then, by elementary second-moment theory Benjamin and Cornell,1 the sensitivity of the uncertainty in the total project cost with respect to each work package is proportional to the combination of the activity uncertainties and the correlations between activities.

The simulations simply add up the uncertainties associated with work packages, but they may be inaccurate because these work packages are not necessarily independent.

The use of such statistical models is desirable as an independent benchmark for evaluating cost, schedule, and other factors for a specific project, but statistically based methods require a large database of projects, and many owners do not perform enough projects or expend the effort to create such databases.

It includes detailed descriptions of issues and a weighted checklist of project scope definition elements to jog the memory of project team participants.

The PDRI is used in front-end project planning to help the project team assess project scope definition, identify risk elements, and subsequently develop mitigation plans.

Page 29 Share Cite Suggested Citation: Prefabrication of major components to avoid the uncertainties of construction at a job site is one example of changing the normal process to reduce risks although in this example the change may also introduce new risks, such as transportation of the components to the job site; thus the resolution of one risk may give rise to another.Identify and briefly describe the five major methods of top-down estimating.

1. consensus, 2. ratio method, Identify and briefly describe the four major methods of bottom-up estimating. 1. template method, 2. parametric procedure applied to specific tasks, 3. detailed estimates from the WBS work packages, %(25).

Bottom-up estimating is the most accurate approach to estimating cost and duration. It also requires the most time. This kind of estimating involves the entire project team and gives them the opportunity to take part in developing the.

5 Steps to Bottom-Up Estimating. Posted by Gabrielle Guerrera on Thu, Aug 12, Out of the three estimation methods, this way is the most time-consuming but is also the most accurate. These five steps will send you on your way to successful bottom-up estimating: Identify All Project Required Tasks.

"8 Identify And Briefly Describe The Four Major Methods Of Bottom Up Estimating" Essays and Research Papers 8 Identify And Briefly Describe The Four Major Methods Of Bottom Up Estimating * Identify the four major lines.

False If time and costs are important to a project the top-down False Identify and briefly describe the five major methods of top-down estimating.

1. consensus 2. ratio method 3. apportion method 4. function point 5. learning curves Identify and briefly describe the four major methods of bottom-up estimating 1.

template method 2. 91%(32). Start studying e2 essays. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Search. Create. In the bottom-up approach, team members first identify as many specific tasks related to the project as possible.

Briefly describe each category. 1 Prevention cost: The cost of planning and executing a project so.

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8 identify and briefly describe the four major methods of bottom up estimating
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