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I agree with @Joeblerk , Parametric approach is the best method.
I agree with @Joeblerk , Parametric approach is the best method.
I believe that combining the three approaches stands out to be the best. This is because all project activities differ from one another for example if I plan to install greenhouses for a certain food security project I will use top down to estimate costs of green house kits, parametric to estimate the overall cist of the several greenhouses and bottom up to determine the cost paid to the experts who will install them
From my experience working in public health in Nigeria, I would recommend the parametric approach coupled with the bottom up approach. Many projects at my organization have routine activities, thus there can be a unit cost for each type of activity. At times, there are nuances to each context that experts might not quite understand. Therefore the top-down approach would be my last option.
I agree with this suggestion, it is possible sometimes to adopt three approaches if time allows. However during emergency interventions especially in humanitarian sector, one find him/herself using both parametric and top down approaches
Thank you!
@Kisa90 ,thank you for your answer.
@Muslee ,you're very welcome..
From my understanding, I think the best way to come up with a project budget is by using the parametric approach reason being that it is more efficient and transparent.
@Fedrine_effande ,thank you for your answer.
As for me, I believe that he parametric approach is the best approach, because is simple to use, is reliable, is accurate, less time consuming and not complex. All you require is to know he true actual cos per unit then you reliable do the calculations. It help reduce inaccuracy and reduced underestimated cost per unit or overestimated cost per unit. It help reduce dishonesty. I prefer the Parametric approach
@Tabotndip ,thanks for highlighting the benefits of using the parametric budgeting approach in cost estimation.
for me the top down budget approach for the project sounds well as minimize risks of some workers dishonesty on expenses given their listed activities.
it should be checked by bottom up cost estimates and parametric approach.
@nyamsera ,thanks for your thoughtful point of view about cost estimation.
I believe using the parametric is still the best because is transparent and you will know each unit cost. In the world we are today honesty is a rare virtue.
@Oluwabukola_ope ,thanks for your thoughtful answer.After lots of thought,I realize that this budgeting approach can eliminate dishonesty significantly.
Combing the three approaches would be best for any organization but I would rather combine the bottom-up approach and the parametric approach because with the bottom-approach a level of trust is being developed in the process and the parametric approach could be be used to cut the excesses.
@oluwaferanmieda ,thanks for sharing your point of view on cost estimation.
Bottom down approach
This approach work in both the service provision and product provision. Asking the professionals will work best especially when creating a budget. The information from a Professional is More reliable than an estimate. Thus l support this method although it has its setbacks.
I am strongly in support of parametric approach, is an approach that works when you have a cost-per-unit that can be reliably calculated. It's more reliable than other.
You opinion is Helpful
@Simbamadanhi ,thanks for expressing your point of view on cost estimation.
@princeadebowale79 ,your response has highlighted one of the advantages of the parametric budgeting approach.
Somehow cost are very difficult to predict. This is because of many factors that may hinder the fluctuations in the price e.g. demand, inflation, season. etc The product on sale or service being provided differ that is also a challenge.
For more details about costs l would encourage my fellow colleagues to study accounting
I think there is no exact method of estimation because the 03 methods studied above have their space. At the start of the project, the organization had recourse to experts because they already had problems at their level. Then we went to the site to see the basic needs and they offered us their estimate and at the end we used the parametric estimates for the purchase of office equipment. So the 03 estimation methods are important.
@Simbamadanhi ,I love your brilliant answer.Even then,which budgeting approach do you think is the most efficient?
@Carinesiakam ,like you said;every budgeting approach fits a different context in the cost estimation process.
Combine using all 3 approaches might provide better and realistic estimate costs.
The most easy way to use for me is parametric approach though it has limit of use in some cases.
@Tta said in Module 2 Discussion: Estimating Costs:
Combine using all 3 approaches might provide better and realistic estimate costs.
The most easy way to use for me is parametric approach though it has limit of use in some cases.
@Tta ,your thoughtful answer on cost estimation is highly appreciated.
for me ,combining the approaches will be the best way because it help you to compare results and find the most accurate budget
hello,i agree with you
Please in the last video of this course (Managing Cost ), the Director of Pragya said the were ask by UNICEF to make 500 courses and the made 800, i would like to know if in this case ,the scope was not failed?
@MissionaryAkoroMawina-esso ,thanks for expressing your point of view on cost estimation.
@MissionaryAkoroMawina-esso ,the project was a huge success because its performance exceeded what they had initially projected. It was also within the scope.
I believe that all 3 methods should be used, top down, which can be adjusted by using the parametric, and then the bottom up for the high value items, if the bottom up estimates are out of line - you maybe able to determine if there is a cost being overlooked.
@JSContractMgr ,thanks for your thoughtful point of view.
I think all three methods should be used to get correct budget. It may take time but budget is one of the constraint to implement the project and so it is worth to consume time for budgeting.
@Thet-5 ,I truly appreciate your answer.
I believe that the comprehensive, all three approaches, would be the best for the preparation for estimating costs. Parametric is considered as Pro-forma cost, but it can not be covered all items/activities. In this case, bottom-up approach can supplement while new activities such as quality products can be estimated through top-down approach.
I believe that you should use the Top-down approach because it involves experts and during the research with these experts you can use the parametric approach to get the cost of particular resources. While using the top-down approach cases of dishonesty are very minimal.
For me, I will chose parametric approach because I will usually have a fair knowledge of the cost of a particular item and can easily estimate the cost. I will also be able to easily calculate the total cost of items needed for the period/ scope of the project.
I believe using the three as specified in the course can be very good. But to singling out one for me it will be the parametric because it gives room for flexibility and accuracy due to the facts that prices are not always fixed they fluctuate. So multiply item's price base per a single item will give an edge when there's a change in bulk price.
@Zin ,thanks for your thoughtful answer.
@Dorinna ,you've clearly highlighted the benefits of the top down budgeting approach.
@Folapat ,thanks for expressing your point of view on cost estimation.
@Breezymario ,thanks for your thoughtful answer.
Well, i would choose bottom-up approach over the other two though as we all know they all equally have their advantages. This is becuase buttom-up approach affords the opportunity to team leads of various specific activities on the work breakdown structure who are the supposed "experts" in those specific tasks/field of specialization with indepth knowledge and experience to accurately estimate cost for their respective activities on the project. Yes the challenge of dishonesty is real in this case, however this is where a blend of parametric approach (cost-per-unit) can help validate where it is applicable. Thanks
Bottom-up approach is the best budget strategy, it helps to test the assumptions.
@chabaj ,thanks for your answer.
+Which assumptions does the bottom up budgeting approach test?
@MatAgb ,thanks for your answer.
The use of any approach will depend on the ease with which you can have an accurate cost estimate of the project.
@ehoolongc ,thanks for your answer.
Depending on the type of project that you are undertaking,i would prefer bottom up approach.Its time consuming but it can help you in coming up with realistic costs for the project since each and every activity will be assigned a cost centre which in most cases will be appropriate to cover each and every task that is outlined to be done
The pragmatic approach would be bottom-up to find actual cost spending in the field. Even though there are some doubts about field staff in terms of overestimating their expectation, it is still more closer approach than top-down for the purpose of estimating required expenses for the project. The field staff know local expenses, and can figure out more accurate cost for the planned activities. In addition, the bottom-up approach helps to enhance ownership of the field staff thereby helps to implement the project effectively and efficiently. The bottom-up approach can also increase the participation of field staff in project designing, and can mobilize local stakeholders in organized manner. In this context, the bottom-up approach also helps to top leaders to understand ground reality and estimate budget more accurately and sufficient for the project activities.
@Maish2012 ,thanks for highlighting the benefits of the the bottom up budgeting approach.
@ShobhakarB ,you've clearly highlighted the advantages of the top down budgeting approach.Thanks for your brilliant answer.
The bottom top approach is our best choice because you build the capacity of the downer units and get real facts of what you need for your organisation. The bottom top can be departmentalised and used to get an exhaustive information comprehensive enough to effectively implement a project.
@531 ,thanks for highlighting the advantages of the bottom up budgeting approach.
Coming from an administrative background I appreciate a blended approach to budgeting on a project. As an individual that is in charge of spending money for resources, events and technology it is helpful for budgeting individuals to understand realistic costs, both with regard to time constraints on procurement and the value of quality.
I feel that it is safer to actually observe properly the type of project and which budget approach is best for the project.
Thank you for the summary that sounds so relevant.
I believe the bottom-up approach , whenever feasible, can produce a more realistic and accurate budgeting. While a top-down or parametric method could help develop a skeletal/first draft budget in the beginning, the bottom-up approach can help add detailing and accuracy. Any price inaccuracies created during the bottom-up process might become visible when during such a blended approach.
I believe using the tree approaches would be more effective, although parametric approach may be the best it will a not be applicable in all areas e.g when making calls you cannot accurately estimate the cost of calls.
@RVASED ,I love your insightful opinion on cost estimation.A blended budgeting approach seems like a great idea.
@Younglan ,your statement is very correct.
@VidhyaK ,thanks for sharing your brilliant answer with us.
@Faith_kyalo27 ,thanks for your answer.
Parametric approach is best in my opinion
Very correct
True. You have also made a valid point here
@Opeyemi53 ,thanks for your answer.
I believe bottom up approach would be ideal even though its time consuming because most costs will be realistic eliminating budget overruns
The best tactic is to use a combination of the three approaches. Top down approach ensures you get help from experts and research , bottom up to ease getting the opinions of the persons actually spending the funds and parametric to minimize any opportunities of budget inflation by dishonest members .
@kiunyakas ,thanks for sharing your point of view on the Bottom Up budgeting approach.
@roselynenjoroge1 ,I love the way you've briefly explained how the three budgeting approaches can actually complement each other.
in my opinion is bottom up is the more realistic if you are coming up with budget
for a field related activity like data collection
@kenabu ,thanks for sharing your point of view on the bottom up budgeting approach.
For me the simplest approach that can be used is Bottom-up approach because this approach can produce more realistic cost estimates compare to other approaches.
Just like @Joeblerk opined, I also corroborate that the parametric approach could still be viewed as the best approach especially where integrity and honesty is scarce among members. The parametric approach is not so complicated unlike the Topbottom and Bottomtop because all that is needed is to ensure that one (the project manager or the finance manager as the case may be) has a valid actual cost per unit and then makes the multiplication. So this calculation is quite a simple one.
@Sir_Johnson_De_Great ,your thoughtful point of view on cost estimation is highly appreciated.
@pmabor ,thanks for sharing your point of view on cost estimation.
to generate cost estimate you need to apply the three approaches if possible or at least two.
first discuss the cost estimates about the managers experts and after that come to your employees and give them chance to tell their points of view and if possible you have to make sure to know the cost per unit.
i believe that from the knowledge of the course, it is best to apply both ways in estimating cost, that is use the top-bottom approach and compare the results with the bottom top approach and use the parametric where necessary.
@mohamedseed443 ,your point of view on cost estimation is very enlightening.Using the three budgeting approaches to estimate costs makes so much sense.
@NDAYAMNDE ,thanks for your answer.
I believe that you should use the bottom-up approach whenever possible because in as much as it requires more time and its proneness of the expenses made on the resources being manipulated or hiked by the staff in charge of market survey and budgeting (but this particular drawback can be curtailed with strict supervision and the aid of e-commerce as products and services are now digitally marketed for accurate prices of resources to be used, this way budget can be verified, cross-checked and be more accountable). This approach is useful for developing detailed project budgets, schedules and monthly forecasts. It also helps define the specific skills needed during key phases of the project in order to get a more accurate schedule which invariably enables the engagement of skills of the project team.
I believe that you should use the bottom-up approach whenever possible because in as much as it requires more time and its proneness of the expenses made on the resources being manipulated or hiked by the staff in charge of market survey and budgeting (but this particular drawback can be curtailed with strict supervision and the aid of e-commerce as products and services are now digitally marketed for accurate prices of resources to be used, this way budget can be verified, cross-checked and be more accountable). This approach is useful for developing detailed project budgets, schedules and monthly forecasts. It also helps define the specific skills needed during key phases of the project in order to get a more accurate schedule which invariably enables the engagement of skills of the project team.
parametrics is better but bottom up
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _parametric - approach whenever possible because _when you have a cost per unit that can be relatively calculated , accurate and reliable is the best option , however must of the building materials for project are base on unit per item supply example, if you are buying a block for building a wall , you may required a of numbers block to purchase per unit eg if the price of the block is N10.000 per one and the total block needed to build the wall is 5000 you simple multiply that 10,000x5000 to give you the required price and quantities of block you need to build the wall perfect. While bottom-up approach can produce Les realistic cost estimate than the top-dow approach because it can be time consuming and difficult to coordinate however, the employee may occasionally be dishonest about the expenses , this will affect the budget and the success of the project but in parametric approach the cost incur is transparent. however, top-down approach is relatively quick and simple but may be out of touch with real cost , also is not the best option to use .A good project manager most always monitor the time, budget and scope of the project to be a successful manger because they work hand in hand at the right in the project charter in order to be properly guided in discharging roles and responsibilities . a project manager must balance all three constrints ______________ .
@anadimarystella ,thank you for expressing your opinion on cost estimation.The bottom up budgeting approach surely has its advantages and one of the challenges is the possibility of cost inflation by dishonest employees.The use of e commerce ,verification and crosschecking of facts given by staff are also brilliant ways to curtail this.
@ObafemiDeborah ,thank you for your answer.Could you briefly explain why the parametric budgeting approach is much better than the top down budgeting approach?
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _parametric - approach whenever possible because _when you have a cost per unit that can be relatively calculated , accurate and reliable is the best option , however must of the building materials for project are base on unit per item supply example, if you are buying a block for building a wall , you may required a of numbers block to purchase per unit eg if the price of the block is N10.000 per one and the total block needed to build the wall is 5000 you simple multiply that 10,000x5000 to give you the required price and quantities of block you need to build the wall perfect. While bottom-up approach can produce Les realistic cost estimate than the top-dow approach because it can be time consuming and difficult to coordinate however, the employee may occasionally be dishonest about the expenses , this will affect the budget and the success of the project but in parametric approach the cost incur is transparent. however, top-down approach is relatively quick and simple but may be out of touch with real cost , also is not the best option to use .A good project manager most always monitor the time, budget and scope of the project to be a successful manger because they work hand in hand at the right in the project charter in order to be properly guided in discharging roles and responsibilities . A project manager must balance all three constraints and ensure proper monitoring and evaluation of the project that guarantee the stork up saver is sound for smooth operation. .
Three of these approaches are good and useful. For me, parametric approach is more reliable than others. The cost per unit can get from online website today.
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _parametric - approach whenever possible because _when you have a cost per unit that can be relatively calculated , accurate and reliable is the best option , however must of the building materials for project are base on unit per item supply example, if you are buying a block for building a wall , you may required a of numbers block to purchase per unit eg if the price of the block is N10.000 per one and the total block needed to build the wall is 5000 you simple multiply that 10,000x5000 to give you the required price and quantities of block you need to build the wall perfect. While bottom-up approach can produce Les realistic cost estimate than the top-dow approach because it can be time consuming and difficult to coordinate however, the employee may occasionally be dishonest about the expenses , this will affect the budget and the success of the project but in parametric approach the cost incur is transparent. however, top-down approach is relatively quick and simple but may be out of touch with real cost , also is not the best option to use .A good project manager most always monitor the time, budget and scope of the project to be a successful manger because they work hand in hand at the right in the project charter in order to be properly guided in discharging roles and responsibilities . A project manager must balance all three constraints and ensure proper monitoring and evaluation of the project that guarantee the stork up saver is sound for smoth operation. .
Estimating cost give you the opportunities to have the an overview of the price of goods and services estimate being it top=down approach, bottom-up approach or parametric approach but can be use where necessary. therefore cost estimate guide a project manager on how to plan and manage the available fund base on time, budge and scope of the project.
I agree with this statement. Each option of estimating activity costs can be necessary depending on the project. If possible, all three of them must be practice or use to the fullest to achieve better project estimates.
In my opinion, parametric is the most effective way to generate cost estimates, because, such estimates are based on known per unit costs. Hence, it might be more realistic
@Kaung-KT_1997 ,thanks for sharing your response with us.